I had the over
under on mediation at 3 days. Lasted just 2.
Now we
hear that Donald Fehr has agreed to a player/owner meeting with conditions.
Will it work? What’s next? Should I consider starting a cricket pool?
Mediation Fails
It was
unfortunately not a surprise to see mediation between the NHL and NHLPA fail.
Sport league disputes that involve billions of dollars very simply do not have
a profile for settlement at mediation.
We need
only look to the recent past for evidence. In 2011, both the NFL and NBA were
locked out, both turned to mediation and both to the very skilled and respected
George Cohen and his federal agency, the Federal Mediation and Conciliation
Service. However, in both cases, Cohen was unable to bridge the divide.
Since
those mediations failed, and others as well (the NHL in 2005), it was not
reasonable to expect that the NHL mediation was going to meet with success.
Both Gary
Bettman and Donald Fehr are bright and intimately familiar with the key issues
at play. It was unlikely that mediation was going offer up an epiphany or give
the sides an Oprah-Aha moment that would lead to a deal in principle. It was
more likely to give rise to moments punctuated with statement like “I don’t
agree”, “I don’t think so” and “Hey, that was my muffin”.
Why Don’t the Sides Go To Arbitration?
Unlike
mediation, where mediators just try to facilitate settlement, an arbitrator (of
which I am one) renders a binding decision. Absent an appeal, the sides must
follow the ruling of the arbitrator.
Wrestling
over billions of dollars and complex contract issues, leagues are simply uncomfortable
with arbitration. The last thing they want – and that goes for the players as
well – is having to live with a deal they hate.
We often
see arbitration in labor disputes, where someone feels like they were fired
without a good reason. We even see it within the sports arena, where players
and teams go to arbitration over things like salary. However, to have a third
party decide the fate of a league’s business model for the foreseeable future
is a no-go and would never happen.
So forget
about arbitration. Zero chance.
Bettman’s Proposal: Players and Owners
Meet
An admission
that the Fehr/Bettman dynamic is not working, the Commissioner proposed that
the leaders on both sides recuse themselves for the time being and let the
players and owners negotiate directly.
Yesterday,
we learned that Fehr agreed to the player/owner meeting – but with conditions.
His brother Stephen Fehr will be present. On the NHL’s side, Bettman has
countered with Daly.
The
meeting was not going to happen without conditions. At law, inequality of
bargaining power between employer and employee is an important legal concept
and one that courts take very seriously. It refers to one side having more
power than the other side by virtue of their position and knowledge. Under
those circumstances, the more powerful side can secure more favourable terms of
settlement simply by virtue of the power imbalance.
That’s why
you will often see contracts include a clause that provides that the sides have
sought independent legal advice. And that’s why contracts with minors are
generally unenforceable.
In the case
of NHL owners and its players, there is unequal bargaining power. The
owners operate in the complex and sophisticated world of business on a daily
basis. They are comfortable and experienced with that setting. Most players, however,
don’t have that comfort or experience. And why should they? They are hockey
players that have not had the chance to gain the requisite level of expertise
in the field of business.
As well,
the owners are the bosses, and there is an inherent imbalance as a result
of the employer/employee relationship.
It would be unreasonable to ask an owner to
jump onto the ice. It is equally unjust to ask a player to jump into the boardroom.
The players may well be very capable to grasp the issues. However, they lack the
experience and confidence required to bargain effectively.
So Fehr
agreeing to the proposed player/owner meeting with conditions is no surprise.
What If The Meeting Doesn’t Work?
If Fehr
and company conclude that there is no room for compromise, the NHLPA could
elect to dissolve itself by way of a disclaimer of interest with a view initiating
antitrust litigation. The first goal in that case would be to ask a court to
declare the lockout unlawful and lift it. If that happened, the NHL would have
to resume operations (unless it appealed – which it would). The NHLPA would
probably bring the lawsuit in a jurisdiction favourable to players, like
California.
However,
if the NHL believes that the threat of the NHLPA dissolving itself is very
real, the NHL could sue first. They would do this in an attempt to secure a
court in a jurisdiction (like New York as the NBA did) that favours the owners.
Filing lawsuits first is a good way to try and get a favourable court. With two lawsuits about the same thing in different courts, we would likely see a fight over which court should hear the case. Messy.
Ultimately,
the NHL need only to look to Marvin Miller’s legacy, the history of the MLBPA
and Fehr’s 24 years as head of the MLBPA to understand why the NHL’s current
proposal has not gained traction.
Little will change with a player/owner meeting unless something is given up. It’s
less about who is talking and what is being said.
In fact,
it's possible that the players may be more emotional than Fehr
(actually, bet on it), and a meeting that is not handled with skill and care
may set things back, rather than advance them.
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