The Orioles agreed to pay relief pitcher Xavier Hernandez $1.75 million yesterday in order to settle a grievance brought against the club for releasing the former free agent last winter.

Hernandez filed the grievance when the Orioles refused to assume his two-year, $2.75 million contract after a team physical revealed a partial tear of his right rotator cuff.

The club's exposure was $3.2 million -- Hernandez's $2.75 million plus an accompanying $475,000 in luxury tax.

After the first day of hearings, according to Orioles general counsel Russell Smouse, the club decided it could not defend its announcement of the signing even though Hernandez had not yet submitted to a compulsory physical.

"I think it's important for the Orioles and for baseball," Smouse said. "Unfortunately, it became apparent during the hearing itself that the premature announcement of the signing before he took the physical presented us with an insurmountable obstacle."

The Orioles were represented by Smouse, Frank Cooneley of Major League Baseball's labor relations department, and local labor attorney Eddie Gutman.

Both sides were able to appoint a member to the arbitration panel. The Major League Baseball Players Association assigned Eugene Orza and Major League Baseball appointed Rob Manfred. Richard Bloch headed the panel.

Hernandez's representatives, including agent Barry Meister, argued that the club had not specified a physical was required to enforce the contract.

By making public their agreement, and subsequently placing Hernandez on their 40-man roster, the Orioles had signed him, according to Hernandez's representatives.

The Houston Astros subsequently signed Hernandez to a $250,000 minor-league contract but released him during spring training.

The New York Mets signed him to a minor-league deal last week.

Hernandez will receive the award in increments of $950,000 this year, $700,000 in 2000 and $100,000 in 2001.

Pub Date: 5/19/99