Reserve clause instituted the reserve system in the
National League in 1879.
William Hulbert, then the president of the
National League (NL), instituted the first
reserve clause in
professional baseball in 1879. Under Hulbert's system, each NL team could "reserve" five players for its roster, and owners from opposing clubs could not offer contracts to reserved players. This provision extended to 11 players per team in 1883, 12 per team in 1885, 14 per team in 1887, and by 1890, all players under active contract with an NL team were subject to the reserve clause. Any player who signed with an NL team was placed under that team's control until they retired, were traded to another club, or were released outright. This latter qualification also made it easier for teams to discipline players by voiding their contracts, and it was sometimes referred to as the "reserve
and release" clause. In 1883, the
American Association entered into the first national agreement with the NL, extending the reserve system to the Association as well. In 1903, the
American League (AL) signed its own national agreement, forming the two-league system known as
Major League Baseball (MLB). The reserve clause extended cross-league, with reserved NL players prevented from joining AL teams and vice versa. The primary rationale for instituting the reserve clause was to limit player salaries for the struggling NL by keeping players under team control. Many of the players that the owners reserved for the 1880 season had been, at the time, the best-paid in the league, such as
Cap Anson,
Paul Hines, and
Tommy Bond, and these players saw their salaries drop once they remained bound to their respective teams. Once the reserve system was extended to all players, those players were categorized into five categories under the Brush Classification System, with each group receiving a salary that ranged between $1,500 and $2,500 annually. While the league owners supported the reserve system as a cost-cutting measure, they also defended its use as a way to ensure a competitive balance in baseball. Without a reserve clause, the wealthiest teams could stockpile star players simply by outbidding smaller teams. This sentiment was echoed by federal district court judge William P. Wallace in 1890, who quoted
Albert Spalding in arguing that the rule "takes a manager by the throat and compels him to keep his hands off his neighbor's enterprise". The owners also argued that the reserve clause justified a team's investment in its players, who were drafted with little experience and required years of development to reach the major leagues. One of the first players to challenge the reserve clause was
Sam Wise, who in 1882 left the
Cincinnati Red Stockings of the American Association for the NL's
Boston Red Caps. The
Massachusetts General Court denied Cincinnati's request for an
injunction, and Wise spent the remainder of the season with Boston. The reserve clause's most vocal opponent, however, was
John Montgomery Ward, known as Monte Ward, who compared the system to slavery in 1885. In 1890, he helped to found the
Players' League (PL), which promised a three-year contract to all players and no pay cuts after the first year. Players' salaries were the same as what the NL had paid them in either 1888 or 1889, whichever was higher. Players who had joined the PL, like
Jim O'Rourke, were able to convince their colleagues that the reserve clause only prevented players from joining teams in those leagues that had it, and that they were legally free to join teams in new leagues. When Ward left the
New York Giants to join the PL, the team took him to
New York Supreme Court to prevent him from playing with his new club. While Justice
Morgan J. O'Brien disagreed with Ward and O'Rourke's assessment that the reserve clause did not apply to the Players' League, the court was most concerned about the vague phrasing of the clause: Ward was technically under contract with the Giants for the 1890 season, but the perpetual reserve clause meant that major aspects of his contract, including his salary, were not addressed, and the court decided that the reserve clause was "too indefinite" to be properly enforced. The decision in
Metropolitan Exhibition Co. v. Ward also criticized the uneven system by which a team could hold a player theoretically indefinitely but terminate them with only 10 days' notice. This legal victory was not enough to sustain the Players' League, as many of its financial backers pulled out after suffering considerable losses during that premiere season.
Hall of Famer Nap Lajoie was taken to court in 1901 by the
Philadelphia Phillies, an NL team, after he joined their crosstown AL rival, the
Philadelphia Athletics, who were not yet bound by the reserve clause. The
Supreme Court of Pennsylvania ruled the next year in
Philadelphia Ball Club, Ltd. v. Lajoie that he possessed a unique skill set, much like
Johanna Wagner, the defendant in the seminal 1852
English contract law decision
Lumley v Wagner. This skill set meant that, while the Phillies could not require Lajoie to play for them, they
could prevent him from playing for other teams.
