Russ Conway: NHL can't implement a cap without the union

[ColoradoHockeyFan]

Anyone else listening to Mojo (Toronto, mojoradio.com)? They just had Russ Conway on, and he was making the point that the league cannot have a salary cap without a CBA and the union. If they were to open the season without a CBA and just open it up to any players, they can't have a league-wide salaray cap.

If so, what exactly is the end game for either side here? Given the myriad of other complications that go along with impasse/replacements, this doesn't seem like an attractive option at all for either side. Thoughts?

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[Weary]

They can have a cap if they want. They'll have to convince a judge it's not an antitrust violation to have one.

 

[ColoradoHockeyFan]

They can have a cap if they want. They'll have to convince a judge it's not an antitrust violation to have one.

So having a league-wide agreement to restrain salaries below a certain amount, with no CBA in place, is not considered collusion? This was the point they were making on the radio... I'm not familiar enough with the law to know myself.

 

[Weary]

That'd be collusion. The only way the league could get away with it is by demonstrating that the players have other viable employment opportunities.

They could argue that overseas teams are an employment option. This is what MLS did to avoid antitrust issues. Due to pay disparities, I don't think the NHL would win on that. They could also see if the WHA or the players' league comes to fruition. I'm not saying they would win on those grounds. But they could take a shot.

 

[nyr7andcounting]

So having a league-wide agreement to restrain salaries below a certain amount, with no CBA in place, is not considered collusion? This was the point they were making on the radio... I'm not familiar enough with the law to know myself.

No you were right in the first post I believe. Without a salary cap written into a CBA that is either agreed to by a union or upheld by the NLRB any kind of salary cap created by teams would be collusion. So obviously no CBA means no salary cap. That's why the union has the power to decertify, if they do there is no CBA to be made and therefore no real restrictions on salaries, free agency etc.

The only way for the owners to get a salary cap is to negotiate it with the union or to declare an impasse and have it upheld by the NLRB. But, the second option is not likely to happen at this point so it would lead you to believe that the 2 sides need to negotiate the cap if this is ever going to end.

 

[Dr Love]

How would it be collusion if the replacement players knew going in that there was a limit on their salaries? If the replacement players are consenting, I don't see how this is much of a problem.

 

[mabus]

there is some misunderstanding about this process, if the league wants to unilaterally impose a cap, they have to do this in steps. First of all, they have to try to negotiate a cap with the union {done}, they have to get to a point where it becomes obvious that no further negotiations would ever resolve the situation {just about done i'd say}. At this point, that would declare an IMPASSE, and their LAST offer to the union would become the NEW CBA, it's not that they would imposse a cap without a cba, they would, instead, have to have a cap proposal in their final offer to the union, then declare an impasse saying that negotiations have broken down permenantly, and their last offer becomes the defacto CBA.

Once that is done, they can impose the cap on the players. The union, can then go before the tribunal and declare that the league has not negotiated in good faith. the new CBA imposed by the union is in effect until the tribunal rules on this. If the tribunal rules in favor of the plaers, then we go BACK to the old cba, and no cap again {this is where it starts to get very ugly}. If the panel rules in favor of the league, the union can then declare a Strike. So now, the league would have a CBA, with a cap, and the league would be on strike.

Once all that happens, the league can, once the union has gone on strike, bring in replacement players {they can't do that before the union goes on strike}. And then it becomes a showdown, will the fans pay to see scabs play, or will the union members walk through the picket lines and resume play. Either way, at that point it will get resolved pretty quickly, it's the mess in between we have to get through, unfortunately.

 

[Weary]

Once that is done, they can impose the cap on the players. The union, can then go before the tribunal and declare that the league has not negotiated in good faith. the new CBA imposed by the union is in effect until the tribunal rules on this. If the tribunal rules in favor of the plaers, then we go BACK to the old cba, and no cap again {this is where it starts to get very ugly}. If the panel rules in favor of the league, the union can then declare a Strike. So now, the league would have a CBA, with a cap, and the league would be on strike.

Instead of striking the players can also vote to decertify the NHLPA. If that occurs, it allows individual players to file antitrust suits against the league. The salary cap would surely be seen as a restraint of trade.

But I don't think the league will seek an impasse. It becomes very dangerous if it is ruled that they didn't bargain in good faith. When ownership fails to bargain in good faith one of the rememdies is restoration of back pay. I don't think the owners have a spare $1.5 billion sitting around to make good on that.

