1. Would the failure of the club to act in 2004 in response to Giambi’s admissions of steroid use in 2002 and 2003 have a bearing on the case?

2. Which contract would be held as superior, the Yankees’ individual contract with Giambi or the collective bargaining agreement between the baseball ownership and the MLBPA? Explain your answer.

According to newspaper reports of federal grand jury testimony, among baseball’s active major leaguers, only three players have admitted using performance enhancing drugs. However, Barry Bonds and Gary Sheffield have denied knowing that the “nutritional supplements” were steroids. Bonds in his testimony indicated that he thought the supplements were actually flaxseed oil.

In his December 2003 testimony, however, Jason Giambi did not quibble. Giambi—signed to a $120 million, seven-year contract by the New York Yankees in 2001— admitted using steroids both prior to and during playing for the Yankees in 2002 and 2003. His honesty, in fact, has become a thorn in the side of the administrators of the supposed “national pastime.” In a USA TODAY article published in early 2007, Giambi commented on steroids and their use in professional baseball during the 1990s and early 2000s. He said, “What we should have done a long time ago was stand up—players, owners, everybody—and said, ‘We made a mistake.’ We should have apologized back then and made sure we had a rule in place and gone forward. . . . Steroids and all of that was a part of history. But it was a topic that everybody wanted to avoid. Nobody wanted to talk about it.” In reality, Major League Baseball (MLB) did not put in a rule against the use of performance enhancers until 2004. That action was taken mainly as a result of a federal grand jury investigation into a lab in San Francisco Sports & Entertainment Law that had allegedly provided such substances to several top players. Reacting to Giambi’s comments to USA TODAY, the Yankees were again said to be considering enforcing a clause in Giambi’s contract allowing the club to void it if he had used illegal substances while with the team in 2002 and 2003. THE LAW The avoidance would have terminated the $20 million-plus payments per year required under Giambi’s contract. The Yankees had made a similar evaluation back in 2004 but did not act as terminating the contract would have been opposed by the Major League Baseball Player’s Association (MLBPA). The MLBPA’s collective bargaining agreement with baseball’s ownership arguably precluded such independent action and was likely to be held by a court as superseding the conflicting terms in the Yankees’ contract with Giambi. THE ISSUE Can Giambi’s contract with the Yankees be voided due to his steroid use? HOLDING Case not litigated yet.