Baseball's antitrust exemption ''. The
United States Congress had enacted the
Sherman Antitrust Act which prohibited the type of anticompetitive collusion under which the reserve clause has been argued to fall, in 1890. This policy was extended even further by the
Clayton Antitrust Act of 1914, which allowed private parties to sue for damages caused by anticompetitive conduct. The same year that the Clayton Act became law, the
Federal League (FL) was created as a challenger to MLB. Despite the new league prohibiting players from signing if they were under contract with a major league team and MLB threatening to blacklist players who defected, players such as
Joe Tinker nonetheless left MLB to join the FL, and many of these defections led to litigation. While the lower courts typically ruled in favor of players who joined the Federal League during the offseason, when they were under reserve but not an active contract, the owners did win some cases where players had abandoned their MLB team midseason.
Dave Fultz, the president of the FL, was primarily focused on improving the working conditions of minor league players and improving player safety. He was not radically against the reserve system, and he feared that eliminating it from his league would incur retribution from MLB. Instead, he proposed that FL players remained under reserve for five years, after which owners and players could mutually agree to extend the reserve option.
Federal Baseball Club of Baltimore v. National League In January 1915, the Federal League owners sued the major leagues and three members of the National Commission for antitrust violations, hoping that noted trustbuster
Kenesaw Mountain Landis would rule in their favor. Landis, however, announced that "any blows at the thing called baseball would be regarded by this court as a blow to a national institution", and he took the case under advisement for a year to stall any action. Meanwhile, the FL incurred great financial losses that season, and came to a settlement with MLB at the end of the year. Most FL owners were bought out by MLB teams or allowed to buy interests in existing major league clubs. The one exception was
Ned Hanlon of the
Baltimore Terrapins. Hanlon and his partners brought an antitrust lawsuit in
D.C. District Court, alleging that MLB had colluded to "wreck and destroy" the FL by purchasing and dissolving its teams. Judge
Wendell Phillips Stafford ruled in Hanlon's favor, agreeing that baseball games constituted interstate trade and commerce under the Sherman Act and that MLB had engaged in impermissibly monopolistic behavior. Hanlon was awarded $80,000 in damages, which was increased to $240,000 ($ in modern dollars) under the treble-damages provision of the Clayton Act. On appeal, Judge
George W. Pepper of the
D.C. Circuit held that sports like baseball, "a spontaneous product of human activity", were "not in [their] nature commerce", and thus not subject to antitrust legislation. The circuit's chief judge,
Constantine Joseph Smyth, wrote in his opinion that "sport" such as professional baseball fell outside the realm of business and thus monopoly. Hanlon then brought his claim to the
Supreme Court, where former
US president and baseball fan
William Howard Taft was
Chief Justice. In May 1922, the Court unanimously affirmed the appellate decision in
Federal Baseball Club v. National League. The Sherman Act required that businesses be engaged in interstate commerce to incur government intervention, and Justice
Oliver Wendell Holmes Jr. interpreted commerce to include only physical goods. Because baseball exhibitions did not fall under this definition, the sport consisted of "purely state affairs". The next term the Court considered
Hart v. B.F. Keith Vaudeville Exchange, a Clayton Act suit brought by a talent agent alleging the defendants had conspired to exclude the plaintiffs' clients from the many theaters they controlled in order to extract large payments to them, arguing that since their productions depended on the interstate transport of sets and costumes, the
vaudeville circuit was interestate commerce. It had been filed before
Federal Baseball; afterwards, the defendants had argued that their industry, too, was similarly not interstate commerce since its main business activity was selling admission to performances it had arranged rather than transport of goods for sale, with the shipments of materials required for those productions merely an incident to their business, just as with baseball teams' travel. The
Southern District of New York agreed and dismissed the case. Justice Holmes wrote for a unanimous Court that reversed the trial court on jurisdictional grounds, holding that a
federal question existed over whether the vaudeville circuit was interstate commerce, and that until that question was resolved the case was not to be disposed even if the arguments for federal jurisdiction themselves seemed weak. "[I]t may be that what in general is incidental, in some instances may rise to a magnitude that requires it to be considered independently", Holmes wrote.
