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Back in the day, managers who's teams were sucking by the all-star break used dump everyone on their team into the FA pool and create an unfair balance.

Managers can't collude on the superstars.
If somebody had #1 waiver priority late in the season another player could cut somebody to help him win it.
Essentially a trade without trading.

its a preventive measure set up a few years ago by YAHOO to try and prevent people from dumping their rosters and screwing the league. it has its flaws but its objective is to protect all managers in the league.

Because when Dunn ends up hitting 40 homers like he usually does every year, you'll end up kicking yourself. It's there (a) to protect people from panicking over slow starts and (b) to prevent people from dumping all their good players and upsetting the league balance.

That said, if you want to get rid of Dunn (and I wouldn't just drop him - at least trade the guy), ask your commish to remove him from your roster.