History of Labor Struggles in MLB: The Free Agency Era Begins

photo: Andy Messersmith and Dave McNally (Baseball Hall of Fame)

The Cardinal Nation’s series highlighting the history of labor struggles in MLB continues with a lockout to protest the onset of free agency. Author Marilyn Green is a retired attorney with background in employment law.

The 1975 arbitration decision granting free agency to pitchers Andy Messersmith and Dave McNally ushered in a new era of economics in Major League Baseball. As the appeals on the decision were pending, the owners and the union began negotiations on a new Basic Agreement. Unsurprisingly these negotiations were tense and fraught with hurdles. With the Peter Seitz decision in hand, the players were satisfied with the one-year option and then freedom to pick their next destination. Owners on the other hand wanted no such arrangement and their demands for a new negotiated reserve system kept the path to a new Basic Agreement very bumpy.

Peter Seitz

The previous Basic Agreement had expired on December 31, 1975, and the owners came to the union with threats of a lockout and a refusal to discuss a new reserve system while the appeals were still pending. They also kept Messersmith in limbo regarding a new contract, as all owners would make no bid on his services without approval from Commissioner Bowie Kuhn. The league’s stalling tactics kept the negotiations at a stalemate into late February 1976.

The threats of a lockout became a reality as the owners locked the players out of spring training on March 1. Executive Director Marvin Miller advised his unsigned players not to sign contracts, and some players set up workouts near their spring training camps to keep in shape while they awaited the end of the lockout. Miller worried about his players’ resolve, and in fact one player, Jim Palmer, ignored Miller’s advice and signed a contract with the Orioles.

On March 10, 1976, the Eighth Circuit Court of Appeals in St. Louis upheld the Seitz decision. The owners decided not to pursue the case to the Supreme Court. The final end to the litigation brought a softening of the hard line stance of the owners and negotiations opened up on a new reserve system.

In the meantime, Messersmith and his agent let the teams know that he would start accepting offers on March 16. His prior team, the Dodgers, declared they would not be a bidder. Dodgers owner Peter O’Malley, one of the wealthier owners, pleaded poverty and told Messersmith he couldn’t afford him. (McNally had previously planned to retire – and did.)

Despite opening up real negotiations on the reserve system, the league was not going to give much, hoping to wait the players out and keep the pressure of the lockout on. Their proposals were meant to fail, such as keeping players in reserve for 10 years, then allowing them to receive offers from only eight teams. It also proposed compensation to teams who lose players to free agency. The union offered free agency after six years, with some modest compensation to teams for player loss and a larger cap on number of team offers.

The league’s stand on keeping the players locked out until they got their way failed after 17 days. Commissioner Kuhn, under pressure from television networks and large market owners like Yankees owner George Steinbrenner, ordered the end of the lockout and spring training camps opened on March 18 under his “best interest of baseball” powers.

Bowie Kuhn

Small market owners such as Ed Fitzgerald, owner of the Brewers, were furious at Kuhn. Miller’s response to the action was to rescind his request that players hold off on signing contracts. Miller also took the opportunity to check in on the Messersmith situation, as there was some indication that the owners had been colluding to keep any offers being made to the former Dodgers hurler. False rumors had been started about the health of Messersmith, allegedly at the behest of O’Malley. Miller asked former player Al Campanis, who was the GM of the Dodgers, to quash the rumors. Eventually Messersmith was signed by Braves owner Ted Turner to a three-year deal.

The signing of newly made free agents continued throughout March and April. The large list of unsigned players was reduced to 76 by April 20, but some high profile players such as Tom Seaver and Reggie Jackson remained unsigned. The player loss by some teams was high with the Oakland Athletics likely to lose most if not all of their star players. Meanwhile, the negotiations for a new Basic Agreement had stalled over the league’s intransigence over their reserve system demands.

The negotiations picked up again in late May and the sides resumed daily discussion with the principals on both sides pared down to a minimum. The union was represented by only Miller and his chief counsel Dick Moss.

