Photo by Samantha Gades on Unsplash
It goes without saying how much COVID-19 has impacted the world of sports. It is now October and it hasn’t been a week since the Tampa Bay Lightning bested the Dallas Stars, winning their second Stanley Cup in franchise history in Edmonton, Alberta of all places. Beyond rescheduling and reformatting the playoffs, the NHL was forced to delay some of the most important dates of the offseason: the first round of the 2020 NHL Entry Draft was held virtually on October 6th and rounds 2-7 will wrap up the following day. The free agency window opened October 9th at noon.
But one of the lesser talked about offseason processes is salary arbitration. Considering very few players elect to have an arbitrator decide their salary, and even fewer end up reaching their arbitration hearing, this process can seem confusing and borderline unnecessary to casual and diehard fans alike. With this in mind, I think it’s important to understand how salary arbitration works and how powerful of a tool it can be for both parties involved. By taking a closer look at who is eligible for salary arbitration, how and by whom is arbitration elected and what the process is like, I hope to shed some light on this often mystifying process.
Who is eligible?
First, a player must be a Group 2 Restricted Free Agent (RFA) to be eligible for salary arbitration. As set out in Article 10.2 of the NHL’s Collective Bargaining Agreement (CBA), this designation depends on the first Standard Player’s Contract (SPC) signing age and the corresponding number of years of professional experience. 18-21 year-olds require three years of professional experience, 22-23 year-olds require two years, and 24 year-olds and older require just one year. Upon the completion of their first SPC and provided they have accrued the required years of professional experience, a player will be designated as an RFA.
Moreover, Article 12 of the CBA stipulates that a player’s eligibility for salary arbitration depends on an additional set of factors: their first SPC signing age and the number of years of professional experience. In other words, a player can be an RFA pursuant to the RFA rules above, yet be ineligible for arbitration. For RFAs, 18-20 year-olds signing their first SPC require a minimum of 4 years professional experience, 21 year-olds require three years, 22-23 year-olds require two years and 24 year-olds and older require one year.
It is important to note that 18- or 19-year-old players accrue a year of professional experience by playing ten or more NHL games in a given season. For players 20 and older, they earn a year of professional experience playing ten or more professional games in a given season. The difference is that the latter includes games played in the American Hockey League, Europe, etc.
How and by whom is arbitration elected?
Salary arbitration can be club-elected or player-elected. The first club-elected salary arbitration deadline was at 5:00pm on October 4th and the deadline for player-elected salary arbitration was at 5:00pm on October 10th.
Club-elected salary arbitrations are coupled with extra considerations which are beyond the scope of this article, but a few aspects are noteworthy. For instance, an arbitrator cannot award a player less than 85% of their earnings from the previous season. Additionally, a player cannot be subject to a club-elected salary arbitration more than once in their career, regardless of whether the hearing ends up taking place.
This year, salary arbitration hearings will run for 20 days from October 20th until November 8th.
What’s the process like?
No less than 48 hours prior to a hearing, the parties must email their briefs to their respective arbitrator. Each brief is limited to 42 double-spaced pages in Times New Roman font. Once the hearing begins, no arbitration matter can be settled outside the arbitration process. The player and the club shall each have 90 minutes to present and argue its case, with time remaining for a rebuttal and closing argument.
Article 12.9(g) sets out the evidence parties can present at the hearing. Such evidence includes the overall performance of a player in previous seasons, overall contribution of the player to the success or failure of their team, any special qualities of leadership, etc. Additionally, solid, comparable players are crucial pieces of evidence for both parties involved. Properly defined comparable players can strengthen one’s argument to achieve the desired term and salary when compared to a similarly productive player.
Unsurprisingly, statistics remain a massive piece of evidence for both the club and player when arguing their case. Although there are huge repositories of statistical data available both publicly and privately, only those statistics kept and maintained by the league can be presented.
There is also, however, inadmissible evidence not to be considered by the salary arbitrator. This is evidence like testimonials, the financial condition of the club, any prior offers between the club and the player, etc.
Once the sides have presented their arguments, the arbitrator has 48 hours to issue a decision. In their written reasons, the arbitrator reveals the term and salary of the award. This decision is final and binding. The parties have the option of signing the contract according to the arbitrator’s terms or the parties can opt not to sign. Provided the arbitrator’s decision meets a monetary threshold, the player then becomes an Unrestricted Free Agent (UFA), free to negotiate and potentially sign with any other club.
For whatever reason, the salary arbitration process is one not widely reported. Nevertheless, the process is crucially important and helps both teams and players achieve a fair, unbiased result to salary disputes. Given the complexity and uncertainty of today, it will be interesting to see what players and clubs will elect for salary arbitration. I wouldn’t be surprised to see some players filing for salary arbitration this year, especially Ryan Strome of the New York Rangers, Ryan Pulock of the New York Islanders and Dominik Kubalik of the Chicago Blackhawks. In uncertain times, players and clubs alike can act unpredictably, making for potentially fascinating salary arbitration scenarios.
Written by Cristian Delfino, a student at Osgoode Hall Law School. This post originally appeared in Obiter Dicta.