Reserve clause

The reserve clause, in North American professional sports, was part of a player contract which stated that the rights to players were retained by the team upon the contract's expiration. Players under these contracts were not free to enter into another contract with another team. Once signed to a contract, players could, at the team's discretion, be reassigned, traded, sold, or released.

The only negotiating leverage of most players was to hold out at contract time and to refuse to play unless their conditions were met. Players were bound to negotiate a new contract to play another year for the same team or to ask to be released or traded. They had no freedom to change teams unless they were given an unconditional release. In the days of the reserve clause, that was the only way a player could be a free agent.

Once common in sports, the clause was abolished in baseball in 1975. The reserve clause system has, for the most part, been replaced by free agency.