Gardella v. Chandler was the
Commissioner of Baseball when
Danny Gardella almost overturned baseball's antitrust exemption. The case that came closest to overturning the reserve system and antitrust exemption was brought by
Danny Gardella, who left the
New York Giants in 1946 to play for the
Azules de Veracruz of the
Mexican League. He returned to New York in 1947 to play in MLB again but found himself blacklisted. Gardella's attorney Frederic Johnson tried to distinguish his client from
Nap Lajoie by arguing his client was not an exceptional player or "unique performer", but a standard-quality professional athlete being denied an opportunity to make a living. Judge
Henry W. Goddard of the
Southern District of New York ruled in favor of the owners, dismissing Gardella's lawsuit under the precedent set by
Federal Baseball, The
United States Court of Appeals for the Second Circuit overturned this decision, however, with
Jerome Frank ruling that baseball's television and radio presence made it a matter of interstate commerce that thus fell under the Sherman Act. The case never reached the Supreme Court, as
Happy Chandler, then the
Commissioner of Baseball, soon reinstated the blacklisted Mexican League players. Gardella settled out of court for $60,000 in damages and a trade to the
St. Louis Cardinals. With Gardella's case settled, there was little pressure on the league to alter the reserve system or any other anticompetitive measures. Some members of Congress, however, were worried about the potential challenge to baseball's antitrust exemption, as well as the instability to the sport caused when Chandler was replaced by
Ford Frick. In 1951, four bills were introduced to Congress that would have further codified the antitrust laws concerning baseball.
Toolson v. New York Yankees, Inc. Congress ultimately took no action on the antitrust exemption, as the House Subcommittee on the Study of Monopoly Power decided that enacting official legislation would affect the Supreme Court's decision on another case that had come its way,
Toolson v. New York Yankees, Inc. George Toolson, a minor league player in the Yankees'
farm system, had been reassigned from the
Newark Bears, their
Triple-A affiliate, to the
Low-A Binghamton Triplets in 1949. He refused to report to the new club and brought the reserve clause to court as an antitrust violation. In a 7–2 ruling, the Court upheld the
Federal Baseball precedent that the "business of giving exhibitions" was "purely state affairs" and thus exempt from the antitrust protections built into the Sherman Act. The one-paragraph
per curiam majority opinion in
Toolson held that any changes to the
Federal Baseball precedent would have to go through Congress and not the courts. Justice
Harold Hitz Burton dissented, arguing that organized baseball was obviously engaged in interstate trade and commerce and thus should be subject to federal antitrust enforcement.
Shuster and International Boxing The Court did not revisit baseball's antitrust exemption, although other lower courts would. In the years after
Toolson, three other antitrust cases involving other industries, including other professional sports, made baseball's exemption problematic when the Court declined to extend the logic of
Federal Baseball to them. Early in 1955, two cases decided the same day involved federal Sherman Act cases against companies alleged to have nearly monopolized theatrical performances and
professional boxing. Both defendants had argued that the
Federal Baseball precedent applied to them as well since the interstate travel required to stage performances and fights was equally incidental to those events, and judges in the Southern District of New York hearing the cases granted defense motions to dismiss. The government appealed directly to the Supreme Court under the
Expediting Act. In both cases, the Court allowed the cases to proceed. The theater case,
United States v. Shuster, was decided unanimously. After citing many precedents which had held industries which did not ship goods for sale across state lines to be interstate commerce,
Chief Justice Earl Warren wrote that
Federal Baseball and
Toolson applied only to baseball and thus
Hart controlled in the instant case: "[It] established, contrary to the defendants' argument here, that
Federal Baseball did not automatically immunize the theatrical business from the antitrust laws." Any holding that it did required a trial on that question. Justices Burton and Reed referred to their
Toolson dissents in statements indicating their concurrence with Warren's opinion. The two would also join Warren's majority opinion in
United States v. International Boxing Club of New York, Inc., where he conceded that "if it were not for
Federal Baseball and
Toolson, we think that it would be too clear for dispute that the Government's allegations bring the defendants within the scope of the Act." Again he deferred to Congress to resolve the issue if it desired. Justices
