## Facts

- Major League Baseball clubs and the Major League Baseball Players Association (MLBPA) were parties to a collective bargaining agreement (the Basic Agreement) with a final-and-binding grievance arbitration process.
- The dispute concerned the Uniform Player’s Contract reserve/renewal provision (paragraph 10(a)), which allowed a club to renew a player’s contract by written notice for a one-year period.
- The MLBPA filed a grievance on behalf of pitchers Andy Messersmith and Dave McNally after each played a season under a club-exercised renewal without signing a new contract.
- The clubs contended the reserve system permitted unilateral renewal year after year, effectively maintaining exclusive rights to a player’s services indefinitely.
- The MLBPA contended the contract permitted only a single one-year renewal; after that renewal year ended, absent a new contract, the player was free to negotiate with any club.
- A parallel federal action by a club sought declaratory and injunctive relief concerning the arbitration process and the dispute’s arbitrability; the court addressed the scope of the arbitration clause and enforceability of the award under federal labor law.

## Issues

1. Whether the Uniform Player’s Contract reserve/renewal clause authorizes repeated unilateral renewals in perpetuity or only a single one-year renewal.
2. Whether the Basic Agreement’s grievance and arbitration clause covers disputes over the meaning and effect of the reserve/renewal provision and the players’ post-renewal status.
3. Whether established industry practice and historical expectations can expand the written reserve/renewal language beyond its terms.

## Decision

- The arbitration panel determined that the reserve/renewal option could be exercised only once for a single additional year.
- After completion of that renewal year, if no new contract is executed, the player is no longer subject to the club’s unilateral reserve rights and may negotiate with other clubs as a free agent.
- The panel therefore ruled that Messersmith and McNally became free agents after the conclusion of their renewal-season play.
- In related litigation, a federal district court held that the reserve-clause grievance fell within the Basic Agreement’s arbitration clause and that the parties were required to comply with the arbitration procedures and resulting award.

## Legal Principles

- Contract language granting a club a right to renew “for the period of one year” establishes a single, finite renewal right unless the agreement clearly provides otherwise.
- Custom and historical practice cannot supply perpetual renewal terms that are not stated in the written Uniform Player’s Contract as incorporated into the collectively bargained framework.
- Under federal labor policy and § 301 of the Labor-Management Relations Act, courts generally enforce agreed arbitration mechanisms and refrain from revisiting the merits where the dispute is within the arbitration clause’s scope.
- Disputes over interpretation or application of a collectively bargained agreement and incorporated standard player contract terms are presumptively arbitrable when the parties adopt broad grievance language and final-and-binding arbitration.

## Conclusion

The arbitration award construed MLB’s reserve/renewal clause as granting only a single one-year renewal, after which a player without a new contract is free to sign with any club; related federal litigation confirmed the dispute was arbitrable and that the award was enforceable under federal labor law.


Nat’l & Am. League Pro. Baseball Clubs v. Major League Baseball Players Ass’n, 66 Lab. Arb. Rep. (BNA) 101 (1976)