 

[Digger12]

there is some misunderstanding about this process, if the league wants to unilaterally impose a cap, they have to do this in steps. First of all, they have to try to negotiate a cap with the union {done}, they have to get to a point where it becomes obvious that no further negotiations would ever resolve the situation {just about done i'd say}. At this point, that would declare an IMPASSE, and their LAST offer to the union would become the NEW CBA, it's not that they would imposse a cap without a cba, they would, instead, have to have a cap proposal in their final offer to the union, then declare an impasse saying that negotiations have broken down permenantly, and their last offer becomes the defacto CBA.

Once that is done, they can impose the cap on the players. The union, can then go before the tribunal and declare that the league has not negotiated in good faith. the new CBA imposed by the union is in effect until the tribunal rules on this. If the tribunal rules in favor of the plaers, then we go BACK to the old cba, and no cap again {this is where it starts to get very ugly}. If the panel rules in favor of the league, the union can then declare a Strike. So now, the league would have a CBA, with a cap, and the league would be on strike.

Once all that happens, the league can, once the union has gone on strike, bring in replacement players {they can't do that before the union goes on strike}. And then it becomes a showdown, will the fans pay to see scabs play, or will the union members walk through the picket lines and resume play. Either way, at that point it will get resolved pretty quickly, it's the mess in between we have to get through, unfortunately.

But what if the tribunal takes 6 days, 6 weeks, or even 6 months to render a ruling? Are the players forced to come back to their teams and play under a CBA they never agreed to?

You seem to be implying that the players can't go on strike until the NLRB renders a decision, that seems a bit off to me.

 

[Hockee]

They can have a cap if they want. They'll have to convince a judge it's not an antitrust violation to have one.

What legal grounds do you think opposition would have in bringing forth an antitrust suit?

 

[habs9]

NHLPA not able to negotiate any effective cap.

I don't know for sure but I would speculate that it doesn't make sense for the PA to negotiate a cap. If you take a step back is it not true that the NHL needs a CBA to avoid anti-trust issues? They need to avoid anti-trust issues because they hold a draft that restricts player movement. Doesn't the NHLPA really trade some restricted player movement (below age 31) for triggers that help replace the natural inflationary influences of competing for a finite supply of talented players that would occur if there was no draft and no CBA and no NHLPA? At least in a rising revenue scenario.

If any of you heard Doug Maclean's rant on Friday night where he said he had a RFA that would make a $900,000 raise through arbitration but he signed for a $500,000 and he was complaining that owners get criticised for inflating salaries under such a system. Well if player movement were totally free and this player was not a RFA he would probably demand more than a $900,000 raise if he was as valuable as the supposed arbitration award intimates he is. In other words the NHLPA through the CBA trades to Columbus the right to have this player as an RFA until he is 31 but for that right they give the NHLPA arbitration.

Looking at it from this perspective no wonder the NHL cannot get the NHLPA to act as negotiating partner on an effective cap that really eliminates for the players the need for a NHLPA in the first place. They would do better de-certifying the PA and forcing the NHL teams to eliminate the draft and have everyone a free agent.

I don't know if there are any flaws in my perspective but I certainly don't know where we go from here if the above is true. I wonder if the players get this message from the NHLPA though.

 

[mooseOAK*]

How would it be collusion if the replacement players knew going in that there was a limit on their salaries? If the replacement players are consenting, I don't see how this is much of a problem.

Even if that were the case, the league would still need assent in writing in the form of a CBA which would mean that the replacement players would need to unionize.

 

[Hockee]

No you were right in the first post I believe. Without a salary cap written into a CBA that is either agreed to by a union or upheld by the NLRB any kind of salary cap created by teams would be collusion. So obviously no CBA means no salary cap. That's why the union has the power to decertify, if they do there is no CBA to be made and therefore no real restrictions on salaries, free agency etc.

The only way for the owners to get a salary cap is to negotiate it with the union or to declare an impasse and have it upheld by the NLRB. But, the second option is not likely to happen at this point so it would lead you to believe that the 2 sides need to negotiate the cap if this is ever going to end.

Wrong.

It's only collusion if it's expressed and proven.

Is there an NHL rule that Nolan can't be an NHL head coach? Nope. But can he get a job? Nope.

