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NHL challenging the NHLPA over legal contracts is nothing new

Aug 1, 2010, 10:51 AM EDT

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kovalchuklouvanderbeek.jpgBelieve it or not, there’s actually some history with the NHL and the NHLPA when it comes to bickering over the legality of contracts. I know, this is really mind-bending news to get on a Sunday morning but it’s true and the New York Post’s Larry Brooks is once again spending his Sunday skewering the NHL over their decision to challenge Ilya Kovalchuk’s 17-year, $102 million contract with the New Jersey Devils.

This time, he has another fascinating read telling us about how the NHL challenged the contracts of Rob Blake, Joe Sakic and Pierre Turgeon in 2003. The contracts then were sent to arbitration because they were trying to pay those players during the eventual labor stoppage in 2004-2005 through signing bonuses. Much like with the Ilya Kovalchuk case, there are some very obvious similarities.

Signing bonuses were legal under the old CBA just as long-term, front-loaded contracts are legal under this CBA. Indeed, the league routinely registered contracts containing signing bonuses without protest, just as the league routinely has registered long-term, front-loaded contracts.

Suddenly, though, the NHL had problems with the Sakic, Blake and Turgeon contracts. The testimony given by Bill Daly, then the league’s senior VP and now its deputy commissioner, under questioning from arbitrator Joan Parker, is instructive and on point as it relates to the Kovalchuk issue.

Parker asked Daly what standard the league applied to determine whether a signing bonus would be considered illegal.

“The standard is . . . we have an internal discussion about it, that there’s an intent on behalf of the contracting parties to guarantee a part of the contract. And the standard we have been applying is a significant part of the contract for a potential [2004-05] work stoppage,” Daly said.

“It’s a materiality test. . . . There are a number of different [contract/signing bonus] structures we’ve seen. When it’s generally reasonable we have registered contracts in that scenario. When it’s clear on its face that the parties were expressly attempting to essentially guarantee part of the contract during a work stoppage, at least in our mind, we have rejected the contracts.”

What this boils down to is that the teams and the players are more than well aware of what the current situations are and were in these cases, it’s just that there’s nothing in the collective bargaining agreement there to stop anyone from doing anything about it. As arbitrator Joan Parker noted in 2003:

“The difficulty Daly had in articulating the standard by which the League challenged the Blake, Sakic and Turgeon [contracts] is troublesome, particularly because several provisions of the Collective Bargaining Agreement suggest that Clubs and players have substantial flexibility to negotiate compensation packages as they wish.”

How did the league fare in their squabble with Blake, Sakic and Turgeon? Brooks tells us and then hits it out of the park.

Joan Parker ruled for the NHLPA and against the NHL in the case of Sakic, et al, rebuking the league for attempting to gain collective bargaining goals through arbitration.

Seven years later, the league has reapplied its beautiful-mind litmus test to front-loaded contracts, trying to win something now it could not win last time in collective bargaining.

The standard is simple. If Bettman doesn’t like it, the league tries to stop it. Only the arbitrator has the power to stop Bettman.

A bit dramatic, yes, but it’s important to note how strong the arbitrators role in this whole mess with Kovalchuk actually is. A decision in favor of the NHL would set a dangerous precedent because it would essentially be putting a previously unknown qualifier in the current collective bargaining agreement and essentially set the table perfectly for a monstrous labor battle in 2012. Things should prove to be interesting as the Kovalchuk contract hearing is slated to begin this week.

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