Free agency history

A labor concept that allows a member of a professional sports team to sign with a team of his or her choice rather than be tied to a specific team under contract terms that do not allow freedom to move. The practice is now used by all professional athletes, although the practice originated in baseball.

Until 1976, baseball management maintained a “reserve clause” that tied players to a franchise for the duration of their careers unless traded, sold, or given an outright release. The reserve clause of player contracts had been a part of the game dating back to 1879 and the 1880s, and management sold player contracts at will. Management had sought ways to limit the movement of players from team to team. Initially, the leagues instituted rules that prohibited players from changing teams during the course of the season, but in 1879 the National League team management instituted a “gentleman’s agreement” to recognize five players on each team who would be reserved from negotiations with other teams, and thus through informal collusion kept player salaries down. In 1887, National League management represented by Albert Spalding agreed to a uniform contract, but included the “reserve clause” in the contract. Two years later, National League players issued a manifesto challenging the recent actions of management and in 1890 set out to form the Players League under player control. Spalding orchestrated the fall of the Players League after one year and allowed the players to return to the original franchises.

Major league baseball also enjoyed an exemption from antitrust legislation granted by Congress in 1922. This exemption made it possible for franchise owners to exercise a monopoly over the talent of players. As early as 1946, players presented legal challenges to the “reserve clause,” but the system would remain in place until the early 1970s. In 1968, player representative Marvin Miller negotiated a contract with management that raised minimum player salary to $10,000, and recognized a grievance procedure and the right of players to have representatives during salary negotiations. In 1969, a dispute over pension payments resulted in players not signing their contracts and a boycott of training camps by 391 players.

The first major legal challenge to the reserve clause came in 1969, when St. Louis Cardinals player Curt Flood attempted to block his off-season trade to the Philadelphia Phillies franchise. Flood’s major league career began in 1956, and he had spent 11 seasons with the Cardinals. Flood sued in federal court to overturn the reserve clause, and his lawyers argued that the restrictive contract measure violated the Thirteenth Amendment, which prohibits slavery and indentured servitude. Flood’s suit failed, but while the suit was still pending during the 1970 season, Flood refused to play for the Phillies. Instead, Flood agreed to a trade to the Washington Senators for the 1971 season, but only with the understanding that the trade in no way would impair the pending legal action.

The federal district court and appeals court rendered negative decisions on Flood’s suit, and on June 18, 1972, the U.S. Supreme Court also ruled against him. Flood’s career ended with these legal decisions. He saw limited playing time with the Senators in 1971 (13 games) and did not play again after the 1971 season. The majority of active major league players failed to support Flood’s suit, but some retired players such as Jackie Robinson testified on his behalf.

The next challenge came in 1973 as a consequence of terms agreed upon pursuant to a new collective bargaining agreement. Salary disputes could be submitted to impartial binding arbitration, and after 10 years with a team a player could veto a trade. In 1974, eight Oakland Athletics players submitted salary disputes to arbitration. The arbitrator rendered favorable decisions for Rollie Fingers, Ken Holtzman, Darold Knowles, Sal Bando, and Reggie Jackson, and unfavorable decisions for Gene Tenace, Joe Rudi, and Ted Kubiak. Owner Charles Finley suffered a major reverse with the loss of Jim “Catfish” Hunter. Hunter won free agent status because Finley had failed to fulfill the terms of his contract with Hunter. As an unrestricted free agent Hunter signed a contract with the New York Yankees franchise.

Two years later, in 1976, the reserve clause fell. The impartial arbitrator Peter Seitz ruled that at the end of a contract the team could exercise its option to retain the player for one year, but after the option year the player became a free agent. Management fired Seitz and challenged his decision in court, but the courts upheld Seitz’s ruling. This decision effectively ended the reserve clause. A collective bargaining agreement negotiated in 1976 contained the provision that a player became a free agent after six years. The Seitz ruling and 1976 collective bargaining agreement gave players greater control over their careers and dramatically altered the personnel of some franchises, as seen in the case of the Oakland Athletics. In 1976, 24 veteran players were on the Oakland roster; when a number of them left, they broke up a squad that had won three consecutive World Series championships.

Free agency resulted in an increase in salaries for star players, who would command salaries in the six and seven figures. Jim Hunter, for example, received $2.5 million a year to move to the Yankees franchise. The salaries of selected star players came close to the value of franchises created only a few years earlier with expansion in 1969. For example, a group headed by William Daley paid $5.25 million for the new Seattle Pilots franchise when it was created in 1969. The franchise sold for $10.8 million in 1970 to a group headed by Bud Selig, which moved the franchise to Milwaukee. As the salaries of star players increased, so too did the value of franchises.

Over the next 14 years, management attempted to limit the gains made by players through free agency. Players initiated a strike in 1981 in response to an effort by management to gain compensation for free agents. After seven weeks, management backed down. Arbitration decisions in 1987 and 1990 ruled that management had colluded to not hire free agents, thus violating the collective bargaining agreement. The 1987 ruling was the most serious, since it ruled that there was evidence of collusion in 1985 and 1986. A strike during spring training in 1990 was ended before the beginning of the season. The strike that ended the 1994 season in early August came in response to new management initiatives to limit player rights, including the imposition of a salary cap. Spring training for the 1995 season began with replacement players in camp, but management and players eventually resolved the dispute. During the last dispute, management emphasized the high salaries of the minority of elite players as a public relations ploy to undermine potential public support for the players’ cause.

The 1995 players’ strike ended after a New York federal judge issued an injunction against the team owners to prevent them from using replacement players, and for them to resume normal labor relations under the previous collective bargaining agreement. Following the issuance of the injunction, players agreed to suspend the strike, and a reduced-schedule season with regular players began on April 25. The end of the strike also found a number of free agents without teams, but the bidding for their talents began immediately after the final agreement to resume the season had been worked out. Those teams with deep pockets paid high salaries to acquire skilled free agents.

Further reading

• Markusen, Bruce. Baseball’s Last Dynasty: Charlie Finley’s Oakland A’s. Indianapolis: Masters Press, 1998. 
• Neft, David, and Richard Cohen. The Sports Encyclopedia: Baseball. New York: Grosset & Dunlap, 1993. 
• Rader, Benjamin. Baseball: A History of America’s Game. Urbana: University of Illinois Press, 1994. 

Robert H. Jackson