Class action lawsuits filed against OHL, QMJHL, & WHL

[UsernameWasTaken]

The action is over wages paid to the players

An unprecedented class action lawsuit striking at the economic foundations of junior hockey in Canada alleges the Canadian Hockey League and its teams “conspired†to force young players into signing contracts that breach minimum wage laws.

A statement of claim filed in a Toronto court Friday and obtained by the Star, seeks $180 million in outstanding wages, vacation, holiday and overtime pay and employer payroll contributions for thousands of young players given as little as $35 a week for practices, games, training and travelling that could add up to more than full-time hours.

The league and its teams “conspired and agreed together . . . to act in concert to demand or require that all players sign a contract which the defendants knew was unlawful,†the claim alleges. “Such conduct was high-handed, outrageous, reckless, wanton, deliberate, callous, disgraceful, wilful and in complete disregard for the rights of the (players).â€

http://www.thestar.com/news/world/2...gainst_canadian_hockey_league_over_wages.html

The plaintiffs' lawyer was interviewed today on Metro Morning on CBC. They will probably have the radio clip up later.

Click to read more...

 

[East Hockey]

The representative plaintiff is Sam Berg... he played 8 games in the OHL.

That kind of undermines the entire thing, no?

 

[Fugu]

I guess we knew this was coming.

A couple points that I think will be key in the trial (or settlement):

Payment is fixed depending on the age of players and the league in which they play. In the Ontario Hockey League (OHL), for example, players are paid between $50 and $120 a week for what could be up to 65 hours of work with no provisions for overtime, vacation or holiday pay, the statement of claim says.

The league’s teams are “unjustly enriched†with “hundreds of millions of dollars in revenues annually†based on the services provided by their young players, the claim alleges.
...

The statement of claim takes sharp aim at the CHL’s “education package,†which provides scholarship funding to players who register in a recognized college or university program within 18 months of their last game in the league.

Those who choose to extend their hockey careers by signing with professional teams in Europe or North America after their CHL careers, or those that fail to maintain a certain grade point average, lose that funding.

Those restrictions make it “extremely difficult†for players to meet the requirements of the program, the statement claims.

“On average, a teams’ total annual payout for all players on the team is $30,000 a year toward the education package,†the statement reads. “This amount is equivalent to only four former players per team actually reaping the benefits of the education package.â€

Given that the teams themselves aren't educational institutions offering degrees, with scholarships to the kids who also play a sport while attending classes, I think it will harder for them to make the student athlete label stick. They in fact are for profit entities. If the scholarship packages are also riddled with loopholes, that's just more icing on the cake.


One legal firm's analysis (wrt to Canadian law), Sylvestre Fafard Painchaud:

After an analysis of the CHL player payments and working conditions, the firm concluded “the legal status of the junior hockey players with their respective team is certainly one of an employee, pending some exceptions. This likely triggers recourse in remedy for breach of statutory minimum wage provisions, as brought by the Employment Standard Act in Quebec or in Ontario.â€

The league structure could be found to encompass “possible conspiracies, market restrictions, and abuse of dominance by the CHL and/or the teams. Yet, it remains unfairly detrimental to the economic interests of the junior hockey players,†the Montreal firm concluded. “We believe that filing a nationwide class-action lawsuit based on the antitrust provisions of the Competition Act and Canadian provinces’ labour legislation regarding minimum wage, would be the best approach.â€

It seems, in general, that the legal analysts are siding with the conclusion that the players are in fact employees and that employment laws need to be applied.

Should be very interesting to see how this unfolds.

 

[Fugu]

The representative plaintiff is Sam Berg... he played 8 games in the OHL.

That kind of undermines the entire thing, no?

Why?

 

[East Hockey]

Why?

Who is he to speak for the players?
MOD

A lot of players are happy to get the opportunity to play the game, ride the bus, get exposure to scouts, and get an education or pro contract at the end of it.

A lot of CHL teams would be in serious financial trouble if they had to pay players. It'll probably hurt more people than it will help.

 

[radapex]

It seems, in general, that the legal analysts are siding with the conclusion that the players are in fact employees and that employment laws need to be applied.

Should be very interesting to see how this unfolds.

The league’s teams are “unjustly enriched†with “hundreds of millions of dollars in revenues annually†based on the services provided by their young players, the claim alleges.

I'd like to know where they're getting that figure, because I'd be shocked if any team even hits the $10-million mark. Here are the top drawing teams from each of the three leagues, by combined (regular season + playoff) attendance:

WHL - Calgary Hitmen - 319,582
OHL - London Knights - 342,342
QMJHL - Quebec Remparts - 357,743

Playoffs were a relative non-factor for all three as London played just four home playoffs games, Calgary three, and Quebec two. So a reasonable maximum for ticket income would be to take the top ticket price (single game adult) and multiply it by total attendance. That gives us:

WHL - Calgary Hitmen - 319,582 x $26.00 = $8,309,132
OHL - London Knights - 342,342 x $19.75 = $6,761,254
QMJHL - Quebec Remparts - 357,743 x $15 = $5,366,145

I think you'd be hard pressed to find a team with a higher max ticket price than Calgary. Realistically, you're looking at a ceiling of $9-million in ticket revenue per season. I'm interested to see where the other $91-million comes from...