The provision within antitrust law, especially with regards to price fixing (which is where the relevant case law would be found in this instance), is that a market leader can come out and say that it is capping salaries at 39m or whatever, and the rest of the teams can hold firm to that number on their own. It's not written into the league rules, but it can be just as solid.

Then, if a player wants money that would take the team over that limit, the team could sign him but risk being blackballed from being able to make any sort of transactions until they got back under that number.

There are many legal ways that a cap can be put in place without a union.

Another easy way would be to decertify the union when it becomes clear that another player's union is ready to be put in place, then certify that one.

Finally, without a CBA, there is no need for a cap. The Union is why the NHL needs a cap. Without a union, individual teams can spend whatever they need to.

 

[kdb209]

But what if the tribunal takes 6 days, 6 weeks, or even 6 months to render a ruling? Are the players forced to come back to their teams and play under a CBA they never agreed to?

You seem to be implying that the players can't go on strike until the NLRB renders a decision, that seems a bit off to me.

From reading articles and other threads here, I beleive that once an impasse is declared, the lockout is legally over - the PA must then vote to strike.

Of course one wild card here is that would they? Up till now Goodenow and the executive committe has done a good job excluding the rank-and-file from the process. In order to strike, though, they would need to have a secret ballot of all 700+ members. It would effectively be a player vote on the leagues' last offer. I think many dissatisfied players may very well vote not to strike and go back and end this madness.

Can someone (wetcoaster?) please definitively clarify any post impasse series of events.

 

[Weary]

What legal grounds do you think opposition would have in bringing forth an antitrust suit?

Restraint of trade. They are colluding by setting limits on the amount of money available for hockey players' salaries.

 

[Weary]

The provision within antitrust law, especially with regards to price fixing (which is where the relevant case law would be found in this instance), is that a market leader can come out and say that it is capping salaries at 39m or whatever, and the rest of the teams can hold firm to that number on their own. It's not written into the league rules, but it can be just as solid.

Then, if a player wants money that would take the team over that limit, the team could sign him but risk being blackballed from being able to make any sort of transactions until they got back under that number.

Blackballing one team for being over a salary limit is collusion.

 

[Wetcoaster]

From reading articles and other threads here, I beleive that once an impasse is declared, the lockout is legally over - the PA must then vote to strike.

Of course one wild card here is that would they? Up till now Goodenow and the executive committe has done a good job excluding the rank-and-file from the process. In order to strike, though, they would need to have a secret ballot of all 700+ members. It would effectively be a player vote on the leagues' last offer. I think many dissatisfied players may very well vote not to strike and go back and end this madness.

Can someone (wetcoaster?) please definitively clarify any post impasse series of events.

If the NHL declares an impasse the labour dispute continues because an impasse is only a temporary solution under NLRB case law.

Once the NHL declares an impasse they must implement their final offer as the CBA, they then open up for business and try to recruit replacement players.

This only applies to US based teams. Also the NHL will be constrained by immigration law to only recruit US citizens and legal US permanent residents.

The union then has several options.

They can capitulate and return to work under the imposed CBA. That seems unlikely.

The union can vote to strike and set up picket lines. They would likely file motions with the NLRB claiming that an impasse in fact has not been reached and/or that the NHL committed an unfair labour practise such as failing to bargain in good faith. This was the 1994 MLBPA approach as they could not decertify at that time and rely upon antitrust law because MLB had a judicial exemption from antitrust since eliminated by the 1998 Curt Flood Act. The NLRB ruled in favour of the MLBPA, issued an injunction against the owners and ordered them to play for two more years under the previous CBA. According to statistics I have seen only about 1 in 10 impasse declarations are approved by the NLRB and that has not changed under Bush. The reason is that the impasse decalration is judge made law and the NLRB is constrained by legal in the supervisory courts above them. The loss at the NLRB opens the NHL up to potentially huge financial damages from players under contract, players who should have been under contracts and the replacement players could1 then sue using antitrust laws claiming treble damages since there was an unlawful CBA and they were not union members.

The union can decertify and rely upon antitrust law as the NFLPA did in 1987. Ultimately the NFLPA succeeded in having free agency recognized and the Rozelle Rule eliminated and $195 million was paid by the owners to settle the antitrust suits. Whereupon the NFLPA reconstituted and negotiated a new CBA.

