NHL is being accused of working together unfairly in a legal case involving junior hockey.
In a new court case, a group of hockey players and their unions are suing the NHL and four other hockey leagues. They say the leagues worked together to not pay young players as much money as they could have gotten in a fair market.
Hockey players Tanner Gould and Isaiah DiLaura, along with the World Association of Ice Hockey Players Unions, say that the NHL, CHL, WHL, OHL and QMJHL are working together to keep the salaries of major junior players low, even though the leagues make a lot of money.
The people suing want their case to be approved as a class action for all players who have played major junior hockey between February 14, 2020, and whenever the case is finished. The judge in charge will decide if the case can be a class action during the lawsuit. As of now, we don’t know who the judge will be.
A 106-page legal claim was filed in New York accusing the defendants of unfair competition by dividing up markets. The WHL, OHL and QMJHL are all rivals. However, according to the people suing, they joined together through the CHL to stop themselves and their teams from competing for players and business opportunities. For instance, the three leagues all agree that OHL teams can be the only ones to find and hire players from 24 American states. States and Ontario. States and a province called Ontario. If different sports leagues wanted these players, they would get paid more, that’s the idea.
Player pay is also focused on. The people who are suing say that the junior players are paid less than they should be because the defendants are fixing the prices. The complaint says that WHL players get $250 every month, while OHL players get $470 every month. In comparison, AHL players make over $5,000 a month on average, while ECHL players make over $2,800 a month on average.
Another topic in the complaint is that the players and the union were not involved in making the economic rules. The major junior leagues are said to be working together to make rules that force 16-year-old North American players to join a specific team based on where they live. Young players drafted at age 14 or 15 have to accept the deal because they can’t play in the AHL or ECHL until they are 18.
The draft picks are not included in an agreement with the young players in junior leagues. The people who are suing say that the way the players in AHL and ECHL are treated is different. These players have a labor union that talks about their working hours, pay, and other working conditions. Not being able to negotiate together as a group is a big deal because the agreements made between sports leagues and player unions are usually not checked for breaking antitrust laws. Unnegotiated rules can be checked for unfair competition.
In addition, the complaint explains how the defendants make a lot of money under the current system. NHL TV shows major junior hockey games and the leagues get millions of dollars each year from the NHL. The complaint says the NHL benefits from a system that controls the cost of developing players.
Even though the NCAA is not being accused, its rules are still being talked about. The players cannot play in the NCAA because they are considered professional athletes. The complaint also says that if the NCAA starts paying players and treating them like professionals, it could affect whether major junior players are allowed to play in college.
The people on trial are being accused of breaking a law called the Sherman Antitrust Act, Section 1. Section 1 claims that some businesses are working together to break the law and stop others from competing. The hockey leagues are being accused of limiting fair competition by only allowing teams to operate in certain areas, making players join teams without their choice, and making young players play for a set amount of money and benefits. The complaint also says that the players are not paid for giving up their NIL rights.
The people suing want money for the bad things they say happened to them. Successful antitrust cases can make the damages three times bigger. For example, $100 million in damages can become $300 million. The people suing want the court to make the hockey leagues change their financial rules.
As we have seen many times in sports, legal battles about competition laws can go on for a long time. Ed O’Bannon and Shawne Alston both took more than seven years to finish their antitrust lawsuits against the NCAA.
The NCAA is being accused of unfairly controlling how much college athletes can be paid, similar to the way the hockey league is being accused in court. The case is called Johnson v. College athletes can now make money from their name, image, and likeness. Ohio is involved in the legal case about this. NCAA, Tennessee and Virginia are going to court. NCAA, Carter vs. NCAA and a case called Hubbard v. Two colleges, Dartmouth and USC, are being accused of treating their players as employees by the National Labor Relations Board (NLRB).
It’s important to remember that a complaint only tells one side of the story and legal arguments. The lawyers for the people suing in the case, including Jeffrey Shinder and Ethan Litwin from Constantine Cannon LLP, are not neutral. They are on the side of the people they are representing.
The hockey league defendants will respond to the complaint, say the accusations are not true, and ask for the case to be thrown out. The leagues will keep their legal system running well. Without coordination, some leagues might have trouble and there may be fewer hockey player spots.
