The CHL class action lawsuit

By Zaid Noorsumar

On the evening of November 15, the Ontario government announced that it would side with the OHL on the issue of player pay. The OHL was quick to issue its own press release thanking the government for their stance. The government will move to exempt OHL players from the Employment Standards Act. However, the facts of the class action lawsuit should be known in order to help build public support for junior hockey players across the country.

The players’ case

According to his legal affidavit, Samuel Berg regularly worked over 40 hours a week. His time at the Ontario Hockey League was spent on practicing, playing games, video analysis, promotional activities and traveling with the team.

But Berg was classified as an “independent contractor” and not an employee of the league, and was therefore paid a weekly allowance of $50. He played in the league for two months for the Niagara IceDogs, before quitting the team due to a career-threatening shoulder injury.

Berg is the principal plaintiff in a class-action lawsuit against the OHL, which was filed in 2014. An Ontario judge certified the case in 2017.

The suit alleges that the league misclassifies players by precluding them from employee status and hence denying them wages and adequate working conditions. The league considers its players to be “student athletes.”

The lawsuit seeks $180 million in retroactive pay (including vacation pay and overtime) and punitive damages with employee status for current players. A similar case is ongoing in Alberta against the Western Hockey League, while the judiciary in Quebec will decide next month whether to proceed with the case.

Both OHL and WHL are part of the umbrella Canadian Hockey League, which is associated with NHL. CHL players are aged between 16 and 20 and are groomed to ultimately play at NHL, though few are able to accomplish that goal.

The issue heated up this week when the OHL commissioner wrote an open letter to the Ford government, asking for players to be exempted the players from the Employment Standards Act. The Minister for Tourism, Culture and Sports immediately released a statement backing the league.

Joshua Mandryk, one of the attorneys for the players, responded with an open letter addressed to the government, explaining the plaintiffs’ side of the story.

Workers v. amateurs

While the CHL and its affiliates present the picture of an amateur league, they are ultimately in the business of entertainment, which is derived through the labour of the players. Without players, there would be no league.

Mandryk, the plaintiffs’ lawyer, harbours no doubt as to whether the players are workers and castigates the league for using financial constraints as an excuse to avoid paying wages.

“Paying your workers is the cost of your business. If there was a new restaurant, they couldn’t say, ‘Well we are just starting up so we can’t pay our workers,’” he says.

Playing in the OHL is a full-time job for the players and they deserve adequate pay and the legal protections that are accorded to other workers in the province, Mandryk says.

He cites the plethora of revenue sources for the league including ticket sales, broadcasting rights, sponsors, advertising and memorabilia that suggest the players are being left out of the financial bonanza.

CHL players are even featured on an EA sports video game – with players receiving no royalties for the use of their graphic depictions or images.

Financial health of the league

The league has said that not all clubs make a profit, particularly those in smaller towns. But Mandryk says that sports league often stay viable through revenue-sharing models, arguing that the bigger and smaller teams are mutually co-dependent.

“They allege that financially they can’t. We reject that premise. We believe that they can and in any event if there are challenges there are solutions,” says Mandryk.

The league’s contention that many of the clubs operate a loss seems accurate, going by the financial statements that the clubs were compelled to reveal by a Calgary court in 2017.

But as TSN and Scott Wheeler have reported, the financial records prompt many questions as the claims in their statements are hard to verify. Many of the clubs’ accounts are vague. In the case of Samuel Berg’s former team, the Niagara IceDogs, the absence of a salary breakdown makes it impossible to know how much the owners are actually getting paid.

And then there are questionable expenses. While the owner of the IceDogs said in 2014 that her team about has incurred losses, TSN’s Rick Westhead reported that its financial accounts reveal the team leases four BMWs.

The IceDogs’ fiscal health has also significantly improved in recent years. As TSN reported:

“The documents show that in the fiscal year ending May 31, 2014, the IceDogs generated $2.8 million in revenue, resulting in a loss of $103,093.

Months later, the team left the 3,100-seat Jack Gatecliff Arena and moved into a new home rink, the 5,300-seat Meridian Centre in St. Catharines. That move led to a 50 per cent increase in revenue, from $2.8 million in 2014 to $4.2 million in 2015 and a profit of $438,679.

The IceDogs’ revenue climbed to $4.6 million in 2016, generating a profit of $643,544, even after paying $182,221 toward player education scholarships.”

And then there is the lucrative partnership between CHL and NHL. The two signed a seven-year deal worth nearly $80 million that runs through to 2020. Significantly, the league makes a substantial profit directly off the success of its players.

As Wheeler reported, each CHL team is paid up to $60,000 for each player that is signed to an NHL contract and $75,000 for each goalie who agrees to an entry-level contract. CHL teams receive an additional $17,000 per player and $20,000 per goalie if they consent to any junior player 18 years or older being made available to his NHL club. If a CHL graduate plays in the NHL at 18 and 19, his team can profit off of him as much as $145,000 for a player and $175,000 for a goalie.

Compensating the players

The CHL says that its players receive post-secondary scholarships, resources and funds for education, free equipment and a chance to develop professionally to realize their ultimate dream of playing NHL. Other benefits include being billeted with a local family during the season where meals are provided.

But as Bob McKeown said to CHC commissioner David Branch in a 2014 CBC interview, some of these are costs of doing business.

“Lots of companies provide benefits like that to their employees but it doesn’t change the fact that they are employees,” says Mandryk, citing the talk of scholarship funds as a diversionary tactic.

“I think that McDonald’s provides some educational benefits to its employees, it doesn’t mean that they don’t have to pay them minimum wage.”

He says that in any case the eligibility criteria for educational scholarships disqualifies the majority of the players. The years of service in CHL are commensurate to the years of funding allocated for post-secondary education, meaning that players who are dropped by their team after a season or two don’t necessarily receive full funding.

The 18-month window to apply for scholarship after leaving CHL also creates a problem. Hence, some are forced to choose between pursuing a career in hockey by playing another league or opting for the scholarship.

Working conditions

Samuel Berg’s affidavit notes that him and his always considered themselves to be professionals. He says that players are obligated to be at their best, which means practicing hard, adhering to team rules including a 10:30pm curfew, maintaining fitness, attending training sessions and being ready for games whenever required.

Other obligations include appearing at promotional events and being a good brand ambassador for the club, which according to Berg can be for hours at a time.

Berg’s affidavit points out that players have a non-game day commitment of four to five hours, including travel between the practice and workout locations. On game days, players not enrolled in school would show up for an hour of morning skating before showing up for the game again at 5pm and leaving around 11:30pm.

Additional participation in promotional work for their clubs and extensive travelling to play away games can mean 40 to 65 hour weeks. The affidavit of Lukas Walters, who played in WHL, makes similar claims.

Interestingly, when the CHL commissioner was questioned by CBC about the alleged working hours, he remarked that he had “never done an analysis of that.”

Berg wrote that his hectic schedule left him unable to focus on his school work.

“Even with a limited course load, I realized I was on track to fail one of my courses before I left the IceDogs, because I found that I had so little time to do homework or study for tests,” he said.

“When I and the other players were in class, we would routinely be tired, and therefore inattentive, because of our demanding schedules for the IceDogs.”

Berg alleges that the threat of being benched or demoted to a junior team constantly dangles over players’ heads, which keeps them from voicing out grievances.

“This is a major concern for players because a trade could mean moving to a team several provinces away or even in a different country,” Berg wrote.

“The player’s new team could be at the bottom of its division with little chance of being noticed by the NHL. If a player refuses to report to his new team but the OHL club does not him put him on waivers, then his only other option is to go home.”