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Posted By: warshawlaw

The reserve clause stated that a player who had not signed a contract could be renewed at the same term for the next year. The teams interpreted this to mean that they could renew the player each year on the same terms, thus effectively binding them to the teams in perpetuity. The original challenge of note that made its way to the Supreme Court was in the case brought by the Federal League that was decided in 1922 with baseball being given a de facto antitrust exemption. With this precedent, the main avenue of attack by players was cut off. Other challenges to the reserve clause were made over the years. Flood's challenge is famous because it was undertaken with the financial backing of the player's union. It lost, but as it went forward the union obtained via collective bargaining the right to arbitration of labor issues. The arbitrator was the one who ruled that the reserve clause established a one-year club option rather than a renewable annual club option. In 1998, Congress passed the Curt Flood Act of 1998, which said challenges to league rules that restrict player movement or compensation would be subject to antitrust laws.