Article XX - B of the Basic Agreement
The below is Article XX-B of the Basic Agreement, which outlines the free agent process.
Article XX – Reserve System
B. Free Agency
Following the completion of the term of his Uniform Player’s Contract, any Player with 6 or more years of Major League service who has not executed a contract for the next succeeding season shall become a free agent, subject to and in accordance with the provisions of this Section B.
The procedure set forth in this paragraph (2) shall apply to Players who become free agents pursuant to paragraph (1) above. Players who otherwise become free agents under this Agreement shall be eligible to negotiate and contract with any Club without any restrictions or qualifications.
(a) A Player eligible to become a free agent under paragraph (1) shall become a free agent as of 9:00 A.M. Eastern Time on the day following the day that the last game of the World Series had started.
(b) During the period beginning at the time when the Player becomes a free agent as defined in subparagraph (a) above and ending at 11:59 P.M. Eastern Time on the fifth day following the day that the last game of the World Series had started (“Quiet Period”), any Club representative and any free agent or his representative may talk with each other and discuss the merits of the free agent contracting, when eligible therefor, with the Club; provided, however, that the Club and the free agent shall not negotiate terms or contract with each other. The following subjects are among those which may properly be discussed between any Club and such Player:
(i) the Player’s interest in playing for the Club, and the Club’s interest in having the Player play for it;
(ii) the Club’s plans about how it intends to utilize the Player’s services (as a starting pitcher or reliever, as a designated hitter or not, platooning, etc.);
(iii) the advantages and disadvantages of playing for the Club including the nature of the organization, the climate of the city, availability of suitable housing, etc.;
(iv) length of contract;
(v) guarantee provisions; and
(vi) no-trade or limited no-trade provisions.
Notwithstanding the foregoing, the free agent and his former Club may engage in negotiations and enter into a contract during the Quiet Period.
(c) Players who become free agents pursuant to this Section B shall, upon the expiration of the Quiet Period, be eligible to negotiate and contract with any Club, subject to the provisions of this Section B.
(3) Rights of Former Club
The following provision shall apply only to each Player who becomes a free agent under this Section B after having been continuously under reserve (without interruption) to the same Club (either at the Major or Minor League level) since Opening Day of the recently completed championship season (“Qualified Free Agent”).
During the Quiet Period, the former Club of a Qualified Free Agent may tender the Qualified Free Agent a one-year Uniform Player’s Contract for the next succeeding season with a guaranteed salary that is equal to the average salary of the 125 highest-paid Players each year (“Qualifying Offer”). The amount of the Qualifying Offer each year shall be determined pursuant to Attachment 45 to this Agreement, and shall be communicated to Clubs and Players by the parties within ten (10) days of the conclusion of the championship season. Clubs shall inform the Labor Relations Department (“LRD”) of the Office of the Commissioner whether they will make a Qualifying Offer to a Qualified Free Agent, and the LRD will inform the Players Association no later than 5 P.M. Eastern Time on the last day of the Quiet Period of each Club’s Qualifying Offers to Qualified Free Agents. If the former Club of a Qualified Free Agent does not tender him a Qualifying Offer, it shall not be entitled to compensation under paragraph (4) of this Section B with respect to that Qualified Free Agent.
A Qualified Free Agent may accept a Qualifying Offer until the seventh day following the conclusion of the Quiet Period (“Acceptance Period”). The Players Association shall provide the LRD with a list of the Qualified Free Agents who have accepted the Qualifying Offer by 5 P.M. Eastern Time of the final day of the Acceptance Period. Any Qualifying Free Agent whose name is not included on the list provided by the Players Association to the LRD will be deemed to have rejected the Qualifying Offer.
If the Player accepts the Qualifying Offer, he shall be a signed player for the next season on a one-year contract with a salary equal to the amount of the Qualifying Offer, and shall be eligible for in-season termination pay as set forth in Article IX, Section C if his Contract is terminated under paragraph 7(b)(2) of the Uniform Player’s Contract from the date of acceptance through the conclusion of the championship season.
(a) A Qualified Free Agent shall be subject to compensation only if: (i) his former Club tenders him a Qualifying Offer pursuant to paragraph (3) of this Section B; (ii) the Player declines the Qualifying Offer or signs a contract with another Major League Club prior to the expiration of the Acceptance Period; and (iii) the Player signs a Major League contract with another Major League Club that is confirmed by the Players Association and the LRD before the next succeeding Major League Rule 4 Draft (“Rule 4 Draft”). A Qualified Free Agent who signs a bona fide Minor League contract shall not be subject to compensation irrespective of whether the Minor League contract is subsequently assigned to the Major League Club provided that the execution of the Minor League contract and the subsequent assignment were not the product of an agreement or understanding designed to circumvent Article XX(B)(3) and (4).