Felix Frankfurter and
Sherman Minton dissented this time, with Minton also joining Frankfurter's dissent. "It would baffle the subtlest ingenuity to find a single differentiating factor between other sporting exhibitions, whether boxing or football or tennis, and baseball insofar as the conduct of the sport is relevant to the criteria or considerations by which the Sherman Law becomes applicable to a 'trade or commerce'", Frankfurter wrote. "It can hardly be that this Court gave a preferred position to baseball because it is the great American sport. I do not suppose that the Court would treat the national anthem differently from other songs if the nature of a song became relevant to adjudication." The Court reversed. After reiterating
Shusters holding that
Toolson was limited to baseball and did not automatically extend to any other business despite any apparent similarities, Justice
Tom C. Clark wrote for a majority of six that "the volume of interstate business involved in organized professional football places it within the provisions of the Act". He admitted that "were we considering the question of baseball for the first time upon a clean slate, we would have no doubts." Frankfurter again dissented. "[T]he most conscientious probing of the text and the interstices of the Sherman Law fails to disclose that Congress, whose will we are enforcing, excluded baseball—the conditions under which that sport is carried on—from the scope of the Sherman Law, but included football", he wrote. Newer justices
John Marshall Harlan II and
William J. Brennan Jr., who had replaced Minton, also dissented. "What was foreshadowed by
International Boxing has now come to pass", Harlan lamented. "The Court, in holding that professional football is subject to the antitrust laws, now says in effect that professional baseball is
sui generis so far as those laws are concerned."
State v. Milwaukee Braves Within a decade, a case would be brought alleging MLB came under
state antitrust laws when
Wisconsin sought to block the
Braves' move from Milwaukee to Atlanta. The state alleged that baseball had exercised its monopoly power in an unreasonable way that had a substantially negative effect on business within the state, and sought to either have the move prevented or an expansion team be located in Milwaukee. A lower court agreed, and granted an injunction that delayed the Braves' move until their appeal, arguing that
federal preemption and the
Dormant Commerce Clause put baseball out of reach of Wisconsin's antitrust laws, could be heard by the
state's Supreme Court. A narrowly divided court lifted the injunction. After reviewing the Supreme Court's precedents at length, Justice
Thomas E. Fairchild wrote for the four-justice majority that while baseball's antitrust exemption might not cover all the businesses a baseball team could and did engage in, "it does seem clear that the exemption at least covers the agreements and rules which provide for the structure of the organization and the decisions which are necessary steps in maintaining it." Since Congress had not explicitly barred the states from regulating baseball, "the ultimate question is whether the state action conflicts with national policy", Fairchild concluded, noting that either preventing the Braves' move or requiring MLB to locate an expansion team in Wisconsin would have nationwide implications, particularly if other states similarly brought their laws to bear. The majority, Fairchild said, either found it "unrealistic to interpret these decisions of the supreme court of the United States plus the silence of Congress as creating a mere vacuum in national policy, leaving the states free to regulate the membership of the baseball leagues" or followed
Toolson in deferring to the reliance interests the federal antitrust exemption had established and Congress's sole power to change that. It did, however, note in its conclusion that "[t]he record strongly suggests that the defendants gave little heed to the interests of the Milwaukee community, and to the injury which the move would cause", expressing a wish for Congress to deal with the issue. To the dissenters, the other majority theory, that the reliance interests nationally precluded any exercise of state authority, was at odds with another Supreme Court precedent,
California v. Thompson. Recalling "the cavalier disregard of either law or reasonableness in the exercise of the baseball monopoly" that the majority had itself taken note of, "[w]e cannot conclude that the state is less able to resist this treatment of its legitimate interests by organized baseball than it is to prevent the entrance into its boundaries of contagious disease, although such disease is carried in interstate commerce", Heffernan wrote. "It is difficult to see what national interest is preserved by immunizing this organization from the consequences of its violation of state law."