 

[CharlieGirl]

I'd like to know where they're getting that figure, because I'd be shocked if any team even hits the $10-million mark.

Exactly. There is a huge misconception out there about the kind of money the CHL teams make. I'd love to see an accounting of how they figure the league makes "hundreds of millions".

I don't know if the lawyers are looking to get a share of what they estimate to be a massive amount of money or what their motive is otherwise.

As for Berg's situation, it sounds as though he was lied to by a shady GM. He may have a case for breach of contract or something of that like, but that is vastly different from the basis for the class action suit.

 

[seanlinden]

What I find interesting in this case; is that the entire defence for the league rests on the argument towards them being student-athletes; and therefore exempt from the players being considered employees.

Should that argument fall, there's basically no debate over how much trouble the CHL is in. They have been acting as a cartel to restrict player wages and freedom of labour, they have been paying well below minimum wage.

So the question is, what defines a student-athlete and therefore exempts these players? Is it "playing for" a non-profit institution (such as a University)?

 

[seanlinden]

Who is he to speak for the players?
MOD

A lot of players are happy to get the opportunity to play the game, ride the bus, get exposure to scouts, and get an education or pro contract at the end of it.

A lot of CHL teams would be in serious financial trouble if they had to pay players. It'll probably hurt more people than it will help.

He's somebody who feels he got screwed by the league.

The players who are happy to play in the current situation, will not join the class action lawsuit...however, I'd suspect there's a lot more players who will.

 

[UsernameWasTaken]

What I find interesting in this case; is that the entire defence for the league rests on the argument towards them being student-athletes; and therefore exempt from the players being considered employees.

Should that argument fall, there's basically no debate over how much trouble the CHL is in. They have been acting as a cartel to restrict player wages and freedom of labour, they have been paying well below minimum wage.

So the question is, what defines a student-athlete and therefore exempts these players? Is it "playing for" a non-profit institution (such as a University)?

If you're in the US as a "student athlete" there is a specific visa that you get - I'm willing to bet none of the non-US players on the American teams are there on an F1 visa.

I'd be interested to know what permits the players are in Canada/US on (not incl. the players playing in their home country). It would be very telling.

 

[Major4Boarding]

Does anyone happen to know how much the CHL as a whole would take in regarding broadcasts?

 

[Blind Gardien]

Exactly. There is a huge misconception out there about the kind of money the CHL teams make. I'd love to see an accounting of how they figure the league makes "hundreds of millions".

I don't know if the lawyers are looking to get a share of what they estimate to be a massive amount of money or what their motive is otherwise.

As for Berg's situation, it sounds as though he was lied to by a shady GM. He may have a case for breach of contract or something of that like, but that is vastly different from the basis for the class action suit.

You can probably find the statements for the Kitchener Rangers, they are public and usually around somewhere on the internet.

 

[CharlieGirl]

You can probably find the statements for the Kitchener Rangers, they are public and usually around somewhere on the internet.

Or in my desk at home...

I guarantee there is nowhere near "hundreds of millions" in there and Kitchener is financially better off than a lot of teams.

 

[superdeluxe]

Hundreds of millions of dollars in profits huh?

 

[MaskedSonja]

This is going to be very interesting to watch to see what the courts deem as 'employment' and whether the scholarships are indeed equal in value in lieu of being paid a salary.

Because we know where this goes if the courts do indeed determine that players are "employees" with regards to pay, overtime, holiday pay, ect-that brings a whole new light and angle and probably opens the door onto Unionizing said players.

I too am uncertain of the "100's of millions" of dollars in profit , but if the courts do find for the plantiffs here and agree on 180 million settlement-possiblity that would effectively wipe out the CHL?

 

[CharlieGirl]

I too am uncertain of the "100's of millions" of dollars in profit , but if the courts do find for the plantiffs here and agree on 180 million settlement-possiblity that would effectively wipe out the CHL?

I suspect so. At the very least, a lot of teams would fold and the perks the players now get from the remaining teams would vanish.

It would be also interesting to see how teams would deal with things like the Subway Series and Top Prospects Game.

 

[superdeluxe]

I suspect so. At the very least, a lot of teams would fold and the perks the players now get from the remaining teams would vanish.

It would be also interesting to see how teams would deal with things like the Subway Series and Top Prospects Game.

I think it would be devastating for the 4 Washington Teams, quite honestly.

 

[CharlieGirl]

I think it would be devastating for the 4 Washington Teams, quite honestly.

