It’s March and the annual NCAA Men’s Basketball tournament is quickly approaching. Here in Canada many junior hockey clubs are gearing up for the spring push into playoff season and a hopeful birth in the Memorial Cup.
Off the ice and hardwood however a different kind of battle has been picking up. A legal battle between leagues and players. The NCAA system acts as a quasi minor league and feeder system for professional leagues such as the NBA and NFL, while the Canadian major junior hockey leagues are a prime source of talent and development for the NHL. It goes without saying that amateur sports at this level are big business.
Canadian junior hockey players are generally not paid (they do receive a stipend and permissible compensation primarily limited to education), and this fact doesn’t sit well with all players and ex-players.
There are a number of lawsuits being brought that seek to classify these competitors as employees, entitling them to compensation and protection afforded to other employees under the law. There is a proposed class action before the Ontario courts that seeks, inter alia, a declaration that players are employees, as well as all back pay and applicable employer payroll contributions that would have been required by law.
The critical question is whether the players are independent contractors, or employees. This is so important because most statutory and common law protections only apply to employees. The rational being that independent contractors are performing services on their own account and are therefore not in need of labour protection. Employers are wise to this distinction, and there has been a trend of writing employment contracts that purport to create a contractor relationship as opposed to employer and employee. The Courts will not be fooled however, and will instead examine the particular relationship, regardless of the terminology used, to make a determination of what legal relationship really existed. There is no strict formula, but the Supreme Court of Canada decision in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc. set out six factors that ought to be considered, including the level of control the employer has over a worker in terms of how the services are provided, who provides the equipment, what level of financial risk the worker is taking on, and what opportunity the worker has to profit in the performance of his or her tasks.
Given the relationship between teams and player, there is a very real possibility that junior players will be found to be employees and deserving of protection under the law. This would no doubt have a considerable impact on the economics of the junior game across Canada.
Matthew Harmes is an associate at the law firm of Cobb & Jones LLP. For more articles, visit the Library Page at www.cobbjones.ca