In Canada who knows what the Labour Boards would rule. Also immigration law would operate to prohibit foreign nationals from playing for Canadian based teams.

In BC and Quebec there is a prohibition on using replacement workers and although the union is not certified there is an exception to this rule known as "voluntary recognition" where the employer has recognized an uncertified union as bargaining agent. Not only has the union been recognized but CBA's have already been negotiated.

Apparently the Ontario government is in the process of re-imposing the replacement worker ban that prevented the Blue Jays from putting a team in Toronto in the 1994 MLB labour dispute. The Expos were similarly constrained.

Canada has very specific rules regarding antitrust activities by professional sports teams with unlimited fines and up to five years in jail.

Conspiracy relating to professional sport
48. (1) Every one who conspires, combines, agrees or arranges with another person

(a) to limit unreasonably the opportunities for any other person to participate, as a player or competitor, in professional sport or to impose unreasonable terms or conditions on those persons who so participate, or

(b) to limit unreasonably the opportunity for any other person to negotiate with and, if agreement is reached, to play for the team or club of his choice in a professional league

is guilty of an indictable offence and liable on conviction to a fine in the discretion of the court or to imprisonment for a term not exceeding five years or to both.

I am not sure the NHL would want to roll the dice given these potential pitfalls.

 

[bcrt2000]

the whole problem with the system is players can in essence collude, whether its through arbitration, or common player agents (ie sellanne/kariya) while owners can't.. and i'm not saying owners should be allowed, but the players have the leverage always when it comes to contract negotiations

 

[Phanuthier*]

Anyone else listening to Mojo (Toronto, mojoradio.com)? They just had Russ Conway on, and he was making the point that the league cannot have a salary cap without a CBA and the union. If they were to open the season without a CBA and just open it up to any players, they can't have a league-wide salaray cap.

If so, what exactly is the end game for either side here? Given the myriad of other complications that go along with impasse/replacements, this doesn't seem like an attractive option at all for either side. Thoughts?

I'd say there's a couple possible ends...
- The bottum half of the PA cracks and outsts Goodenow
- The PA is broken (by waiting) and the NHL is left on life support
- The PA is broken by starting their own league, have it fail miserably and the costs drive the PA to bankrupcy.
- NHL teams fold, causing lower tier playeres to realize their jobs are at risk, and outsts Goodenow.
- The NHL turns to replacement players and players slowly cross the (picket?) line

I'm betting on the last one. In all cases, Goodenow loses the war and gets ousted, while the NHL is left on life support when they get back and are nothing more then a tier 2 sport.

 

[dakota]

the whole problem with the system is players can in essence collude, whether its through arbitration, or common player agents (ie sellanne/kariya) while owners can't.. and i'm not saying owners should be allowed, but the players have the leverage always when it comes to contract negotiations

that is an exclellent point... i would love to see an owner sue an agent or player for collusion to drive up salaries... hahaha that would be sweet...

you are right the owners cannot keep salaries at a reasonable level even though they are all "partners" in the league because they would be apparantly guilty of collusion... whereas the players can collude to raise salaries with their agents. and brothern.... great point.

 

[Wetcoaster]

the whole problem with the system is players can in essence collude, whether its through arbitration, or common player agents (ie sellanne/kariya) while owners can't.. and i'm not saying owners should be allowed, but the players have the leverage always when it comes to contract negotiations

Unions are specifically exempted from antitrust laws and have been since they have been no longer considered criminal conspiracies in restraint of trade.

The law recognizes that there is inequality of bargaining power on the part of employers and allows unions to organize and bargain collectively.

Here is the declaration of principles excerpted from the NLRA:

The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.

Experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury, impairment, or interruption, and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest, by encouraging practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions, and by restoring equality of bargaining power between employers and employees.

It is declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.

 

[joechip]

that is an exclellent point... i would love to see an owner sue an agent or player for collusion to drive up salaries... hahaha that would be sweet...

you are right the owners cannot keep salaries at a reasonable level even though they are all "partners" in the league because they would be apparantly guilty of collusion... whereas the players can collude to raise salaries with their agents. and brothern.... great point.

This is because of the anti-market nature of Anti-Trust Law, which is the root cause of this labor dispute. Anti-Trust Law is founded on very shaky economic principles and as such creates these stupid and unbalanced relationships between labor and management.