I would guess that over half the OHL teams would fold as well, and I would guess that number would be higher in the Q.

At the end of the day, if that's how it plays out, no one wins except the lawyers.

 

[TaketheCannoli]

I'd like to know where they're getting that figure, because I'd be shocked if any team even hits the $10-million mark. Here are the top drawing teams from each of the three leagues, by combined (regular season + playoff) attendance:

WHL - Calgary Hitmen - 319,582
OHL - London Knights - 342,342
QMJHL - Quebec Remparts - 357,743

Playoffs were a relative non-factor for all three as London played just four home playoffs games, Calgary three, and Quebec two. So a reasonable maximum for ticket income would be to take the top ticket price (single game adult) and multiply it by total attendance. That gives us:

WHL - Calgary Hitmen - 319,582 x $26.00 = $8,309,132
OHL - London Knights - 342,342 x $19.75 = $6,761,254
QMJHL - Quebec Remparts - 357,743 x $15 = $5,366,145

I think you'd be hard pressed to find a team with a higher max ticket price than Calgary. Realistically, you're looking at a ceiling of $9-million in ticket revenue per season. I'm interested to see where the other $91-million comes from...

I interpreted it to mean hundreds of millions in total. This action is against the CHL, not one team.

It is interesting to see the education debate come around yet again. Milt Dunnell wrote about the flaws in this system in the 1940s. Don Townson wrote a series titled "Hockey's Child-Stealers" about this in the Toronto Star in 1962. Ken Campbell wrote a piece about 10 years ago on the very same topic.

 

[Brainiac]

It was about time. It's ridiculous how the players are treated unfairly in these "development" leagues.

I think a similar story is going on with the NCAA.

These guys should be paid.

 

[CharlieGirl]

I interpreted it to mean hundreds of millions in total. This action is against the CHL, not one team.

"Hundreds of millions" in total would mean that each team in the CHL ends in an average profit of over $3 million each year at the very low end of the calculation. That's complete and total nonsense.

It is interesting to see the education debate come around yet again. Milt Dunnell wrote about the flaws in this system in the 1940s. Don Townson wrote a series titled "Hockey's Child-Stealers" about this in the Toronto Star in 1962. Ken Campbell wrote a piece about 10 years ago on the very same topic.

The CHL has improved the education system multiple times, including this past summer. Is it perfect? No. Is it the worst thing out there? No.

 

[CharlieGirl]

These guys should be paid.

Should they also get free everything while they're playing, as well as a fully paid education after they're done playing too?

 

[Fugu]

Who is he to speak for the players?
MOD

A lot of players are happy to get the opportunity to play the game, ride the bus, get exposure to scouts, and get an education or pro contract at the end of it.

A lot of CHL teams would be in serious financial trouble if they had to pay players. It'll probably hurt more people than it will help.

It's a class action suit, which means any player who qualifies would share in the reward. I don't think it means individuals cannot file their own suits, but if could get swept up into the class action if all the conditions are similar. Need a legal person to clarify though, especially wrt Canadian law.

What I find interesting in this case; is that the entire defence for the league rests on the argument towards them being student-athletes; and therefore exempt from the players being considered employees.

Should that argument fall, there's basically no debate over how much trouble the CHL is in. They have been acting as a cartel to restrict player wages and freedom of labour, they have been paying well below minimum wage.

So the question is, what defines a student-athlete and therefore exempts these players? Is it "playing for" a non-profit institution (such as a University)?

If you're in the US as a "student athlete" there is a specific visa that you get - I'm willing to bet none of the non-US players on the American teams are there on an F1 visa.

I'd be interested to know what permits the players are in Canada/US on (not incl. the players playing in their home country). It would be very telling.

It was mentioned in a previous thread, but the players going to the US indeed are not going in on student visas.

@sean. Student-athletes at US colleges are subject to employment and tax laws if they get any other job. Their student-athlete status simply refers to their relationship with the universities and NCAA.

These teams seem to be relying on that definition as something the kids are doing otherwise (going to school) while playing, but not their legal status with the team itself.

 

[superdeluxe]

It was about time. It's ridiculous how the players are treated unfairly in these "development" leagues.

I think a similar story is going on with the NCAA.

These guys should be paid.

Major difference, NCAA Football generates billions of dollars annually. Financially, you could consider NCAA Football a professional league.

 

[TaketheCannoli]

"Hundreds of millions" in total would mean that each team in the CHL ends in an average profit of over $3 million each year at the very low end of the calculation. That's complete and total nonsense.



The CHL has improved the education system multiple times, including this past summer. Is it perfect? No. Is it the worst thing out there? No.

The claim as I read it is

The league’s teams are “unjustly enriched” with “hundreds of millions of dollars in revenues annually” based on the services provided by their young players, the claim alleges.

That means top line revenues or total dollars taken in, not profits.
Have they eliminated the minimum GPA while playing and pro contract disqualification rules?