MLB’s Labor Movement and the Reserve Clause

Professional baseball is America’s oldest pastime. Officially beginning in 1876 with the inception of the National League, MLB’s roots trace back well over a century. As a result, baseball’s legacy is woven throughout the fabric of American history.

One of the most recurrent throughlines that exists within this legacy is baseball’s intersection with the labor movement. This is, in large part, due to the long-enduring influence of the reserve clause.

The reserve clause was a condition within player contracts that allowed for teams to retain the rights to players indefinitely at the expiration of their deals. Rather than the free agency process we know today, players would be unable to negotiate with or sign to any other team.

This was possible because team owners could simply re-up the players’ contracts from the year prior. Additionally, player contracts were initially standardized and largely distributed on a one-year basis. This meant that players had no leverage in contract negotiations, and no long-term security.

The only way for a player to change teams under the reserve clause was through trades or unconditional release. But trades occur largely without player input, and teams had no incentive to provide an unconditional release. Thus, the policy provided owners with near total control over players in MLB.

Given the level of deep inequity this arrangement created, one might assume this archaic system did not last long. They would then be shocked to learn that the reserve clause stood from its formal inception in 1879 until 1975 – nearly a century later.

Early Resistance

It should be no surprise that the reserve system was incredibly unpopular amongst players. The first attempt to unionize to dismantle this system began just a few years after the official beginning of the National League.

The Brotherhood of Professional Baseball Players was formed in 1885 in response to an expansion of the reserve system and $2,000 salary cap. Early adopters were hopeful that, by unionizing, they could get MLB to negotiate change. A few years later, the Brotherhood established the Players’ League was in 1890 to compete with the National League.

Unfortunately for them, these attempts were short-lived. The Players’ League lasted just one season, and the Brotherhood fell apart shortly thereafter. Team owners knew that the reserve clause was critical to their early financial success. As such, they fought tooth and nail to ensure they could maintain it as long as possible.

An early test for the reserve clause came following the inception of the Sherman Antitrust Act of 1890. Given the scope of MLB’s operations, it was reasonable to expect that MLB may be subject to the Sherman Act.

The Supreme Court, however, saw things differently. In 1922, the Court ruled in Federal Baseball Club v. National League that MLB’s activities did not constitute interstate commerce, and therefore were not subject to antitrust legislation.

This ruling stood unchallenged for nearly 30 years, before facing another test when Rep. Emanuel Celler announced that the House Judiciary Committee would take a look at MLB’s exemption from the Sherman Act.

Hearings took place over the next few years, but Rep. Celler ultimately advised Congress not to take action against MLB. This sent the matter back to the Supreme Court in 1953, where they upheld MLB’s antitrust exemption and reserve system yet again following Toolson v. New York Yankees, Inc.

The Holdouts

In the wake of this second Supreme Court decision, MLB owners were emboldened to expand the reserve system. In doing so, they hoped to maintain their profitability while broadening their influence

They had already expanded their interest in the National Association of Professional Baseball Leagues (NAPBL). During the Great Depression, MLB began to establish what we now know as “farm systems”. MLB parent clubs owned the contracts of these teams, which greatly expanded their financial influence.

This meant MLB could control not only the contracts of major leaguers, but virtually all professional baseball players. This period of mass expansion for the reserve clause stood largely unchallenged for a substantial period of time.

Besides, what could the players do? The matter was already litigated by the Senate and in the Supreme Court – twice. Whether they were stars or just getting their foot in the door, players had next to no leverage. Plus, they could rarely afford to refuse contracts due to their own financial circumstances.

As time went on, team valuations continued to rise. The disparity between player salaries and league revenue continued to widen, and the labor movement awakened amongst players once again.

One of the more prominent ways this was sparked was through players holding out on signing contracts, leveraging their team contributions against owners in hopes of better pay.

Drysdale and Koufax

Amongst those who held out on signing contracts, Sandy Koufax and Don Drysdale served as an excellent example for how star players could build leverage in contract negotiations.

In 1966, Koufax and Drysdale were fed up. Both players had grievances with the manner in which prior contract negotiations were conducted with the Los Angeles Dodgers. Koufax, in particular, believed he had earned a substantial raise. He had just won a second Cy Young award and World Series MVP honors the year prior.