While these talks were ongoing, Charlie Finley, the owner of the Athletics, decided to take matters in his own hands and not wait for a deal. Facing the decimation of his team, and not wanting to lose his players without compensation, Finley started selling his players off. He traded Reggie Jackson to the Orioles. He followed that by selling Joe Rudi and Rollie Fingers for cash to the Red Sox, and Vida Blue to the Yankees. He received a total of $3.5 million for all three players.

Charles O, Finley

Finley’s actions were not received well by some owners. On June 16, Commissioner Kuhn, once again citing his “best interests of baseball” powers, voided the sale of the three players. The action was allegedly at the behest of O’Malley. What Miller feared was that Kuhn’s unilateral action, if upheld by the courts, would give precedence for blocking future free agent signings.

Miller was intent on getting language in any new deal preventing unilateral action by the Commissioner on free agent signings. The talks picked up speed in June and July as the season neared the All-Star break without a deal. The union’s insistence on a 10-year service time was reduced to seven years. The sides also agreed to draft pick compensation for teams losing free agents. The signing team would forfeit a draft pick to the losing team as recompense.

As the All-Star break was upon them, the owners offered a six-year service time requirement for free agency. Kuhn eventually relented and a deal was struck to limit his power to interfere in free agent contracts. On July 12, 1976, a deal was reached. The agreement was for four years and was retroactive to cover the 1976 season and terminate on December 31, 1979.

The principals to the deal were Kuhn, MLB counsel John Gaherin, AL President Lee McPhail, NL President Chub Feeney, and Labor Committee counsel Barry Rona for the owners. The principals for the union were Miller and Moss.

The terms were as follows:

  • Free Agency – Players who played their option year in 1976 become free agents at the conclusion of the 1976 season. Players with unsigned contracts for 1977 season become free agents at the end of the 1977 season. Players with multi year contracts become free agents at the end of the next regular season if they choose not to sign. All players become eligible for free agency after completing six years of service time. A player who enters free agency may negotiate with 12 teams in 1976 and 13 teams in 1977. The teams will be decided based upon a draft conducted in November.
  • Free Agency compensation – A team losing a free agent gets draft pick compensation from the signing team. A signing team that finishes the season in the top 12 relinquishes a first round pick. A signing team in the bottom 12 gives up a second round pick.
  • Right to demand trade – A player with at least five years of service time is permitted to demand a trade from his team. To do so, the player must put the demand in writing within a 15 day period between October 15 or the end of the World Series, whichever is later. The player is allowed veto a trade with six teams. If no trade is arranged by March 15, the player becomes a free agent.
  • Salary arbitration – The provision remains in effect from the prior CBA. If a player is eligible for free agency, his salary dispute can be submitted to arbitration on consent by both player and team.
  • Minimum salary – Minimum salary raised to $19,000 for 1976 and 1977. Minimum salary for 1978 and 1979 increases to $21,000.
  • Pension – Owner contribution increased to $8.3 million.
  • Ban on collusion – Both the union and the league are banned from interfering in the free agent marketplace.

The agreement was ratified by the union on August 2, 1976. The agreement was set to expire on December 31, 1979.

Marvin Miller

As the decade of the seventies entered its final stages, the MLBPA had much to celebrate. The union had just signed off on what was considered a historic victory for players. The path to free agency took almost a century, a century filled with a multitude of hits and misses on the labor side. At the end of this road the players were looking forward to the future, a future that they hoped would be prosperous for not only them but the game of baseball.

For the owners, however, the future was filled with frustration, anger, and for many a thirst for retribution for what they saw as interference in their businesses. For these owners, the fight was not over. The next decade would prove a challenge for everyone.

To be continued…

Prior articles in this series

History of Labor Struggles in Major League Baseball: The Early Years

History of Labor Struggles in MLB: The Rise of the AL and Road to Antitrust Exemption

History of Labor Struggles in MLB: The Supreme Court and Baseball’s Antitrust Exemption

History of Labor Struggles in MLB: Post World War II

History of Labor Struggles in MLB: The MLBPA and Marvin Miller

History of Labor Struggles in MLB: The First Collective Bargaining Agreement

History of Labor Struggles in MLB: The Fight for Free Agency

History of Labor Struggles in MLB: The End of the Reserve System

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