FREE AGENCY
A legal status that allows a professional athlete to
negotiate an employment contract with the team
of his or her choosing instead of being confined to
one team. Athletes may become free agents after
they have served a specific amount of time under
contract with a team.
Free agency allows athletes who are at the
peak of their careers to shop themselves out to
teams that are willing to pay top dollar and offer
the most comprehensive benefits and perks. In
1975, professional BASEBALL was the first major
sport to adopt a formal free agency policy; foot-
ball, basketball, and hockey followed. Before free
agency existed, sports franchises generally held
complete control over individual players. Their
contracts contained reserve clauses, which
specifically bound them to one team. Players
who grew unhappy with their team had little
leverage; sometimes they might be released from
a contract, but their only real hope was that they
might be traded to another team.
Star athletes can benefit significantly from
free agency.When their contract is up, they may
get lucrative offers from rival teams (often mul-
tiyear contracts worth millions of dollars). For
athletes who are less successful, free agency
means that if their contract is not renewed, they
may be unable to find a spot on another team.
Still, the free agent system has helped athletes
across the board because it forced teams to raise
salaries for all players, not just free agents.
From a team’s point of view, free agency can
be problematic because it makes it easier to lose
star players; those same players also can demand
higher salaries. Teams bid for free agents, who
usually sign with the highest bidder. In
“restricted” free agency, a player is allowed to
become a free agent subject to certain require-
ments. For example, a team might retain the
right of first refusal, meaning that it can retain
the player if it chooses to match a rival team’s
offer. Free agents can be restricted on the basis of
years served, or age. In professional hockey, for
example, a player may become a free agent after
completing four seasons, but they hold
restricted status if they are under 31 years of age.
In recent years, the term free agent has been
used to describe individuals who work for them-
selves in a variety of situations— independent
contractors, home office workers, and temporary
employees, for example. Even in-house employ-
ees whose skills are so specialized that they are
especially attractive to other companies have
been called free agents. Strictly speaking, these
people are not true free agents. Independent con-
tractors, like free agents, are allowed to sign on
with any client or customer of their choosing.
Usually, however, they are not contractually
bound to any one client the way professional ath-
letes are. A freelance writer, for example, may
contract with several clients at the same time.
While some clients might ask the writer to sign a
promise not to divulge proprietary information,
in most cases the writer is not actually prohibited
from working with specific companies. Tempo-
rary workers have slightly more in common with
free agents. They contract with an employment
agency, and they are restricted from accepting
job offers from the agency’s client companies.
Usually, however, temporary workers are allowed