In a perfect world the players would be free agents, but, once under contract to an NHL team subject to NHL by-laws as regarding their movement from NHL team to NHL team.

Reinstituting a draft under this system would look very similar to the situation today.

If this lockout does nothing more than enlighten a great number of people to the evil of Anti-Trust law it would have been all worth it.

Ta,

 

[AM]

Unions are specifically exempted from antitrust laws and have been since they have been no longer considered criminal conspiracies in restraint of trade.

The law recognizes that there is inequality of bargaining power on the part of employers and allows unions to organize and bargain collectively.

Here is the declaration of principles excerpted from the NLRA:

Yes, but generally the employees arnt multi-millionaires who can hire gads of lawyers(not to mention agents yes men and Goodenows) to protect their rights.

 

[nyr7andcounting]

Wrong.

It's only collusion if it's expressed and proven.

Is there an NHL rule that Nolan can't be an NHL head coach? Nope. But can he get a job? Nope.

The provision within antitrust law, especially with regards to price fixing (which is where the relevant case law would be found in this instance), is that a market leader can come out and say that it is capping salaries at 39m or whatever, and the rest of the teams can hold firm to that number on their own. It's not written into the league rules, but it can be just as solid.

Then, if a player wants money that would take the team over that limit, the team could sign him but risk being blackballed from being able to make any sort of transactions until they got back under that number.

There are many legal ways that a cap can be put in place without a union.

Another easy way would be to decertify the union when it becomes clear that another player's union is ready to be put in place, then certify that one.

Finally, without a CBA, there is no need for a cap. The Union is why the NHL needs a cap. Without a union, individual teams can spend whatever they need to.

Sure it is possible for all the ownes to stay under a certain payrolls without a salary cap but it would be pretty hard to do. There are ways around it, but under the circumstances you just talked about owners would have to be extremely careful and sooner or later they would get caught.

"expressed and proven"... wouldn't the fact that a market leader comes out and caps his salaries at 39m express and prove that the owners are all staying under a certain payroll despite there not being salary cap in the CBA (collusion). If a team came out and said we are not spending more than 40 million and all the other teams came out and said we won't spend more than the highest spending team, wouldn't that be collusion?

On top of that, as someone else said, even if the owners were able to cap their payrolls without anyone being able to prove they are colluding nothing would stop a team from spending more than that level. And once they did, there would be nothing the other owners could do it about. The other teams would have a hard time "blackballing" the team who goes over because wouldn't that be obvious collusion. And once one owner spends over that amount I am sure the rest would follow before they risk being charged with collusion, and at that point the league is just back to where it is now.

The owners could informally collude but I doubt it would last long enough for it to be an effective cap on salaries. They would get caught or teams would spend over the "cap" sooner or later. The only real salary cap that can be imposed is one that is negotiated with the union or upheld by the NLRB during an impasse.

 

[Munchausen]

I don't know for sure but I would speculate that it doesn't make sense for the PA to negotiate a cap. If you take a step back is it not true that the NHL needs a CBA to avoid anti-trust issues? They need to avoid anti-trust issues because they hold a draft that restricts player movement. Doesn't the NHLPA really trade some restricted player movement (below age 31) for triggers that help replace the natural inflationary influences of competing for a finite supply of talented players that would occur if there was no draft and no CBA and no NHLPA? At least in a rising revenue scenario.

If any of you heard Doug Maclean's rant on Friday night where he said he had a RFA that would make a $900,000 raise through arbitration but he signed for a $500,000 and he was complaining that owners get criticised for inflating salaries under such a system. Well if player movement were totally free and this player was not a RFA he would probably demand more than a $900,000 raise if he was as valuable as the supposed arbitration award intimates he is. In other words the NHLPA through the CBA trades to Columbus the right to have this player as an RFA until he is 31 but for that right they give the NHLPA arbitration.

Looking at it from this perspective no wonder the NHL cannot get the NHLPA to act as negotiating partner on an effective cap that really eliminates for the players the need for a NHLPA in the first place. They would do better de-certifying the PA and forcing the NHL teams to eliminate the draft and have everyone a free agent.

I don't know if there are any flaws in my perspective but I certainly don't know where we go from here if the above is true. I wonder if the players get this message from the NHLPA though.

Aiight. Let's put a hard cap at 25M and eliminate player movement restrictions.