Spencer Haywood cases After
leading the U.S. team to a gold medal at the 1968 Olympics, 19-year-old
Spencer Haywood sought to play professionally but was stymied by a
National Basketball Association (NBA) rule that players were not eligible to be
drafted until four years after their high school class had graduated. He chose to instead play for the rival
American Basketball Association's (ABA)
Denver Rockets for two seasons, then attempted to switch to the NBA with the
Seattle SuperSonics for the
1970–71 season when he was dissatisfied with the Rockets' latest salary offer. The league fined Sonics owner
Sam Schulman; individual teams formally protested the result of every game Haywood played in regardless of the outcome. Haywood filed suit, seeking an injunction against the NBA on the grounds that its actions were a
group boycott illegal under antitrust law. The case came before Justice Douglas for an expedited appeal after the Ninth Circuit
stayed the injunction
pendente lite Haywood had won in the
Central District of California, in order to allow him to take the floor for the Sonics in the impending playoffs. "The college player draft binds the player to the team selected", Douglas conceded. "Basketball, however, does not enjoy exemption from the antitrust laws. Thus, the decision in this suit would be similar to the one on baseball's reserve clause which our decisions exempting baseball from the antitrust laws have foreclosed." He said the group boycott issue was "significant" in professional sports. The full Court,
en banc, declined to reverse Douglas. On
remand, District Judge
Warren J. Ferguson took note and held the NBA subject to the Sherman Act. "[B]y pooling their economic power, the individual members of the NBA have, in effect, established their own private government", he wrote, permanently enjoining the league from enforcing the four-year rule and sanctions against Haywood, Schulman and the Sonics.
Curt Flood Charles Curtis Flood was born on January 18, 1938, in
Houston, Texas, the youngest of Laura and Herman Flood's six children. The family moved to
Oakland, California, two years later in search of the naval jobs that had been created by the United States's pending entry into
World War II. Flood began playing baseball around the age of seven or eight, and he joined his first organized team in 1947,
catching for Junior's Sweet Shop. In addition to playing
American Legion Baseball, Flood attended
McClymonds High School with future MLB player
Frank Robinson, who was two years his senior. Throughout his adolescence, Flood transitioned from catcher to
shortstop and finally
center fielder. Outside of baseball, his primary passion was in the visual arts, inspired by his high school art teacher Jim Chambers. Flood knew that he wanted a career in either art or baseball, but he had been warned by coach George Powles that his diminutive size and his race would impede his progression in professional baseball. On January 30, 1956, three days after graduating from high school,
Bobby Mattick, a
scout for the Cincinnati Reds, offered Flood a $4,000 contract to join the team. Flood was assigned to the minor league
High Point-Thomasville Hi-Toms, where he encountered
segregation and racist chants from the fans. He was successful on the field, however,
batting .340 with 29
home runs and 128
runs scored, and he was promoted to the Reds as a
September call-up. Flood made his major league debut on September 9,
pinch running for
Smoky Burgess in a 6–5 loss to the St. Louis Cardinals. Once the season ended, Flood met with Reds
general manager Gabe Paul, who explained that while the team had been impressed by Flood's performance, they were not in a financial position to increase his salary, which would stay at $4,000 ($ in modern dollars) again for the 1957 season. Flood realized after this meeting the gravity of the reserve system, later saying, "I could only play where they elected to send me. This was baseball law. It was beyond question or dispute. It was taken entirely for granted." The Reds assigned Flood to the
Dominican Winter League to teach him
third base, which they hoped he would play in the future. When he returned, he was assigned to the
Savannah Reds of the
South Atlantic League. Flood's batting average fell significantly in Savannah, which Paul used as a reason not to raise his salary for the 1958 season. Paul also informed Flood that he would have to report to the
Venezuelan Winter League and learn how to play
second base. On December 5, 1957, the Reds traded Flood and
Joe Taylor to the St. Louis Cardinals in exchange for
Marty Kutyna,
Ted Wieand, and
Willard Schmidt, a trade which came with a 25 percent raise. The Cardinals' owner,
Gussie Busch, was motivated to acquire more black baseball players to increase the team's local popularity, and he had failed to acquire
Willie Mays and
