Here's an interesting clip from a News Story done on this issue in 2001.
Yankees owner George Steinbrenner never had a problem with moustaches, but he has always reviled beards and long hair. Several Yankees players, including Thurman Munson, Reggie Jackson, and Dave Winfield, have grown beards as contractual bargaining tools or simply, to rankle "The Boss." On Opening Day 1976, Steinbrenner even insisted that team publicist Marty Appel recall the Yankees yearbooks, as several players were depicted with long hair. Fifteen years later, in 1991, Tim Kurkijian documented in a Sports Illustrated article that Steinbrenner benched Don Mattingly because he refused to get a haircut. It is surprising that after nearly thirty years of managing the Yankees, nobody has reminded Steinbrenner of the Biblical Samson, whose strength was stultified after he got a haircut.