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Why Won’t the Yankees Dump A-Rod?

Fierce Ideas (orange lightbulb)

Tampa, Fla.

When Alex Rodriguez arrived at his workplace here on Monday, his bosses weren’t happy.

As usual, the communication between Rodriguez, the employee, and the New York Yankees, his employer, was nonexistent. Rodriguez hadn’t told his superiors that he was reporting to work two days early, and it led to yet another awkward situation for his company.

If this sort of tension existed in almost any other line of work, such an employee might well have been jettisoned long ago. Coming off a season-long suspension for performance-enhancing drug use, which he initially fought, Rodriguez has by his own admission been “a headache.” He isn’t even a high-performing asset anymore, having posted a pedestrian .771 on-base-plus-slugging percentage in 2013.

So why won’t the Yankees just dump him?

The short answer is that Rodriguez is owed at least $61 million over the next three years, whether he is on the Yankees’ roster or not. The Yankees might as well see if they can get something for their money. They also could recoup a significant portion of it through insurance if the 39-year-old Rodriguez physically breaks down—a further motivation for taking no action just yet.

On Thursday, Yankees general manager Brian Cashman proclaimed the slugger’s roster spot to be safe. “He’s on the team,” Cashman said. “He’s got a three-year contract.”

But experts in workplace issues say that in any industry, there comes a point where the damage that a toxic situation does to the firm outweighs the financial hit it would take by cutting the employee loose.

That is the calculus the Yankees are engaged in this spring: watching each at-bat and batting-practice session, trying to determine Rodriguez’s on-field value—making this spring training something of an object lesson in employee worth.

“You’re dealing in a situation where the Yankees seem powerless,” said David Lewis, president and chief executive of OperationsInc, a Connecticut human-relations outsourcing and consulting firm. “And with the kind of money you’re talking about here, and with the public aspect of this—most employers don’t have to deal with that.”

Rodriguez is in the eighth year of a 10-year, $275 million contract. It began with him hitting for a .965 OPS in 2008, but injuries, declining play and performance-enhancing drug revelations have bedeviled him since.

In 2009, Rodriguez admitted to steroid use earlier in his career. In 2013, he sued baseball in an attempt to overturn his drug suspension, as well as the Yankees’ team doctor for allegedly misdiagnosing a hip injury. He later dropped the suits. Last week, Rodriguez apologized to Major League Baseball, the Yankees and others in a handwritten letter.

Rodriguez also stands to make roughly $30 million in marketing-related bonuses for reaching home-run milestones, beginning with Willie Mays’s career total of 660, only six home runs away. But a person with knowledge of the situation said the Yankees believe they can successfully contest that, given that the bonuses are tied to the team’s ability to market Rodriguez, and the organization believes his drug issues have made that moot.

Asked if he thought the Yankees were really want him to succeed, Rodriguez didn’t exactly trumpet the support he feels from his employer.

“I don’t know,” he said. “You’ve got to ask them. But I’ve created a big headache for a lot of people.”

In many instances of difficult employer-employee relationships, the company wields most of the power, experts say. Employers usually have somewhat subjective standards they can apply—“conduct detrimental to the company,” for instance—that allow them to begin negotiations on a potential buyout from a position of strength. Or they can simply act first, terminating employment and putting the onus on the employee to contest it—with the company relying on its superior resources in a legal battle.

Not so here. Baseball contracts are extraordinarily difficult to void, and it takes some desire from both sides to negotiate an exit. Rodriguez, hoping to rehabilitate his image through baseball, has little reason to compromise.

“What is A-Rod, or any key employee’s, motivation for taking anything less than their full contract value? Probably none,” Lewis said. “If you don’t want me around, and find me to be not enough of a contributor to have me here, then send me home—but keep the checks coming. I don’t think it’s any different in corporate America.”

Yet even if Rodriguez can prove he has some on-field value, cutting him and eating that $61 million may still be the best route for the Yankees as an organization, said Halley Bock, president and CEO of Fierce, Inc., a Seattle-based company that addresses workplace conflict. The productivity lost when such employees control the conversation in some companies is massive, Bock said.

“I guarantee you it’s costing you a lot more than you think,” he said. “Because it’s costing everyone else on your team a great amount of energy as well, to put up with the stress of the situation. There are tangible and intangible costs that are paid by keeping a toxic employee. I would spend a lot of time trying to correct it; if the employee is unwilling or unable to respond, I would go with the old adage of hire slowly, fire quickly.”

Stress and distraction are hardly measurable values, but Yankee players have already had crowds of reporters around their lockers asking about Rodriguez, none more so than Chase Headley, who is projected to start at third base ahead of A-Rod.

“Part of our job is dealing with media and dealing with the circumstances that come up,” Headley said. “For me, I’m going to do my part about that, but really, he’s another teammate. That’s what’s important.”

Winning is the goal, surely, but baseball is also entertainment, and if the Yankees aren’t winning this season, perhaps Rodriguez has value in other ways—which is one argument for keeping him around regardless of how well he hits. For a Yankee team that lost beloved icons Mariano Rivera and Derek Jeter to retirement in successive seasons, a little hubbub around Rodriguez could help drive ticket sales.

In any case, the Yankees continue to move forward with A-Rod. Although his spot on the team seems safe, manager Joe Girardi said has said he would have to prove himself, having not played since 2013.

Rodriguez, who participated in the team’s first full workout Thursday, has embraced that challenge. “I hope I get one spot out of the 25,” he said. “That’s all I’m focused on right now.”

[Former] Fierce, Inc. President & CEO, Halley Bock was quoted in The Wall Street Journal article written by Daniel Barbarisi.


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