The unfolding of the COVID-19 pandemic has made 2020 a year to forget for businesses and industries alike. One of the hardest hit by the pandemic seems to be the live sports and entertainment industry. Many professional sports leagues have been postponed or cancelled, and only those with healthy financial resources or lucrative TV broadcasting contracts have survived. For smaller corporations such as the Canadian Hockey League (CHL), the pandemic has all but put an end to the prospect of playing. Furthermore, as if the pandemic was not bad enough, the CHL faces several ongoing class-action lawsuits entering 2021.
By way of background, the CHL represents the highest level of junior hockey in Canada and is regarded as the top developmental league for players under 21 in the world. The CHL is an umbrella organization composed of sixty teams in three participating leagues: the Ontario Hockey League (OHL), the Western Hockey League (WHL), and the Quebec Major Junior Hockey League (QMJHL). These three leagues combine to churn out many of the NHL superstars watched and idolized by young boys and girls around the globe today. For many Canadian kids, the dream of playing professional hockey is synonymous with playing in the CHL. Playing for any CHL team is a golden opportunity, a stepping stone to fulfilling a childhood dream of playing in the NHL one day. For many, however, it is also where that NHL dream comes to die.
The CHL’s legal troubles began in 2014 when it and its three leagues (OHL, WHL, QMJHL) became the named defendants in three class-action lawsuits filed in Ontario, Alberta, and Quebec, spearheaded by disgruntled ex-players whose NHL dreams had evaporated. Class members included in the action consisted of players who played in the CHL between 2012 and 2018. The lawsuit principally accused the CHL of failing to pay appropriate wages and other standard employment benefits per provincial employment standards legislation. Concerns were raised as players were paid as little as $35 per week for 35 to 65 hours of their time. In response, the league contended that the players were amateur student-athletes and, by definition, should not be considered employees as per the applicable employment legislation. The CHL also asserted that it compensates by way of an education package that typically provides one year of tuition payments at a recognized Canadian University for each season played.
I have been fortunate to play three seasons in the OHL before beginning my post-secondary education. This experience has allowed me to empathize with the player’s allegations made against the CHL and appreciate the league’s perspective as well. However, these feelings and allegations certainly do not represent the sentiment of the entire cohort of ex-players. Many of my peers who have played in the CHL seem to be divided on whether to endorse or oppose these lawsuits. On the one side, there is a consensus that indeed, the CHL exploited the dreams of players to line their own pockets and, in doing so, failed to legally remunerate players for their services. Generally, this group feels cheated out of the opportunity to play in the NHL and believes they have little to show for their time and energy invested in the CHL. However, on the flip side, some feel that the free meals, free equipment, scholarship funds, not to mention the unique life experience and connections afforded by the opportunity to play in the CHL, have been more than enough compensation. For this cohort, many seem adamant that choosing to play in the CHL was the next step in following their dreams – it was never considered work or employment. Additionally, it appears to be commonly accepted that the education packages were more than enough as a fallback plan if the dream of playing professional hockey dwindled.
In May of 2020, after six years of litigation, a lucrative $30 million settlement was agreed upon, recompensating a class of 4,286 players. While the 30-million-dollar settlement agreement was before the court for final approval, two class members came forward and objected to the deal. These objections took place with regards to the “Release Matters” provision of the settlement, which barred “any and all actions, causes of action, suits, debts, claims (including any additional claims by the representative plaintiffs) and demands, howsoever arising…whether known or unknown or by reason of any cause, matter or thing whatsoever.” In other words, this provision of the settlement explicitly foreclosed class members from suing the CHL in other causes of action. The Ontario, Alberta and Quebec courts declined to approve the proposed agreement for the time being as they found that the scope of the “Release” was overbroad and not in the best interests of the class members.
It appears the word of a remunerative settlement agreement spread like wildfire in the hockey community, and other players have a bone to pick with the league. Within a few months, the CHL was threatened by two new – yet very different – evolving class-action lawsuits. The first has been commenced by the class members who came forward to object to the original settlement agreement. Together, they have claimed $825 million in damages and are awaiting class certification. The plaintiffs are alleging a conspiracy between the CHL and numerous professional leagues such as the NHL, AHL and ECHL in violation of the Competition Act. The chief complaint in this potential lawsuit is that the CHL regulations explicitly prohibit players from playing in other professional leagues before the age of 20, which they construe as being non-compliant under the Competition Act. The second potential class-action lawsuit targeting the CHL was proposed by various other ex-players. This cohort alleges physical and mental abuse, mainly hazing between players, seeking damages for negligence, breach of fiduciary duty, and breach of contract, holding that the leagues are vicariously liable. Both claims are still awaiting class certification.
Irrespective of these new potential class actions, if an agreement on new “Release” terms cannot be reached, the lawsuit will resume at the trial stage or motion for summary judgment. In the meantime, the hockey community anxiously awaits a final decision that could permanently change the face of how junior hockey leagues operate in Canada.
Written by William Brown. William is in his first year at Osgoode Hall Law School, and acts as a 1L rep for Osgoode’s Entertainment and Sports Law Association.