Cage-free is a labeling term regulated by the USDA. It refers to eggs that require hens to be raised in an enclosed facility or building where they have unlimited access to food and water. Hens are also allowed to roam free as opposed to being raised in battery cages.
Allowing hens to live outside of cages gives them the opportunity to participate in instinctive behaviors such as establishing and maintaining a flock. Although it is a better alternative than battery cages, which keep birds in confined quarters, most of cage-free hens still may never get to actually set foot outside. Instead, an enclosed or covered area is provided.
The cage-free label is not an identifier of the living conditions of the birds. It represents a set of requirements for growers.
Cage-Free vs. Battery-Cage Eggs. The Humane Society.