I suspect many of you have heard at least some rumblings of the civil suit involving the WHL, OHL and CHL that was in court last week in Calgary where nearly 400 former players are looking to certify the suit as a class action suit that seeks to pay players minimum wage among other benefits associated with being employees rather than amateur student-athletes.
The last time I referenced the ongoing lawsuit on the blog was back in December (it’s at the bottom of the post) and I touched on it briefly with Andy Eide on our “ThunderTips” podcast. I haven’t written anything about it this week because I wanted to make sure I had a solid grasp on all many facets of the suit before I posted anything. I have no background in the labor laws that govern teams in five states and at least five provinces (so far the QMJHL isn’t part of the suit) in two different countries. Suffice to say I’m certainly no expert, so what I’ll try to do here is summarize what’s happened so far and link to as many different sources as I can for your perusal.
First, some background: you might recall that Washington state in 2015 determined that CHL players competing for the four Washington teams were, in fact, amateur student-athletes and therefore not subject to minimum wage laws. Then last February the British Columbia government somewhat covertly did the same thing that you can also read about here. This is all due to a lawsuit originally filed in Calgary and Toronto back in October of 2014.
At the end of October 2016, a judge in Calgary ordered the WHL, OHL and CHL to hand over their books and financial records to determine if any or all of the teams are profitable. Remember, the CHL has balked at paying minimum wage saying it would bankrupt a number of smaller-market franchises.
In January the first analysis of the teams’ financial records by KMPG indicated that less than half the WHL/OHL teams operated at a profit and that only a handful of teams turned a significant profit. More importantly, the team names were not specified leaving speculation as to which teams were actually profitable.
However, during last week’s certification hearing the judge ordered the financial statements and tax returns unsealed in addition to a player development contract between the NHL and WHL. Lawyers for the players then were allowed to hand out two reports that differed from KPMG, as Rick Westhead of TSN reported. (Be sure to read Westhead’s story. He’s been the best source I’ve found so far on this issue).
There are now some questions about various fees paid to team employees (not the players) and how teams that are consistently shown to operate at a loss still sell for millions of dollars. Meanwhile, over at Sportsnet Gare Joyce had this analysis piece in which he references a lengthy enterprise story he wrote several weeks ago about this situation.
Finally, colleague Brandon Rivers of Dub Network posted this Q&A with the parent of a WHL player offering a different perspective. It’s anonymous, but still worth a read.
So there you have it. I posted a lot of links with a lot to read through, but hopefully this should give you a pretty good idea of what’s going on. If the court allows the class action and ultimately sides with the players it could mean a major shift in Canadian junior hockey. As I said at the beginning I’m certainly no expert so feel free to email me or tweet at me if you feel like I missed something important. I’ll be continuing to closely monitor developments in this case and posting when appropriate.
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