Originally Posted by Hoosier Red
Arbitration only exists for players with a certain amount of playing experience who are not yet eligible for free agency.
It doesn't happen often, but a player with 6 or more years of service whose contract expires can elect arbitration over free agency, provided that his team tenders him a contract.
This happened with Roger Clemens late in his career. The Astros (I think) were sure he would opt for free agency so they tendered Clemens a contract, knowing that they would get a couple draft picks if he opted for free agency. Clemens decided to go to arbitration, shocking his team and foiling their plans for cost certainty and a couple draft picks.
I'm not totally downloaded on the latest CBA, but I'm pretty sure this is still the rule.