With the end of the reserve clause, the players and the league negotiated a new collective bargaining agreement which was signed on July 12, 1976.
Type A free agents were those determined by the Collective Bargaining Agreement to be in the top 20% of all players based on the previous two seasons.
Teams losing Type B free agents to whom they had offered arbitration received only a supplemental pick as compensation.
[2] The collective bargaining agreement between MLB and its players union, signed on November 22, 2011, and taking effect in the 2012 season, dramatically changed free agent compensation.
[4] However, if a player is traded during the final season of his contract, his new team will be ineligible to receive any draft pick compensation.
[8][9] Notable "Super Two" players include Nolan Arenado, Chris Archer, Anthony Rendon, and Avisail Garcia.
The arbitrator chooses one number or the other, based on which offer is closest to the salaries of players with similar ability and service time.
[citation needed] Occasionally, a team may wish to sign a player in his second or third year to a long-term contract, and the resulting negotiations can involve salaries significantly higher than minimum.