Eleven months after being unceremoniously suspended by Major League Baseball for alleged involvement in an electronic sign-stealing scandal and then swiftly fired—with cause—by the Houston Astros, former general manager Jeff Luhnow has struck back.
As first reported by the Los Angeles Times, Luhnow sued the Astros on Sunday in Harris County District Court for breach of contract. The 53-year-old former McKinsey & Company consultant insists that he is innocent of wrongdoing and was fired without cause.
Whether Luhnow’s firing was properly classified as “for cause” is crucial to the case.
Ordinarily, a “for cause” firing is one that relieves the employer of paying the remainder of a contract. It is normally justified when the employee is credibly accused of unlawful or unethical acts. An employment agreement often delineates which circumstances warrant “for cause.” Those circumstances are exceptional and seldom arise; it is rare for a general manager to be fired with cause.
Far more often, a general manager’s firing is without cause. This arises when an owner is unsatisfied with the GM’s job performance or simply wants new leadership. Absent evidence of wrongdoing, even the “worst” general manager—one whose teams are horrid and whose free agent signings and draft picks are busts—will be fired without cause. A without cause firing can prove costly, as the team is on the hook for all or a portion of the remainder on the deal.
Luhnow, whose suspension expired at the conclusion of the 2020 World Series but who hasn’t found another MLB job, contends that he is owed more than $22 million in guaranteed compensation. He signed a $31 million contract in 2018. Luhnow also insists that he is owed an unspecified dollar amount reflecting a profit interest in the team and other benefits.
Sportico has obtained a copy of Luhnow’s 17-page complaint, which is authored by Karl Stern and other attorneys from the law firm Quinn Emmanuel. Much of the complaint retells the Astros sign-stealing scandal from the vantage point of Luhnow. This narration showcases a central theme: Luhnow was innocent and has been wrongfully made into a scapegoat.
“The Astros,” the complaint insists, “fired Luhnow even though he had no knowledge of—or involvement in—the sign-stealing schemes.” The complaint goes on to grumble that “everyone above and below” Luhnow in the Astros organization, save for Luhnow and manager A.J. Hinch, “came away unscathed.” This was even true of video room employees and Astros players who directly partook in the infamous scheme. The plot entailed, among other tactics, the use of a camera covertly placed in Houston’s Minute Maid Park to record opposing teams’ catchers and coded bangs on a trash can located near the dugout to communicate upcoming pitches.
Luhnow also objects to the manner in which MLB commissioner Rob Manfred rationalized blame. He notes that Manfred’s report acknowledged “Luhnow neither devised nor actively directed the efforts of the replay room staff to decode signs in 2017 or 2018,” and yet Manfred found Luhnow “personally accountable for the conduct of his Club.” Manfred asserted there was “documentary and testimonial evidence that indicates Luhnow had some knowledge” of video room shenanigans. Luhnow disagrees, insisting there was “no evidence”.
To that point, Manfred and his staff said they reviewed tens of thousands of emails, texts, Slack messages, video clips and photographs. And yet, as Luhnow underscores, the report “could not point to a single document that Luhnow sent or received discussing in-game electronic sign-stealing.”
Luhnow concedes that Manfred identified several documents as troublesome but asserts they were taken out of context. Those documents include a PowerPoint slide discussing the decoding of pitchers’ signs (the decoding, Luhnow notes, occurred after games and was from 2016, before the scheme began) and an email from 2017 that referenced pitch tipping (though not explicitly in context of electronic surveillance). Luhnow also stresses that he took numerous steps to ensure that Astros officials complied with MLB rules, but they defied his warnings.
Finally, Luhnow charges that he was the victim of a corrupt bargain between Manfred and Astros owner Jim Crane. The complaint says the two men “exchanged a series of proposals” on how to resolve the matter. They landed on an agreement that left the Astros 2017 World Series intact and “absolved” Crane and players of blame, but sacrificed Luhnow.
Next Steps and Risks for MLB
The Astros will answer the complaint and forcefully deny the allegations. The team will insist that it was well within its legal authority to fire Luhnow for cause. It could add that, as the former boss, Luhnow should accept responsibility.
Yet if Luhnow’s lawsuit advances, pretrial discovery could prove problematic for MLB.
For one, MLB (like any business) doesn’t want its internal practices scrutinized by a court and subject to cross-examination. Likewise, the prospect of Astros and MLB officials—including Manfred—being forced to testify offers no upside and could lead to them making statements under oath that damage their reputations and that of the league. Luhnow and his legal team could disrupt whatever closure MLB believes it has reached with the scandal.
Also, while MLB’s investigation—which included interviews with 68 witnesses—appeared thorough, it was nonetheless limited in several ways that, in pretrial discovery, could raise questions about the report’s veracity and completeness. The league is a private organization and thus lacks subpoena powers. It couldn’t compel a witness to speak up or share information. Also, witnesses didn’t testify under oath. They were interviewed by private citizens and could knowingly lie, distort or omit without committing perjury or obstruction of justice. To that point, Luhnow contends others have untruthfully directed blame onto him in order to save themselves.
While Luhnow’s complaint demands a jury trial, he and his attorneys may be angling for a faster resolution: a settlement where the Astros agree to pay him a portion of the $22 million in exchange for him dropping the lawsuit and agreeing to confidentiality. For now, though, the Astros have other ideas.