Reopening the Deal: MLS, the Pandemic and the Force Majeure Clause

Timeline

1. Feb 2020MLS and the MLS Players Association reach a tentative five-year collective bargaining agreement, which neither side ratifies before the pandemic.
2. Mar 12, 2020MLS suspends its season because of COVID-19.
3. May 30–31, 2020Commissioner Don Garber issues what he calls the first lockout threat in MLS history.
4. Jun 3, 2020Players ratify an amended CBA through 2025 with salary and bonus cuts, a reduced media-revenue share and a new force majeure clause; the season resumes with a tournament in Orlando.
5. Dec 29, 2020Less than a week after the season ends, MLS notifies the union that it will invoke the force majeure clause, starting a 30-day negotiation period.
6. Jan 28, 2021The union proposes extending the agreement through 2026, describing more than $200 million in total concessions.
7. Late Jan 2021MLS extends the negotiating period by a week and says its labor committee has authorized a lockout if no deal is reached by Feb. 4.
8. Feb 8, 2021Both sides ratify a CBA running through the 2027 season, with full 2021 pay and expanded free agency from 2026.

The ethical issues

• Whether an extraordinary event justifies reopening a collective agreement that was just negotiated.
• The use of lockout threats when players have little leverage.
• Who should bear the financial losses from a pandemic: owners, players or both?
• Whether the union should have accepted a force majeure clause that could later be used against it.
• Using a crisis to secure long-term gains, such as an extension through a home World Cup.

Stakeholders

Stakeholder	Interests & obligations
MLS players	Keeping negotiated pay and protecting health while playing during a pandemic.
MLS Players Association	Protecting members' salaries and the gains won in February 2020.
MLS and club owners	Managing large revenue losses and gaining cost certainty.
Future MLS players	Salary growth and bargaining leverage in later years of the deal.
Fans and broadcast partners	Games being played without a work stoppage.
Club and league staff	Jobs and pay that depend on the league's finances.

The case

Major League Soccer and its players negotiated three collective bargaining agreements in about 13 months.^[9] The first, reached in February 2020, was meant to last five years.^[5] The pandemic wiped out that deal before it was ratified, and the league used the threat of a lockout to reopen it twice. The second time, it relied on a force majeure clause, a provision for extraordinary events, that it had insisted on adding just months before. The case asks whether a crisis justifies reopening a deal, and whether the way MLS did so was fair.

Background

In February 2020, MLS and the MLS Players Association reached a tentative five-year agreement. The union counted significant gains, including a share of revenue from the league’s next media-rights deals.^[5][8] Neither side had ratified it when MLS suspended its season on March 12, 2020.^[2][4]

Commissioner Don Garber later said the pandemic would cost the league $1 billion in revenue.^[1] Because the February deal had not been ratified, ESPN reported, MLS had “an opening to renegotiate some of its terms.”^[4]

The rules and governance

A collective bargaining agreement binds the league and the union for its term. In the United States, either side may use economic pressure when an agreement expires or is not in force: players may strike, and owners may lock players out. A force majeure clause lets a party suspend or reopen an agreement when an extraordinary event makes performance impossible or very difficult. The scope of such a clause depends on how it is written.

The June 2020 deal

In late May 2020, Garber issued what he called the first lockout threat in MLS history. “It was something that, as the leader of this league, was necessary to get to the point today that we have reached an agreement,” he said.^[1] On June 3, players ratified an amended agreement running through 2025.^[2]

According to ESPN, citing a union source, the concessions totaled more than $100 million. They included an across-the-board salary cut of 7.5 percent starting with the May 31 payroll, a $5 million cap on performance and individual bonuses, and a cut in players’ share of new media revenue in 2023 from 25 percent to 12.5 percent.^[2] Other outlets described the pay cut as 5 percent, which ESPN later called a “5% annualized cut”.^[1][4][8] The union later put the total value of its June concessions at more than $150 million over the life of the deal.^[5]

The league also secured a force majeure clause. ESPN reported that MLS had wanted the clause tied to attendance numbers in case of a second wave of COVID-19, but the players pushed back. The approved version let either side back out with 30 days’ notice if the agreement became economically unfeasible.^[2] The season resumed with a tournament in Orlando. Garber acknowledged that asking players to spend up to 35 days away from home was “not an easy ask.”^[1]

The force majeure notice

On December 29, 2020, less than a week after the season ended, MLS told the union it would invoke the clause. That obligated both sides to negotiate changes in good faith for 30 days, and the June agreement could be terminated if they failed.^[3][4] Deputy commissioner Mark Abbott said COVID-19 restrictions on attendance would continue into 2021 and that MLS “needs to address the ongoing challenges caused by the pandemic.”^[4]

The union called the move “tone-deaf.” It said the league was setting in motion a process that “could result in the league and its owners abandoning the existing Collective Bargaining Agreement and commitments made to players for the second time in less than nine months.”^[3]

