How free agency works in the National Hockey League (NHL)

One of the most exciting aspects of the National Hockey League (“NHL”) off-season is the free agency period. This period is when certain players, who have met a variety of criteria, are free to choose which team they would like to play for.

Unlike the NHL draft process, as discussed in the author’s related article Signing New Talent: How The Entry Draft System Works in The National Hockey League, free agency provides the player with a great deal of power to choose where he would like to play.

History of Free Agency in U.S. sport

The concept of free agency in U.S. sports is a right that has been won by the players during the collective bargaining process. This right allows players, who have met certain qualifications, to be free to choose which team they would like to play for, once their current playing contract expires. It is now well established in North American sport and seen in all five major sport leagues.¹ However, that was not always the case. The first league to have a free agency process was Major League Baseball (“MLB”). This progress for athlete’s rights did not come without a hard fought legal fight between the players and the owners. The players did not earn the right to have a choice of where to play until 1976.

The champion for the player’s cause was a ball player by the name of Curt Flood,² A three-time All-Star player for the St. Louis Cardinals. Flood was a decorated and highly skilled center fielder, who helped his team win the World Series twice. While Flood was one of the best players of his era, his legacy reaches far beyond the baseball diamond.

In 1969 MLB was still operating with the “reserve clause”, which essentially meant that the rights to a player were owned by the drafting team until that team transferred those rights or released the player. The “reserve clause” was a clause in the player contract that granted the club the right to trade, release, reassign, or sell the rights to the player to another club, without input from the player, and did not allow for the player to sign with a new club once the original term of the contract had expired.

At the end of the 1969 season, Flood was traded by St. Louis to the Philadelphia Phillies, however, Flood refused to report to the Phillies.³ Instead of joining the team that technically owned his rights, Flood along with the MLB Players Association (“MLBPA”) filed a lawsuit against MLB challenging the reserve clause. ⁴

Flood and the MLBPA took the case all the way up to the United States Supreme Court.⁵ In 1972 the Supreme Court held that while Flood should have the right to choose where he would like to play, the reserve clause was not illegal due to the MLB anti-trust exemption.⁶ This exemption was granted to MLB by the Supreme Court in 1921.⁷ The Court went on to state that the only way players can receive free agency is either by an act of Congress or through the collective bargaining process.⁸

Soon after the decision of the Supreme Court, the MLBPA and baseball owners and players association came to an agreement to include a binding arbitration process for internal grievances in the collective bargaining agreement. In 1975, two pitchers were brought into the arbitration process since their current club had exercised the reserve clause renewal right, which allowed the club to renew an expired contract for an additional season. This right lasted in perpetuity. However, these two players never signed the renewal contract and argued that without signing the renewal they became free to sign with any team they chose. The arbitrator, Peter Seitz ruled any player who plays for one year without a contract has the right to become a free agent.⁹

In 1976, MLB and the MLBPA agreed to amend the Collective Bargaining Agreement to allow players who have played for at least six seasons to become free agents.¹⁰ Thus giving birth to modern day free agency.

Free Agency in the NHL

In 1972, the NHL granted limited and restricted rights to players. However, it was not until 1995 when the NHL granted the players the right to become truly unrestricted free agents.¹¹ The modern free agency system in the NHL is governed by Article 10 of the current NHL–NHL Players Association (“NHLPA”) Collective Bargaining Agreement (“CBA”).¹²