With the Threat of Disclaimer, What Does a "Trade Association" Mean to the NHL? >

Friday, Jan 04, 2013 -

Yesterday, a report had gone out saying that the Players will be voting to re-authorize their Disclaimer of Interest. Since the Players voted 'Yes' overwhelmingly last time, we should assume it'll be no different this time around. 

Remember, just because the NHLPA will have the power to disclaim doesn't mean they will. After all, their last deadline came and went, and the disclaimer was never used due to negotiations moving progressively. And despite what many journalists are leading their readers to believe, the Players voting to disclaim once more doesn't spell doom & gloom in the negotiating sessions. The Players want leverage, and the power to disclaim is certainly a form of advantage. 

But let's say the NHLPA winds up using their Disclaimer of Interest this time around. What would it mean for the Players, the League, and -- more importantly -- the CBA?

TSN Legal Analyst, Eric Macramalla, has been pretty active on Twitter ever since these labor negotiations began flirting with litigation. Eric wanted to make it clear that without a Players' Union, there could absolutely not be any Collective Bargaining Agreement --

Just to recap; If the NHLPA disclaims, it basically means the Union's stepped away from the Players as representation. The Players would then become a Trade Association. With no Union representation, there's no way to bind the Players to the National Hockey League through a bargaining agreement which would open the doors to antitrust lawsuits brought on by the Players and filed against the League. 

The CBA acts as a protective bubble for the NHL Ownerships; Without it, they could theoretically be viewed as competitors fixing the marketplace by harmoniously making the decision to lockout the Players, which is illegal. 

The NHL has already filed against the NHLPA in New York court to grant the lockout as legal, should the NHLPA disclaim. 

Alright, so....in our hypothetical situation, the Union has already disclaimed. At this point, the Players are now a Trade Association. What's a Trade Association?

An online definition describes it as an association of organizations in the same trade formed to further their collective interests, esp in negotiating with governments, trade unions, etc.

But what exactly does this mean for the Players and the NHL?

To better answer questions like that, I've reached out to Aubrey Kent

Aubrey was featured in a TSN.ca article back in November when negotiations began introducing third-party mediation. Aubrey is the founding director of the Sport Industry Research Center (SIRC) at Temple University, located right here in Philadelphia. 

He may not be a lawyer, but Aubrey has an extensive background in sports management and economics, as well as "a pretty good handle" on all the litigation that's wrapped around the current NHL labor dispute. 

We'll excuse him for being a Toronto Maple Leafs fan for now, and allow him to breakdown what a Trade Association would mean to NHL and its Players --

Kent: A Trade Association differs from a Union in that it represents the interests of the "industry", not the association of workers. Technical difference, but not really a huge one on its face. 

The practical implication is that without being a Union, Fehr and company couldn't negotiate on behalf of the players as a whole. He could still be an "advisor" to players, but they would not be bargaining with the league as a group. They would each be negotiating on their own with clubs, since the "league" would no longer represent clubs and they would have to act like 30 independent businesses.

So, how does all of this make the League's Board of Governors sweat? 

Kent: If it is not a negotiating tactic (it is, but for the sake of argument let's explore it), it would fundamentally change sports (not just hockey, which is why other leagues file briefs on behalf of the league). If no union, and therefore no collective bargaining, existed, then antitrust exemptions usually granted in sports wouldn't apply. 

Therefore, no draft, no free agent restrictions, no waivers, no salary cap, etc. would exist. Truly a new way of doing business. Nothing could stop the Leafs, for example, from giving Crosby and Stamkos $30 million each. Nor, for that matter, would it prevent teams from paying fourth liners minimum wage (in theory). It would certainly end the season and likely the next one as well. It would certainly also put about 5-10 teams out of business. Franchise values would plummet, since new team owner prospects would not be attracted to such uncertainty.

And we thought the Mayan Calender was a window to apocalyptic measure. This athletic anarchy is the business equivalent to Escape from New York. (High five! 2-points for the Kurt Russell plug!)

Quick, Aubrey! Give me something to feel good about!

Kent: My take? Disclaiming interest is clearly disallowed if used solely as a bargaining tactic, and the league is unlikely to be overly pressured by it. The players really cannot claim that they have either been unfairly treated or poorly represented by being unionized. They can't say the NHL lockout has kept them from working (since half of their union is playing currently either in the AHL or overseas). 

The fact that they keep saying how much they love Fehr only undermines their case further and lays bare their true intentions - which is to pressure owners to deal. The NHLPA is undermined further by the fact that the NFL and NBA players showed how transparent this tactic is by reforming their union as soon as they had a deal in place. 

Finally, it doesn't really make sense for the players in the end-game if they were to truly be non-unionized. For example, they resist contract length limit and salary variance in order to preserve more money for the middle/lower class of players - but a league without bargaining (as explained above) would make that problem much worse.

We knew these negotiations have turned into a peacocking contest. With the January 11 deadline drawing closer, each side's going to need every degree of footing they can get before the pressure ultimately cracks the other. 

Is the thought of a Trade Association terrifying to the fans? Yea, like 'walking in on your parents' kinda terrifying. But given Aubrey Kent's insight, I'm not too worried that it will become a reality....

....the Trade Association, I mean. Not walking in on my......you get the point. 

I'd like to formally thank Aubrey for spending the time this morning to answer my questions and for going into tremendous detail. Thank you.

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