On Contracts and CBAs

[Disclaimer before beginning: I am not a lawyer.  I have a rudimentary knowledge of legal matters, although I did take a class in sports law some years ago that was taught by a former deputy commissioner and head legal counsel of a professional sports league.  I’ll refrain from mentioning his name in case I screw up this writing; I wouldn’t want it to reflect negatively on him, particularly since I really enjoyed his class and learned a lot.]

I’ve sometimes wondered about what it would be like to be a genie, partially because I can be annoying and partially because I can be overly pedantic.  The result would be that someone would free me from a lamp and wish for something, not realizing that I would find more ways than thought possible to mess with that person.  Wish for a million bucks?  Here you go, one million male deer.  Or one million Zimbabwean dollars.  Or one million American dollars, all in pennies and stacked in a pile the size of a mansion.  Or one million American dollars, all in large bills in a briefcase in the back seat of your car…which happens to be unlocked and in plain sight.

Or maybe you don’t want money, maybe you’d just prefer to fly.  In that case, you can only fly at 1 MPH.  And if you want to fly at a normal speed, you have to be in a fully reclined position like on a luge.  And you’re still subject to whatever the temperature is at the altitude that you’re flying, as well as the oxygen content of the air.  No sir, no homeostatic bubbles for your flying.

By the time that my hapless lamp-finder had thought of all contingency plans for how I could mess with them, a single wish would be a contract 50 pages long and single-spaced.  And I’d still find a loophole to continue to annoy them with.

There are three very important things to remember when it comes to establishing some type of agreement, whether an employment contract or a collective bargaining agreement or a wish from a malevolent or simply annoying genie.  Those are the definition of a contract, the definition of ex post facto, and the importance of clear language.  I’ll tackle these out of order.

First up is “ex post facto”.  This is a Latin phrase that means “from the aftermath” or “out of the aftermath”, and it refers to a law that retroactively alters the status or consequences of a particular action.  To use a simple example, you park your car on the street that you live on.  Following a slew of complaints, the city decides to make the street itself a no-parking zone.  The city then issues tickets for illegal parking to those who had parked on the street previously.  The first part (making the street a no-parking zone) is perfectly legal; the second part (issuing tickets for something that was not illegal when the action was committed) is not.  The reverse situation, where a no-parking zone becomes a legal parking area, could have the opposite effect; those who were ticketed for illegal parking previously could not have their violations thrown out because they were illegal when the action was committed.  The city may possess discretion to simply tear up the most recent tickets, but they’re also under no obligation to do so.  Ex post facto laws are taken so seriously that they’re specifically outlawed in the Constitution of the United States, as well as Canada’s Charter of Rights and Freedoms.

The reason I bring up this particular concept is because the NHL has gone through a handful of collective bargaining agreements (CBAs).  And unless something is very specifically bargained away, the provisions that existed when an action was taken are what matters.

To use a specific NHL example, the New York Islanders drafted Todd Bertuzzi in 1993 under a CBA that did not have a rookie salary cap.  If the Islanders could not get him signed by the day of the 1995 draft, he would re-enter the draft (where the Islanders had the second overall pick).  GM Don Maloney publicly said that if Bertuzzi did not sign the Islanders’ final contract offer before the re-entry deadline, the team would simply re-draft him and bound him by the rookie salary cap that did not exist when he was drafted in 1993.

Could he do this?  Yes.  A new CBA was implemented in January 1995 following the first lockout, and one of the provisions imposed a salary cap on incoming rookie players where none existed previously.  Since Bertuzzi was drafted in 1993 under an earlier CBA with no rookie cap, he was bound by those provisions only so far as the time that he re-entered the draft.  The instant that he re-entered the draft, he would be bound by the new CBA.  Maloney’s final offer was reported to be $900,000 per year on a one-way contract (where he would be paid the same even if he was in the minors); the maximum under the 1995 CBA was $850,000 per year on a two-way contract (where he’d be paid that amount if he was in the NHL and substantially less in the minors).  No specific provision existed in the 1995 CBA that dealt with unsigned 1993 draft picks re-entering the draft, so this is pretty cut and dry.

The second big concept is “what is a contract?”  Taken very broadly, a contract in American law is offer, consideration, acceptance.  There are other more clearly defined parts of each of these, most of which do not apply when we’re talking about professional sports.  “Consideration”, which is defined in contract law as the exchange of something for something, can be simply shortened down to “something”.  If a team offers a player one million dollars to play hockey for that team, that’s the consideration: the team is exchanging one million dollars for the player’s services, and the player is exchanging his services for one million dollars.

A standard player contract (SPC) contains all sorts of provisions that further define the role of a player.  A CBA contains huge numbers of provisions that spell out the general agreement for the exchange of “something” between the NHLPA and the NHL.  Other matters common outside of professional sports, like unconscionability, duress, or privity simply do not enter into the equation of sports.

The third big concept involves vague or ambiguous language, as outlined above with my example of an annoying genie.  With contracts of any type, a provision that is vague or ambiguous may be subject to challenge; more specifically, a  provision that is vague or ambiguous is almost always going to be decided against the party that drew it up in the event that it is challenged.