Designated for assignment (or DFA) is a contractual term used in Major League Baseball. A player who is designated for assignment is immediately removed from the team's 40-man roster, after which the team must choose either of the following options:
Typically, a player is placed on waivers after being designated for assignment for the purpose of outrighting him to one of the club's minor league teams. A player who is outrighted to the minors is removed from the 40-man roster but is still paid according to the terms of his guaranteed contract. A player can only be outrighted once in his career without his consent. However, a player must clear waivers (that is, no other team placed a waiver claim on the player) to be sent to a minor league team. Also, if the player has five or more full years of major league service, he must give consent to be assigned to the minors. If the player withholds consent, the team must either release him or keep him on the major league roster. In either case, the player must continue to be paid under the terms of his contract.
Once a player is designated for assignment, he may be traded. Some teams have been known to designate players for assignment to increase interest in the player, especially among teams that are not at the top of the waiver list (the order of which is determined by record). For example, in May 2006, Texas Rangers reliever Brian Shouse was designated for assignment and then traded to the Milwaukee Brewers four days later. The Brewers could have waited until Shouse was placed on waivers so they would not have had to give up a player in a trade, but according to the waiver rules, they would have risked losing the claim if a team ahead of them in line also put a claim in on him.
Also, under the "ten-and-five rule," if a player has ten years of Major League service, the last five with his current team, he cannot be traded without his consent.
If a player is not traded, but has cleared waivers, he may be released from the team. The player is then a free agent and may sign with any team, including the team that just released him. The team that releases him is responsible for the salary the player is owed, less what he is paid by the team that signs him (in practice, the amount paid by the signing team is usually a pro-rated portion of the Major League minimum salary).
If the player clears waivers when being designated for assignment, he can most commonly be "outrighted" from the 40-man roster and transferred to the roster of a Minor League affiliate of the parent club. Outrighting can also happen to a player who is already in the minors, but is occupying a 40-man roster space that the organization wishes to fill with some other player. A player can only be outrighted without his consent once in his career.