When the players' union and the league allow free agency, i.e. players may bargain for employment with any team, the players have more alternatives. They can always cut a better deal with another team. Free agency leads to higher player salaries. When reserve clauses are allowed, i.e. players are bound to negotiate with only one team, the players have fewer alternatives. Either they reach an agreement with this team or they leave the sport.
Reserve clauses tend to keep salaries low.