Even though Dustin McGowan has only appeared in 84 games in the major leagues, he actually accrued 6 years and 113 days of major league service time because his time on the disabled list counts towards his mileage. As a "veteran" with five or more years of service, McGowan receives some special rights from the Collective Bargaining Agreement (CBA), including one where he must give written consent before being outrighted by his club. If he doesn't give consent, he can choose to refuse outright and elect free agency either immediately or effective at the end of the season.
Just a quick refresher: in order to send McGowan to the minors, the Blue Jays must send him on an outright assignment, which removes him from both the 25- and the 40-man rosters. In order for the outright assignment to go through, not only does McGowan have to give consent, but he must be placed on outright waivers, in which all 29 other teams in the MLB will have a chance to put in a claim. Should he be claimed through waivers, the claiming club pays $20,000 and accepts full responsibility for McGowan's remaining contract. Since the oft-injured McGowan is owed the remaining portion of his $1.5 million salary this year, plus $1.5 million for 2014 and a $500,000 buyout in 2015, it is assumed that not too many teams would be willing to take a risk and claim him.
Drunk Jays Fans' Andrew Stoeten wrote a nice piece summarizing the possible roster moves Alex Anthopoulos and the Blue Jays could enact to make room for Jose Reyes when he returns from the 60-day disabled list on Wednesday. Recall that players on the 60-day DL are neither on the 25- nor the 40-man roster.
I had always thought that McGowan would give up his remaining salary if he elected free agency. In my mind, electing free agency is like resigning where one does not expect termination pay; while being released is like being fired where one would expect termination pay. However, Stoeten wrote that, in his interpretation of the CBA, the Blue Jays will be on the hook for the rest of the salary guaranteed to McGowan should he refuse outright assignment and elect free agency (emphases mine):
Would he get claimed on waivers? With about $2.7-million still owed him and fewer than 25 big league innings since 2008, perhaps not. However, if my understanding of the CBA is correct– which, it’s safe to say, is a big if– that’s not so much the issue. McGowan has over six years of service time, which gives him certain rights. Specifically, if he clears waivers and the Jays attempt to assign him to a minor league affiliate, he can refuse the assignment and become a free agent. And because he has so much service time, "if he is released and signs with a new team," Purple Row explains, "his previous team must pay the difference in salary between the two contracts if the previous contract called for a greater salary." So, he could refuse the assignment, still get all the same money, and take a league-minimum deal with a club that might actually have use for him, while leaving the Jays to pay the rest. Not exactly optimal for the club, because… what’s McGowan got to lose in that situation?
Fellow SB Nation baseball community Purple Row wrote this (emphases mine):
If the player refuses his assignment to the minors, the team must either release him, making him a free agent, or keep him on the major league roster.
Regardless, in the case of the five-year service player, the team is obligated to pay the player under the terms of his guaranteed contract. If he is released and signs with a new team, his previous team must pay the difference in salary between the two contracts if the previous contract called for a greater salary.
Going back to the original document--the current CBA--we can see that perhaps there was an error in interpretation by Stoeten and Purple Row. The clauses that govern this case are Article XIX(A)(2)(a) and XIX(A)(2)(c). XIX(A)(2)(a) is the one that gives a veteran player the right to refuse outright and XIX(A)(2)(c) reads like this (again, emphasis mine):
A Player who elects to become a free agent under this paragraph (2) shall immediately be eligible to negotiate and contract with any Club without any restrictions or qualifications. Such Player shall not be entitled to receive termination pay. Such a free agent shall receive transportation and travel expenses in the same manner as he would if he had been unconditionally released except that he shall be limited to receiving travel expenses to his new club if he reports to it directly, provided such expenses are less than to his home city.
Unless there is another clause in the CBA that I missed, I think that my original thought was correct and that Dustin McGowan will give up any remaining guaranteed salary from his current contract should he refuse an outright to the minor leagues (but he would get the remaining salary for 2013 if he postpones his free agency until the end of the season). And the language is clear: a player elects to become a free agent--the club does not release him. This makes sense: why would a club pay for someone who chooses to leave? Just to be clear, "termination pay" is defined as "an amount equal to the unpaid balance of the full salary" in Article IX(C).
The conclusion is that Dustin McGowan has about 2.7 million reasons to allow the Blue Jays to outright him. Whether he makes it through without being picked up by another club is a risk that Toronto would have to make if Anthopoulos chooses to make this move.
According to an MLB official confirming with Sportsnet's Ben Nicholson-Smith, should Dustin McGowan refuse assignment, he could effectively force the Blue Jays hand and ensure his release with full termination pay.