Did the Federal League Have a Reserve Clause?

Its defiance of the reserve clause for two brief but eventful years in the second decade of the twentieth century has secured for the Federal League a lasting place in the history of sports law. Outbidding owners of the National and the American League for some of the best baseball talent of the era, Federal League teams boasted rosters that included such stars as Mordecai Brown, Joe Tinker, Edd Roush, and Eddie Plank, who jumped from the two established major leagues.

Officials of the Federal League resolved to defend any player of theirs whose former team, in the National or American League, might sue him for violating the reserve clause. At a meeting of the new “outlaw” league in Indianapolis in December 1913, J. Edward Krause, a league director, asserted that “the reserve clause in the contracts of ball players is invalid” and added that his colleagues were confident they would prevail in court if the issue was litigated.1

Two days later, Robert Hedges, owner of the St. Louis Browns, said he had a copy of a Federal League contract that included both a ten-day release clause and a reserve clause. Edward Steininger, co-owner of the Federal League franchise in St. Louis, granted the part about the ten-day clause—the team could release a player on ten days’ notice—but not the reserve clause, which he and the rest of the league publicly and pointedly opposed.2 Edward E. Gates, counsel for the Federal League, maintained that “the reserve clause is illegal and not binding upon players, lacks mutuality, and is against public policy.”3

Bolstering the credibility of the Federal League in this matter was the publicity surrounding Jake Daubert, first baseman for Brooklyn. Denying rumors that the Federals would sign him for $30,000, a fabulous sum at the time, league president James A. Gilmore seized the opportunity to clarify the league’s stand on the reserve clause. “I will not permit any club in the Federal League to sign Jack Daubert,” he said.

He is under contract with a Major League club and the Federal League will not take any signed players. We recognize the validity of the Major League contract but not the reserve clause. If Daubert was held under reserve only it would be different. But he is signed and no Federal League club would be allowed to use him.4

On January 5, 1915, after their first full season, the Federal League filed suit in U.S. District Court in Illinois, contending that Organized Baseball violated the Sherman Antitrust Act of 1890—that the National Agreement was illegal, that the two leagues were a monopoly, and, moreover, that they had conspired to put the Federal League out of business.

The case was assigned to Kenesaw Mountain Landis, who in his ten years as a federal judge had presided over several important cases, including the Standard Oil antitrust case. George W. Miller, an attorney representing Organized Baseball, said he had an affidavit from umpire Steve Cusack attesting that Federal League contracts bound players to their teams for ten years. “They could not possibly operate successfully without the ten-day release notice in their contracts,” he wrote, “or without the reserve rule and the baseball men of experience in their ranks know that just as well as we do.”5

Judge Landis declined to hand down a quick decision. Contract disputes continued, and the suit was eventually settled out of court after the 1915 season.

For future historians, a judicial decision might have brought to light the existence, or nonexistence, of a reserve clause in the Federal League. It was a subject on which spokesmen for the Federals and spokesmen for Organized Baseball plainly contradicted each other. One of the two sides was issuing false statements, and from contemporary newspaper accounts alone it is impossible to know which side that was.

According to historians Harold Seymour and later David Pietrusza, the answer to the question posed by the title of this article is, in a word, yes. As they describe it, the reserve clause written into the Federal League contract did, however, contain two provisions that distinguished it from its counterpart in Organized Baseball. First, if a club exercised its option on a player, that player got a raise of at least 5 percent. Second, after ten years, a player would be released from his contract with the club if he so requested—in effect, he could become a free agent.6

Neither Seymour nor Pietrusza cited any sources, but their account turns out to be corroborated by the Federal League contract that the Indianapolis Feds offered to Edd Roush in 1915:

9. It is understood and agreed that after the player has given service in the Federal League for any portion of ten different years, the said player shall be given, if he demands it, his unconditional release:

10. The club owner shall have the exclusive right and option of extending this contract from year to year upon like conditions, except that the compensation to be paid the player shall be five percent each year in excess of the sum named in this contract, provided that written notice of the exercise of such option shall be given to the player on or before September fifteenth. 

The question, then, is not whether the Federal League had a reserve clause but why Federal League officials spoke so forcefully against it in public and even went so far as to bring to court a case that could well have called into question the legality of this practice that they themselves engaged in.

 

Acknowledgments

I would like to thank Susan Dellinger, Edd Roush’s granddaughter, for providing copies of the contract that the Indianapolis Feds offered him in 1915. I would like to thank Ross Davies for leading me to the relevant passage in David Pietrusza’s book Major Leagues.

 

Notes

1. “Will Defend Players,” New York Times, 29 December 1913.
2. “No Reserve in Contracts,” New York Times, 31 December 1913.
3. “Anti-Trust Law in Baseball War,” New York Times, 31 December 1913.
4. New York Times, 10 January 1914.
5. New York Times, 23 January 1915. But that the Federal League had even a ten-day release clause was later contradicted by a newspaper report on the negotiations, in Cincinnati in December 1915, between the Federal League and Major League Baseball. The agreement struck was essentially that the latter would buy out the Federal owners. “The bone of contention at Cincinnati will be the ballplayers with whom the Federal League has iron-bound contracts,” according to the New York Times (15 December 1915). “In these contracts the ten day and reserve clause were eliminated.”
6. Harold Seymour, Baseball: The Golden Age (New York: Oxford University Press, 1971), 201; David Pietrusza, Major Leagues: The Formation, Sometimes Absorption, and Mostly Inevitable Demise of 18 Professional Baseball Organizations, 1871 to Present (Jefferson, C.: McFarland, 2006), 226.