The long-simmering dispute had boiled over on Feb. 19 when owners unilaterally implemented a compensation plan under which a team signing a ranking free agent would give up a roster player and an amateur draft choice.
Six days later, believing the owners' plan would gut the free agency players had battled so hard to win, the union's executive board set a strike deadline of May 29, which was later delayed until June 12 as the sides waited for resolution of a National Labor Relations Board charge.
Despite significant short-term economic losses, players remained unified and stuck together through the summer while owners began to exhaust the $50 million in strike insurance they had purchased from Lloyds of London in anticipation of the stoppage.
"Top to bottom, star to sub, liberal to conservative, the players stood firm," Marvin Miller said years later. "It was the most principled strike I'd ever been associated with. It was the Association's finest hour."
The key to the July 31 agreement was a compromise that eliminated direct player compensation from clubs that signed free agents in favor of a plan in which a pool of players from all clubs was created to provide compensation for teams "losing" a free agent.
The 1981 Basic Agreement also raised the minimum salary to $40,000.