Flood v. Kuhn: Case Brief, Summary & Decision

Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Do federal antitrust laws apply to professional baseball teams? In this lesson, we'll examine the landmark Supreme Court case Flood v. Kuhn, which tried to answer that very question.

Antitrust Laws

How much power should companies have to band together and control a market? That's exactly the kind of question that the United States government has to face every day. On one hand, many people dislike the government telling businesses what to do. On the other hand, when several businesses work together to form a kind of monopoly, it can have a seriously detrimental effect.

Think of it like this: say that you want to buy a loaf of bread. But every single bread company in the country worked together to make a loaf of bread cost $1,000. When you go to the store, there are no loaves of bread that cost less than $1,000. You're stuck! That's the kind of thing that the Sherman Antitrust Act of 1890 was trying to stop. It said that businesses could not collude to exert control over a market. That is, they couldn't work together to form a monopoly.

But there were exceptions to the Sherman Act. One of them had a huge impact on the livelihood of baseball players. This exception was the focus of the Supreme Court of the United States (SCOTUS) case Flood v. Kuhn. Let's take a closer look at the case.

The Case

To understand the impact of Flood v. Kuhn, we first have to look at something called the reserve clause in baseball. Since almost the beginning of professional baseball, way back in the 1800s, Major League Baseball used a clause in their player contracts that said that the player was not allowed to negotiate to go to other teams. Either they had to stay with their team or go for a year without playing (and without getting paid).

The reserve clause was put into effect to prevent the income of baseball players from rising. Baseball teams knew that if players could negotiate with other teams, the salaries players made would go up. All the way back in the 1920s, a challenge to the reserve clause using the Sherman Antitrust Act occurred. But back then, the Supreme Court decided that baseball should be granted an exception to antitrust laws. This was because the Sherman Act was a federal law, and therefore could only apply to interstate commerce. In the 1920s, the Supreme Court decided that baseball teams were not interstate commerce. That is, a team in St. Louis only did business in Missouri and was therefore regulated by Missouri laws. A team in New York City only did business in New York and was regulated by New York laws.

In the 1970s, though, Cardinals player Curt Flood sued Bowie Kuhn, the commissioner of Major League Baseball at that time. Flood's team was trading him, and under existing law, he only had two options: agree to the trade or leave his contract and not be able to play for a year. He wanted a third option: he wanted to be able to be a free agent, a player able to negotiate immediately with other teams without waiting a year.

The Decision

Flood's argument was simple: Major League Baseball was an interstate business and each team was just a part of the whole. Thus, it was subject to the Sherman Act and the reserve clause was illegal.

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