The Reserve Clause

Abstract

This chapter examines the history of the reserve clause, a standard term in player contracts in Major League Baseball that effectively bound a player to his team for his entire career, and how it led to the sport's near-complete exemption from antitrust law. It first traces the origins and the early use of the reserve clause, along with the many court decisions between 1890 and 1914 involving the clause. The labor practices that formed the core of baseball's monopoly date to 1879, when the owners of the National League teams first agreed on what would come to be called the reserve clause. The chapter asks why no antitrust investigations were undertaken in Congress and no antitrust suits were filed before the 1910s, and why the players did not press antitrust claims against baseball. It also considers the Supreme Court's 1922 ruling stating that the Sherman Antitrust Act of 1890 did not apply to professional baseball.