Ernie Banks. Flood spent three weeks in the Cardinals' farm system before debuting with his new team on May 2, 1958, where he faced the team that traded him. He did not become an everyday player in St. Louis until midway through the 1961 season, when manager
Solly Hemus was fired and replaced by
Johnny Keane. From 1965 to 1967, Flood had a reputation as an all-star defensive center fielder, setting an MLB record for playing 226 consecutive games without making an
error in 555 chances. Flood's salary increased throughout this period as well: he made $45,000 in 1966, significantly more than the average MLB player's $13,000 salary. After making $50,000 in 1967, Flood came to offseason negotiations demanding that his salary be doubled for 1968. When general manager
Bing Devine refused, Flood threatened to retire from baseball entirely, and the two parties settled on a $72,000 salary. That season, Flood appeared on the cover of
Sports Illustrated, where he was deemed the best center fielder in baseball. The Cardinals faced the
Detroit Tigers in the
1968 World Series. The matchup was fairly even, and both teams remained scoreless through the first six innings of Game 7. Both
Norm Cash and
Willie Horton singled for the Tigers in the seventh inning, leaving Cash in
scoring position. Next up to bat,
Jim Northrup hit a long
fly ball to center field. Flood slipped on the wet outfield turf, his stumble causing the ball to miss his glove and roll towards the outfield wall. That error allowed both Cash and Horton to score, putting the Tigers up 2–0. Flood apologized to pitcher
Bob Gibson after the inning, but Gibson insisted, "It was nobody's fault." The Tigers won the game 4–1, defeating the Cardinals and becoming World Series champions. informing Flood he was traded to the Phillies During offseason contract negotiations, Flood rejected the Cardinals' proposed salary of $77,500 ($ in modern dollars) for the 1969 season. He insisted on $90,000, telling Busch that number "is not $77,500 and is not $89,999". Although he acquiesced, Busch was upset that the negotiations had turned sour at all, as he believed he had a good relationship with Flood. Busch was the first to ask Keane to give Flood a regular playing opportunity in the outfield, he had provided Flood's family with financial assistance, and Flood had once painted Busch's portrait. Overall, the team's relationships with each other and with management suffered in 1969. The on-field camaraderie that Flood had previously praised seemed to have diminished, while the players were unhappy with Busch after he accused them of being greedy for boycotting
spring training in the name of higher wages. Also during spring training, Flood had suffered an injury during an
exhibition game against the
New York Mets, and the sedatives he was provided by a team doctor caused him to sleep through the Cardinals' annual season ticketholder banquet. Flood was fined $250 for missing the banquet, at which point he began to publicly criticize the Cardinals' front office to local news media. On the field, MLB had made several changes that were meant to increase hitting, including lowering the
pitcher's mound and expanding the
strike zone. While Flood batted .285 for the year, he was no longer one of the top 50 hitters in the league. Early one morning in October 1969, a sportswriter notified Flood that he,
Tim McCarver,
Joe Hoerner, and
Byron Browne had been traded to the Philadelphia Phillies in exchange for
Dick Allen,
Cookie Rojas, and
Jerry Johnson. Shortly afterwards, he received the official phone call from Jim Toomey, an executive for the Cardinals that he later referred to as "a middle-echelon coffee drinker in the front office". After hanging up the phone, Flood began to cry, and he spent the remainder of the day waiting for another call with more information. The next day, Flood, who had been preparing for a vacation in
Copenhagen, received a one-sentence letter from Devine saying that he had been traded outright to the Phillies. Flood responded by announcing his retirement from baseball and embarking on his previously scheduled vacation. Devine did not immediately believe Flood, who had previously threatened to retire in order to improve his own salary. After returning from Copenhagen, Flood scheduled a meeting with Phillies general manager
John Quinn, who attempted to convince him that the team was better than its reputation. At the time, the Phillies were known for their lackluster treatment of their players, sending them on
red-eye commercial propeller flights where other teams would charter private jets for away games. Flood was particularly concerned about Philadelphia's reputation for mistreating its black players, as Allen had been vocal about the racism he experienced from management, fans, and the press during his time with the Phillies. Flood was not active in the
Black Power movement, but he was sympathetic to the cause, and he remained sensitive to the racism and segregation that he had experienced earlier in his baseball career. == Path to the Supreme Court ==