The second lockout threat

On January 28, 2021, the union offered a second extension, through 2026. It said that, combined with the June deal, this would mean more than $200 million in concessions and “one year for each of the years substantially impacted by the pandemic.”^[5] The union argued that players had “unquestionably borne a substantial portion of the league’s Covid-related financial losses” and that a work stoppage “would be catastrophic for the standing of MLS.”^[5]

MLS said it had offered players 100 percent of their 2021 pay in exchange for a two-year extension through 2027. It extended the negotiating period by a week, stating that its labor committee had “voted unanimously to authorize the league to terminate the CBA and institute a lockout” if no deal was reached by February 4.^[6]

The league’s case

MLS set out its position in a question-and-answer page published during the extended talks. It said the league and its clubs had lost “nearly $1 billion” in 2020, much of it because of limits on attendance, and that it expected “another year with substantial financial losses.”^[10] It described the force majeure provision as one both sides “agreed last spring” could be invoked in December 2020 if the pandemic continued beyond the season. Current restrictions, it said, made it likely that matches could not be played “without significant limitations on the number of spectators.”^[10]

The league said players had made clear they “were not willing to accept salary reductions in 2021.” It had therefore offered full pay in exchange for the two-year extension, under which “MLS owners assume the financial losses from the pandemic this year” while gaining “an opportunity to recoup a portion of those economic losses.”^[10] It compared the resulting term with the longer agreements in the NFL, NBA and NHL. It noted that the NHL and its union had extended their agreement by four years in 2020, and it said its proposal sought no “additional restrictions on players’ free agency rights.”^[6][10] In answer to the question of why wealthy owners needed players’ help, it said owners had been “in investment mode for many years” and that it was “fair and reasonable to ask the players to contribute to the League’s long-term stability by extending the CBA.”^[10] It also said the league would keep paying players’ and families’ health insurance premiums during any lockout.^[6][10]

Aftermath

On February 8, 2021, the league and the players ratified an agreement running through January 31, 2028.^[7] Players received full compensation in 2021. Beginning in 2026, players aged 24 with four years of MLS service would be eligible for free agency, rather than five years.^[7] Team salary budgets were frozen at $4.9 million for 2021 and 2022.^[7][9] The players’ share of new media revenue would be 12.5 percent in 2023 and 2024, rising to 25 percent from 2025.^[7] The clause remained but could not be invoked again until December 1, 2021.^[8]

Reactions differed. Garber thanked players for “their thoughtful and collaborative approach.”^[7] Colorado Rapids goalkeeper Clint Irwin, a member of the union’s executive board, told ESPN: “When management repeatedly threatens a lockout via press release, it’s difficult to have confidence in any part of the negotiations.”^[8] An unnamed player agent called it “unconscionable” that the union had accepted the clause in June.^[8] Union executive director Bob Foose described the relationship with the league as “entirely transactional.”^[8] The Los Angeles Times reported that the league had insisted on the longer deal “in an effort to assure labor peace through the 2026 World Cup.”^[9] The union’s statement after the vote did not discuss the terms. It thanked its executive board and bargaining committee for six weeks of work and thanked other players’ associations for “public statements of support and solidarity.” It also thanked supporters’ groups, whose voices it said “spoke loudly,” and it ended: “Players are ready to play.”^[11]

The core dilemma

The pandemic was a real emergency, and MLS’s losses were large. But the league twice used the threat of a lockout to change terms players had already agreed to. The second time, it relied on a clause it had added during the first. And the final deal did more than share the 2021 losses: it extended the agreement past the 2026 World Cup, the moment of greatest leverage for the players. The dilemma is when a crisis justifies reopening a bargain, and how to tell emergency relief from opportunism.

Competing values

• Keeping promises vs. adapting to change: agreements create trust, but circumstances can make them unworkable.
• Shared sacrifice vs. fair distribution: players and owners both lost money, but they had different ability to absorb losses and different shares of long-term gains.
• Economic pressure vs. good faith: lockout threats are legal bargaining tools but can undermine trust.
• Short-term stability vs. long-term leverage: players kept 2021 pay but gave up bargaining power in the run-up to the World Cup.
• Health risk vs. economic need: players took on health risks to complete the 2020 season while also taking pay cuts.

Strongest arguments

For the league’s approach: MLS faced losses that Garber put at around $1 billion and an uncertain 2021 with restricted attendance.^[1][4][9] The February 2020 deal was never ratified, and the June clause was negotiated and accepted by the union.^[2][4] The league’s final offer kept players’ 2021 pay whole and did not seek new limits on free agency.^[6][7] The deal preserved a record of no work stoppages since 1996.^[7]

Against it: Players had already given up more than $150 million and taken health risks to finish the season.^[1][5] The clause was added under a lockout threat, and the league used it within days of the season ending.^[1][3] The final agreement extended the deal through 2027, giving the league “considerable distance” from the 2026 World Cup and reducing the players’ future leverage, according to ESPN’s analysis.^[8] The union’s own executive director described the relationship as “entirely transactional.”^[8]

Applying the frameworks

Kantian (duty)

Kant’s test is whether a principle could be universal. “Reopen an agreement whenever circumstances make it costly” could not be: if every party did so, agreements would mean nothing. But “Reopen an agreement only through a clause both sides accepted” is easier to defend. The harder question is whether the clause was freely accepted, since it was added under the threat of a lockout. A Kantian would also ask whether players were treated as partners or as a cost to be cut.

