Flames: O'Reilly Waiver Issue Open To Interpretation

By Fraser Blair (@fmblair) & Eric Macramalla

Earlier today, Sportsnet.ca reporter Chris Johnston reported that Ryan O'Reilly, who signed an offer sheet with the Calgary Flames last night, would have had to clear waivers before he could play with the Flames this season.

Johnston wrote: 

"In a bizarre twist to an already unusual story, Sportsnet.ca has discovered that the Flames were not only in danger of losing 2013 first- and third-round draft picks as compensation if the Avs hadn’t matched the O’Reilly contract, but they also would likely have had to surrender the player before ever getting him in uniform.

That’s because O’Reilly would have needed to clear waivers before joining the team’s roster.

The unsigned forward spent part of the NHL lockout playing with his brother, Cal, for Magnitogorsk in Russia. According to Metallurg coach Paul Maurice and KHL spokesman Shawn McBride, he appeared in games on Jan. 21 and Jan. 23 – both after the shortened NHL schedule was back underway – which meant that waivers were required before O’Reilly could return to the NHL as a free agent midway through the season."

Johnston raises a very interesting point, the consequences of which would have been serious and embarrassing for the Flames and General Manager Jay Feaster.

Under the old CBA, Article 13.23 provided that any player who signed an NHL contract while he was playing overseas at the beginning of the NHL season had to clear waivers before playing with the Club with which he signed. You may recall that in December 2011, forward Antti Miettenen was signed out of the Finnish Elite League by the Tampa Bay Lightning. According to 13.23, the Lightning placed him on waivers and he was subsequently claimed by the Winnipeg Jets.

The old CBA would have required waivers for O'Reilly regardless of whether he signed with the Avalanche or another Club because O'Reilly played in two KHL games after the 2013 NHL season began.

However, since the old CBA expired and the new CBA has yet to be ratified, reference is had to the Memorandum of Understanding (MOU). On page 19 of the MOU (which is a summary of the terms that govern the relationship between the parties moving ahead until the new CBA is drafted), it states as follows:

 “All Players on a Club’s Reserve List and Restricted Free Agent List will be exempt from the application of CBA 13.23 Waivers in the case of a mid-season signing.”

So some have reasoned that this provision eliminates the need for a player to clear waivers if he is re-signing mid-season with his current club only.

However, there is the argument that the conditions for avoiding waivers are only limited to the following:

1) A player must be on “a” Club's Reserve List and Restricted Free Agent List, and;

2) He must sign a contract mid-season.

In other words, the language doesn't expressly provide that a player may only avoid waivers if he re-signs with the team that holds his rights (in this case the Avs). Instead, it states that so long as the player is on “a” Club's Reserve and Restricted Free Agent list, he will not be subject to waivers before playing, regardless of where he signs.

Put another way, the Flames likely interpreted the MOU to provide that O’Reilly being on the Avs reserve list makes him waiver exempt for all teams.

Articles 10 and 13 of the old CBA, the portions that govern offer sheets and waivers, are chalk full of references to the “Prior Club” (the Avalanche) and the “New Club.” (the Flames) This is significant because it shows that the NHL and the NHLPA have treated the Prior Club and the New Club differently in other provisions of the CBA.

So the MOU does not distinguish as to the club signing the player. So the language is such that the parties understood there would not be a distinction between the Prior and New Clubs in this regard.

This gives the Flames an arguable case that O’Reilly should not have been placed on waivers. Not surprisingly, the Flames have stated that their interpretation is not consistent with the League’s interpretation on this point. This is perhaps a strained argument since arguably the idea between the provision was to let current teams bring their players back post-lockout without a penalty. Still, the language utilized by the sides casts some doubt in its interpretation.

If the O’Reilly did indeed go on waivers, we may have seen the case go to arbitration by way of a Flames grievance. That would have been messy.

So it's fair to conclude that the Flames weren't totally out in left field on this one. Maybe Texas Leaguer area but not left field.

Finally, this issue will likely be cleared up in the final collective bargaining agreement, which we expect will be ratified soon.