(b) Former Club. The former Club of a Qualified Free Agent subject to compensation shall receive an amateur draft choice (“Special Draft Choice”) in the next Rule 4 Draft. Clubs that have lost Qualified Free Agents subject to compensation shall receive a Special Draft Choice in the reverse order of their won-lost percentage in the recently completed season, with the selections beginning immediately following the last regular selection in the first round of Rule 4 Draft. If a Club is entitled to more than one Special Draft Choice, its selections will be slotted in succession. If two or more Clubs are tied, the Clubs shall select in the reverse order of their winning percentages in the season prior to the recently completed season, with any remaining ties to be resolved based on preceding season winning percentages.
(c) Signing Club.
i. A Club that signs one Qualified Free Agent who is subject to compensation shall forfeit its highest available selection in the next Rule 4 Draft. A Club that signs more than one Qualified Free Agent subject to compensation shall forfeit its highest remaining selection in the next Rule 4 Draft for each additional Qualified Free Agent it signs. Notwithstanding the above, a Club shall not be required to forfeit a selection in the top ten of the first round of the Rule 4 Draft, and its highest available selection shall be deemed its first selection following the tenth selection of the first round.
ii. A Club’s highest available selection in the next Rule 4 Draft shall be determined after accounting for any selections the Club forfeited for exceeding its Signing Bonus Pool in the Rule 4 Draft. With the exception of draft selections awarded to a Club pursuant to Major League Rule 4(c)(2), all of a Club’s draft selections will be subject to forfeiture pursuant to subsection 4(c)(i) above, including draft selections obtained through assignments, draft selections obtained in the Competitive Balance Lotteries and Forfeited Draft Pick Lotteries, and draft selections awarded as compensation pursuant to subsection 4(b) above.
(a) Any Club signing a contract with a Player under this Section B after the expiration of the Quiet Period described in subsection 2(b) above may not assign his contract until after the next June 15. However, notwithstanding the foregoing, such contract may be assigned for other Player contracts and/or cash consideration of $50,000 or less prior to the next June 16 if the Player gives written consent to such transaction.
(b) There shall be no restriction or interference with the right of a free agent to negotiate or contract with any baseball club outside the structure of organized baseball, nor shall there be any compensation paid for the loss of a free agent except as provided for in this Section B.
(c) A Club and Player (or their designated representatives) shall not enter into any agreement, understanding or contract, or make any representation, promise or commitment, whether implied or explicit, either orally or in writing, that the Club will not make a Qualifying Offer to a Player, or that a Player will not accept a Qualifying Offer if one is tendered to him. Any Club or Club employee that violates this provision will be subject to discipline by the Commissioner, including the potential forfeiture of draft selections.
(d) Retention Bonus.
i. If a Club signs a Player who became a free agent pursuant to this Section B to a Minor League Uniform Player Contract between the date the Player became a free agent as set forth in subsection B(2)(a) above and ten days prior to the commencement of the next succeeding championship season, the Club shall pay the Player a retention bonus of $100,000 if, by 12 P.M. Eastern Time on the fifth day prior to the first day of the championship season, (i) the Club does not agree in writing to add the Player to its Opening-Day 25-man roster or Major League Disabled List at the commencement of the championship season, or (ii) the Club does not provide the Player with his immediate unconditional release.
ii. If a Club agrees to add a Player to its Opening-Day 25-man roster or Major League Disabled List at the commencement of the championship season pursuant to subsection (d)(i) above, the Club must notify the LRD of its decision either to add the Player to its Opening-Day 25-man roster or Major League Disabled List no later than 12 P.M. Eastern Time on the fifth day prior to the first day of the championship season, and the LRD will inform the Players Association.
iii. The $100,000 retention bonus described in subsection (d)(i) above must be paid on or before April 15 of the next succeeding championship season. Such bonus shall not be subject to the non-duplication provision contained in Article IX(F) of this Agreement.
iv. If a Club elects to retain a Player under his Minor League Uniform Player Contract pursuant to subparagraph (i) above by paying the $100,000 retention bonus, the Player may require the Club to provide him with his unconditional release on June 1 if he had not been added to the Club’s 25-man roster or placed on the Major League Disabled List at any time prior to June 1. The Player must notify the Club in writing no later than 2 P.M. Eastern Time on May 28 that he is requesting his unconditional release by 2 P.M. Eastern Time on June 1 if the Club does not add him to its 25-man roster or Major League Disabled List by that time.
v. A Club and Player may agree to a special covenant to a Minor League Uniform Player Contract for a Player covered by this subsection (5)(d) that provides the Player with a retention bonus greater than $100,000, an earlier deadline for adding the Player to its Opening-Day 25-man roster or Major League Disabled List, an advanced payment schedule for the bonus, or an earlier date by which the Player may require the Club to provide him with his unconditional release. Nothing contained herein is intended to modify any other provision contained under this Agreement or the Major League Rules with respect to permissible special covenants in a Minor League Uniform Player Contract.
vi. This subsection (5)(d) shall apply to Players who became free agents pursuant to the provisions set forth in Section B(1) and (2) above, and shall not apply to Players who became free agents pursuant to any other provision of the Basic Agreement or a special covenant to a Major League Uniform Player’s Contract.
(e) The exercise dates of option provisions contained in Uniform Player’s Contracts all must fall within the Quiet Period described in subparagraph (2)(b) above.