The Dodgers’ general manager, Buzzie Bavasi, would not budge. Instead, Bavasi developed a plot to pit the two aces against one another. No matter the figure presented in individual negotiations with Koufax or Drysdale, Bavasi would tell one player that the other was asking for less.

Koufax and Drysdale eventually figured this out, and were naturally frustrated by Bavasi’s scheme. At the suggestion of Drysdale’s wife, Ginger, the pair decided to try and negotiate together in order to foil Bavasi’s strategy. They also tapped J. William Hayes, a business manager, to serve as their agent in the process. 

The two informed Bavasi that they would refuse to negotiate alone. Additionally, they refused to sign a contract until their demands were met. Their proposal was an unprecedented one: a combined $1 million on a three-year deal.

Neither Koufax nor Drysdale showed up for spring training that year, and instead made plans to appear in the film Warning Shot if negotiations stalled further. Around the same time, Hayes prepared to file a lawsuit against the Dodgers. He would argue that De Havilland v. Warner Bros. Pictures prevented contracts from being extended past seven years in California.

With this potential lawsuit threatening the very existence of the reserve clause and the pair still holding strong, Bavasi now seemed to be the one without leverage. The two would sign shortly thereafter, with the Dodgers conceding massive raises for both players. 

The pair did not end up receiving the lofty contract they had aspired to. In spite of this, they accomplished far more than adding to their paycheck. These negotiations struck a sizable blow against the reserve clause by showing that ownership was not invincible, and serving as an example for future players.

Jim Bouton

Just a few years earlier, Jim Bouton had undergone a similar process with the New York Yankees. One of the first true successful holdouts of this era, Bouton tripled his $10,000 salary from 1963 to 1965.

He was able to accomplish this by leveraging not only his performances, but his grievances with prior negotiations. He refused to cave to pressure from the team to settle for less, arguing that if they wanted to undercut him, it would not be of his own volition.

His story was initially one of success that could provide a model for others seeking to increase pressure on the league. However, the Yankees eventually made an example of him to stifle this effort.

As Bouton’s health declined, Bouton’s leverage quickly dissipated with his performances. He could no longer draw from the same well, and the Yankees continued to hold a grudge against him for their concessions in prior years. By 1968, the Yankees had sold Bouton’s contract off for dirt cheap.

This experience would lead Bouton to release Ball Four in 1970. In this book, he detailed the harsh conditions of players’ lives under the reserve clause through the lens of his 1969 season with the Seattle Pilots.

Ball Four would go on to play a crucial role in the players’ fight to abolish the reserve clause. Bouton was even called to read sections of the book during future arbitration proceedings. By doing so, Bouton helped demonstrate the systematic nature of exploitation abetted by the reserve clause.

Bouton’s story may not have ended in triumph, but his pursuits were not for nothing. Like Koufax and Drysdale, his efforts helped continue to chip away at the oppressive reserve system. Around the same time, a challenge was brewing in St. Louis that would spell the beginning of the end for the reserve clause.

Curt Flood

Of the prominent holdouts of this era, Curt Flood’s case was perhaps the most consequential. The prior two instances revolved around players pushing back against their team owners for higher salaries. However, Flood’s challenge was different.

In 1969, Flood was in the midst of his 12th season with the St. Louis Cardinals. During his tenure with the Cardinals, Flood was named to the All-Star team three times, won seven Gold Glove awards in the outfield, and became a two-time World Series champion.

Despite this success, the Cardinals traded Flood to the Philadelphia Phillies in October of that year. This news devastated Flood for a number of reasons, and he would end up challenging the trade and refusing to report to the Phillies.

Flood had spent 12 years building a life in St. Louis among family and friends. Additionally, the Cardinals had been a powerhouse throughout much of Flood’s career. Meanwhile, the Phillies were among the league’s worst teams at the time.

However, beyond Flood’s personal and professional grievances with the trade, he believed the matter to be bigger than himself. As a black professional athlete who began his minor league career in the Jim Crow South, Flood was subject to brutal and persistent degradation, and the dehumanizing conditions of segregation. 

Flood later became a prominent figure in the Civil Rights Movement. He openly condemned segregation policies, and joined Jackie Robinson in Mississippi to speak at protests organized by the NAACP in 1962. Flood’s advocacy for change and personal experience with injustice were deeply influential in his choice to formally challenge the trade.