Justice & fairness (Rawls)

Behind a veil of ignorance, not knowing whether you would be an owner, a star, a minimum-salary player or a future draftee, how would you share pandemic losses? You would probably accept temporary cuts in proportion to each group’s ability to bear them. You would be more wary of permanent changes, such as a longer contract term, adopted under pressure. ESPN noted that the losers might be “low- to mid-range players who will be entering the league in the coming years.”^[8]

Utilitarian

A utilitarian weighs the benefits of avoiding a work stoppage against the costs. Games continued, broadcasters and fans got a season, and jobs that depended on the league were protected.^[1][7] The costs include the players’ losses, the long-term damage to the labor relationship and the risk that future negotiations become more hostile. If damaged trust leads to a future stoppage, the long-run balance could turn negative.

Walk it through: the Simple Decision Model

1. Spot the issue: A league uses a pandemic and lockout threats to reopen a labor agreement twice, including through a clause added in the first renegotiation.
2. Gather facts: League and club finances, actual losses, the clause’s wording, health risks to players, the value of each concession and the long-term effects on pay.
3. Test options: Temporary pay deferrals repaid later; loss-sharing tied to audited revenue; narrow, time-limited crisis clauses; mediation instead of lockout threats.
4. Check codes and law: The CBA and its force majeure clause, U.S. labor law on lockouts and good-faith bargaining.
5. Decide and document: Separate pandemic relief from permanent changes and record the reasons for each.
6. Communicate and follow up: Share financial data, review crisis provisions after the emergency and rebuild the working relationship.

What’s settled and what’s contested

• Settled: the February 2020 deal was never ratified; MLS threatened lockouts in June 2020 and early 2021; players accepted pay and bonus cuts and a force majeure clause in June 2020; MLS invoked the clause on December 29, 2020; the February 2021 agreement runs through January 31, 2028, with full 2021 pay and expanded free agency from 2026.^{[1][2][3][4][7]}
• Contested: whether the league used the crisis to gain long-term advantages; whether the union should have accepted the clause; how much players should have shared the league’s losses; the exact size of the pay cut, reported as 7.5 percent or 5 percent.

Why this case matters

Crises test agreements. The pandemic forced leagues and unions across sport to renegotiate, and the MLS case shows how emergency clauses and lockout threats can shift power. It raises questions that apply to any long-term contract: when should a party be allowed to reopen a deal, and how can it do so without destroying the trust that makes the next deal possible?

See also: The 2021–22 MLB Lockout: A 99-Day Fight Over Baseball’s Money.

Key terms

Trust

The public’s belief that what they are watching is real. Integrity failures are ultimately failures of trust.

Stakeholders

Everyone with something at stake in a decision: athletes, coaches, parents, officials, fans, employees, sponsors, media, communities and regulators, including the less visible ones.

Distributive justice

Fairness in how scarce opportunities, resources, benefits and burdens are shared.

Legal but unethical

Law sets out what can be punished; ethics asks what is right. Compliance is a minimum, so an action can be lawful and still wrong.

Multiple points of view

Analyzing a dilemma from each stakeholder’s position in turn (athlete, parent, coach, administrator, official, bystander) before reaching your own reasoned view.

Agency

An athlete’s ability to make decisions and act independently about their body, career and voice.

Definitions from the Ethics Cases glossary.

Discussion questions

1. MLS reopened a deal that had not been ratified when the pandemic hit, then invoked a clause added during that renegotiation. Is either step ethically different from simply breaking an agreement?
2. Should players share a league's pandemic losses when they do not share ownership profits in normal years?
3. The 2021 agreement extended the CBA through 2027, past the 2026 World Cup. Was it fair for the league to use the crisis to secure that extension?
4. One agent called the union's acceptance of the force majeure clause 'unconscionable.' Was the union wrong to accept it, given the lockout threat?
5. What would a fair crisis clause in a sports labor agreement look like?

Sources

1. How MLS Avoided a Lockout, How the CBA Has Changed and the Fate of the League in 2020 — Sports Illustrated
2. MLS lockout avoided as players, league ratify bargaining agreement to 2025 — ESPN
3. Statement on Force Majeure Notice — MLS Players Association
4. MLS informs players' union that it will invoke force majeure clause in CBA - source — ESPN
5. MLSPA Statement on Proposal to MLS — MLS Players Association
6. Major League Soccer statement on ongoing discussions with MLSPA — MLSsoccer.com
7. MLS & MLSPA ratify new Collective Bargaining Agreement — MLSsoccer.com
8. What the new MLS CBA deal means for owners, players and the '26 World Cup — ESPN
9. MLS players ratify seven-year collective bargaining agreement with league — Los Angeles Times
10. MLS CBA discussions: Frequently asked questions (Feb. 2021) — MLSsoccer.com
11. Statement on MLS Players' Ratification Vote (Feb. 8, 2021) — MLS Players Association