Wednesday, September 15, 2010

Eric Belanger's Capital Contract: Why He’s Out Of Luck

As reported by James Mirtle of the Globe and Mail, Eric Belanger’s agent, Joe Tacopina, a high profile New York defence lawyer and new player agent, is threatening legal action after he says the Washington Capitals backed out of an agreement they made to sign Belanger to a 1 year/$1.85 million dollar contract.

No contract was ever signed.

While the Caps and Belanger didn’t have a written or verbal contract, Tacopina is alleging that they had an agreement and that the Caps should honour that agreement. Caps GM George McPhee told Tacopina the deal would be made official once a trade was completed. That never happened, and 5 weeks after Tacopina alleged the parties agreed to a deal, Belanger was told to look elsewhere for employment.

Tacopina argues that the Caps acted like the parties had a deal. They helped Belanger with his move to Washington by scheduling a move. The Caps also set Belanger up with a real estate broker, which resulted in a lease being signed, sent the player a pre-training camp manual and a schedule, and coach Bruce Boudreau called Belanger and told him he was excited to have him on the training camp roster. All this supports the position that there was an agreement in place.

Once problem though – the NHL CBA says there is no contract.

Article 11.3 of the CBA provides that a contract is only enforceable if it’s registered and approved by the NHL:
no SPC [player contract] shall be valid or enforceable in any manner whatsoever unless and until it has been filed with Central Registry and approved by the League
Unfortunately for Tacopina and Belanger, there isn’t any grey here. It’s pretty black and white: no contract unless it’s registered and approved by the NHL.

Now what about the lease, moving expenses, Boudreau’s call, etc.? Shouldn’t that count for something.

Generally speaking – yes. It is a basic legal principle that even if there is no written or verbal contract between the parties, you can still imply a contract by relying on the actions and conduct of the parties. Basically, if the parties act like there’s an agreement, then maybe there is one.

This is called an implied contract at law.

Given the facts of this case, there would be a pretty good argument that there was an implied contract in place. The parties acted like there was a deal.

One problem though – the CBA rules the day. The CBA says you don’t have a contract unless it’s registered and approved by the NHL. Whatever legal principles may apply outside the CBA, including the law of implied contracts, they don’t apply in the CBA. The CBA has its own rules, and judges will defer to the CBA.

So it looks like Belanger is out of luck. Even if Belanger could sue the Caps successfully (which he likely can’t because there is no contract to begin with as per the CBA), he couldn’t force the Caps to sign him. If he sued and won, he would get money and not an NHL contract.

Maybe the Caps could have handled this whole situation a bit better. However, in keeping with the letter of the law under the CBA, there was never a contract. Unfortunately, if Belanger is disappointed, he may want to look to his agent for answers.


Gerald said...

Succinctly and accurately stated, Eric. This is black-letter labour law.

Eric Macramalla said...

Thanks for your feedback Gerald. Don't think Belanger will sue Tacopina although looks like an option. Tacopina got taken for a ride.

Captain Guyliner said...

Does the CBA also oust his claim for damages for innocent or negligent misrepresentation?

In this instance, the Caps allegedly acted in a manner that caused Belanger to sell his home, move his kids and refrain from offering his services to the market resulting in arguable damages of $1M+.

It appears Belanger reasonably relied on Washington's representations both in written form and in the actual conduct of the organization. While I realize the application of the CBA defeats any claim in contract, would it also operate to defeat Belanger's right to sue in tort?

Eric Macramalla said...

Under the CBA, a party must file a grievance before going to court (the grievance would fail as there is no contract). In theory, yes, Tacopina could take the case to court. However, a judge would take one look at the rules that govern these types of negotiations (namely 11.3) and say you have no case. NHL teams likely do this kind of thing a lot - suggest a promise. For that reason, 11.3 has been drafted to address that. Labor law will be the starting point, and if a tortious claim is brought, the court would look to the CBA and then look to Tacopina and say sounds like your boy jumped the gun. Then he may turn to Belanger and suggest he sue Tacoipina for negligence.

Eric Macramalla said...

...and I would add if Tacopina went straight away to court without first filing a grievance, it's likely the court would throw the case out as Tacopina didn't go the prescribed route.

Appreciate your question Captain.

Daniel Gilbeau said...

Thank you for the information Eric. Belanger should be able to sue for pain and suffering of his family. They were brought to Washington and enrolled in new schools only to find out they need to move elsewhere because there is no contract. I agree that he cannot sue to make the Capitals give him a contract but there is some pain and suffering with expectations of a contract which the Capitals were suggesting.
The only thing that Belanger can smile about is the way the Capitals look to all other players with how they handled this situation.

Eric Macramalla said...

Dan very good points (you sound like a lawyer). As for the Caps getting a reputation, a lot of teams operate this way and I don't think it's exclusive to the Caps. Tacopinata made a rookie mistake and now Belanger - who doesn't know better - is paying dearly. Tacopinata risks decertification from NHLPA if tries to sue and risk being sued for negligence by Belanger.

Captain Guyliner said...

I just took a look through 11.3 and it states: "no SPC shall be valid or enforceable in any manner".

In the event Belanger were to sue in tort, he wouldn't be suing to enforce an SPC. Wouldn't he be seeking to enforce his civil right to obtain damages for the Caps' misrepresentation?

Granted I'm not a labour lawyer (nor a U.S. lawyer!) and perhaps there is a privative clause elsewhere in the CBA/SPC, but I don't read 11.3 as ousting Belanger's right to sue in tort.

Great blog by the way.

Eric Macramalla said...

Good question Captain. Belanger can sue - that right has not been stripped away by the CBA. However, practically speaking the CBA has so severely undermined his chances of success to the point that a lawsuit suit is unlikely. A judge would look to the CBA and see that it defines when a contract arises and will defer to the CBA. As well, because he would be suing on the contract, he must first file a grievance as per the CBA. If he doesn't a judge wouldn't be happy because the process hasn't been respected. Labour law can be a pretty strong hammer.