The Abolishment of the Reserve Clause

The option clause - better known as the reserve clause - was a contractual clause in North American professional sport allowing a team to retain the rights to their players once their contracts expired. This basically restricted players from signing with other teams around the league, and players were stuck with the same team throughout their careers unless they were traded or released. This clause gave players very little power to negotiate new contracts and terms with their clubs. 

Curt Flood was a phenomenal baseball player, but he is perhaps most remembered for challenging the reserve clause in court. He had been traded from the St. Louis Cardinals to the Philadelphia Phillies back in 1969. Flood refused to play for the Phillies not just because they were a poor performing team at the time, but also because their fan base was known for being racist (Flood was African American). Once Marvin Miller - the head of the MLBPA at the time - agreed to fund any legal action Flood wanted to take against the league, he decided to sue the MLB. He demanded to be made a free agent and argued Major League Baseball went against federal antitrust laws by restricting players from negotiating salaries and limiting them to one team throughout their careers. The Commissioner and the League responded saying the reserve clause was for the good of the game. The court ruled against Flood saying although he has the right to be a free agent, it is only something which could be achieved through collective bargaining between the Union and the League. Although he lost, his case paved the way for what would become known as free agency. 

A few years after Flood’s case, baseball pitchers Andy Messersmith and Dave McNally challenged the reserve clause in court and won. Both players held out from playing during their option clause year after their contracts expired, and thought this could allow them to sign with any team they choose. The owners disagreed with them saying their contracts were automatically renewed with the reserve clause. Both players decided to have their case viewed by an arbitrator, and the arbitrator - known as Peter Seitz - ruled in their favour. This ruling ended the reserve clause in professional baseball, and free agency was born. Messersmith and McNally were free to sign with whichever club they pleased the following season. 

The other professional sport leagues soon followed the free agency trend. Free agency allowed players to negotiate their salaries, and brought exponential growth to player salaries over the past few decades. These two case scenarios, along with the assistance of Marvin Miller, are major contributors to the abolishment of the option clause.  

Sources

http://www.theatlantic.com/entertainment/archive/2011/07/how-curt-flood-changed-baseball-and-killed-his-career-in-the-process/241783/

http://seamheads.com/2008/12/23/today-in-baseball-history-andy-messersmith-and-dave-mcnally/