A few months after the trade, Flood wrote a letter to commissioner Bowie Kuhn. In this letter, he declared, “I do not feel that I am a piece of property to be bought and sold irrespective of my wishes.”

The First Domino Falls

Flood’s letter marked a pivotal moment in the players’ fight against the reserve clause. Within it, Flood demanded that Kuhn allow for him to become a free agent, asserting that he was within his rights to negotiate with other teams.

He had also met with the director of the recently established MLBPA, Marvin Miller. Miller indicated to Flood that the union was ready and willing to help fund legal action against MLB. Once Kuhn denied his request for free agency, Flood decided to move forward with filing a $1 million lawsuit on the grounds of antitrust violations.

With this filing, Flood sacrificed not only his $100,000 salary, but the remainder of his playing career. In a 1970 interview with Howard Cosell, Flood was asked to justify his objections to this trade given his lucrative salary. Flood responded, “A well-paid slave is nonetheless a slave.”

Flood was subject to immense public scrutiny throughout the litigation process. He received hate mail and faced death threats on a regular basis. Still, he pressed onwards, and Flood v. Kuhn would eventually reach the Supreme Court in March of 1972. 

Unfortunately, Flood’s challenge ultimately proved unsuccessful. The Court ruled 5-3 in favor of MLB, citing past precedent with regards to MLB’s antitrust exemptions. In spite of this, Flood’s case still dealt a significant blow to the reserve clause.

While Flood lost the case, the Court conceded that the original grounds for MLB’s antitrust exemption were shaky. They also ruled that MLB’s operations constituted interstate commerce after all. Thus, the gates had finally opened for a legal dismantling of the reserve system.

McNally and Messersmith

Just a few years later, the implications of Flood’s challenge would finally come to fruition. After the 1974 season, pitchers Dave McNally and Andy Messersmith had their contracts renewed for the 1975 season with their respective teams.

However, neither player would sign their contracts during this year. The end of the season came and went, and both McNally and Messersmith remained unsigned. As a result, the pair asserted that they were free to negotiate with other clubs in 1976.

The owners denied this claim, citing the reserve clause as a mechanism for perpetual renewal. However, knowing the foundation of the reserve clause had been shaken in Flood v. Kuhn, the MLBPA filed labor grievances on behalf of McNally and Messersmith.

These filings led to arbitration hearings in front of a panel composed of representatives from both MLB and the MLBPA, as well as independent arbitrator Peter Seitz. After three separate days of proceedings, Seitz came to a shocking decision.

Despite the historical precedent upholding the reserve clause, Seitz ruled in favor of McNally and Messersmith. The ruling not only stated that McNally and Messersmith were under “no contractual bond” with their former teams, but explicitly protected both players’ ability to negotiate and sign with other teams.

MLB attempted to appeal this decision multiple times, but Seitz’s ruling remained standing. After nearly a century, the players had done the unthinkable. The reserve clause was blown out of the water, and the concept of a free agency system was tenable for the first time in MLB’s history.

Baseball After the Reserve Clause

After the Seitz decision, free agency quickly became official policy with the ratification of the 1976 CBA. The initial structure of free agency was far from perfect. But, the fall of the reserve clause put professional baseball on the path to becoming the sport we know and love today.

It is difficult to imagine what MLB would look like without free agency. There are certainly ways the process could be improved upon. Regardless, the free agency system has been far more equitable than the reserve system before it.

Players get the opportunity to pursue the full value of their abilities on the open market. In return, front offices get a yearly opportunity to invest in the future of their franchises and build towards a championship-caliber team.

Frustrations between these two sides have still not resolved for a whole host of reasons. It is unlikely that they will resolve anytime soon. Discussions around the upcoming 2026 CBA negotiations and the potential institution of a salary cap have dialed up tensions even further.

As these discussions begin to populate the public discourse, it will be all the more important to remember this history. The labor negotiations taking place between players and MLB owners are far from novel. Rather, they represent the continuation of a struggle for power that has persisted since the very beginning of professional baseball.

In September 2010, Jim Bouton attended a symposium to discuss Ball Four. Forty years after its publication, Bouton felt that the book’s impact still resonated. “When people complain about the big salaries that players now make, I tell them that for 100 years the owners screwed the players. For the past 30 years, the players have screwed the owners,” he said.

“The way I look at it, the players have 70 years to go!”