Force Majeure and the CBA Disputes

Back in June of 2020, the NHL owners and NHLPA signed a new Collective Bargaining Agreement. The deal was for six years and included the outline for a return to play during the 2020 NHL playoffs. Fast forward about six months, and it feels like the CBA has expired with the owners and players at odds over deferrals and escrows. Funny thing is, deferred money and escrow caps were agreed upon in the current CBA.

Excerpt from “Players feeling angry, betrayed by NHL’s new CBA amendment proposals
by Elliotte Friedman of SportsNet

That was November 19th of this year. Friedman also reported that the owners unofficially proposed two new options. According to several of his sources, the first offered a 20% deferral for player salaries, while the second offered a 26% deferral. These percentages still hold true, and the players are apparently angry. Rightfully so.

During the day on Wednesday, NHL Commissioner Gary Bettman gave an update from his side of negotiations. He clarified, saying that the owners are not trying to renegotiate. However, upping the potential salary deferral amount seems a bit like renegotiating, considering the CBA’s terms aren’t quite what is being proposed by the owners

Bettman did make certain to say that the focus is on getting through the upcoming season to make sure the 2021/22 season gets back to normal.

Obviously this all hinges on how the pandemic is by then, but Bettman is right here. The 2020/21 season, if it happens, will be unconventional, but could somewhat mimmic what the 2012/13 lockout-shortened season looked like. There’s ideas of a 42, 48, and 60 game season being floated around. Logic says that the earlier the two sides can agree to terms, the more games will be played during the upcoming season. However, there’s a slight chance that the upcoming season may not happen at all if what Allan Walsh is saying holds true.

A Force Majeure according to the Legal Information Institute is this:

A provision commonly found in contracts that frees both parties from obligation if an extraordinary event prevents one of both parties from performing. These events must be unforeseeable and unavoidable, and not a result of the defendant’s actions, hence they are considered “an act of god.”

https://www.law.cornell.edu/wex/force_majeure#

Walsh continues in his thread, describing the flaws in this type of move by the NHL owners. According to his thread, the owners are demanding an additional $300 million in concessions from the players. Having already accepted 72% of their salaries for the 2020/21 season, the players are reluctant to give up any more than they already have. Rightfully so. Walsh continues, and tweets that invoking “Force Majeure” if the owners do not get their way here isn’t allowed by the current CBA.

Bettman refuted the notion that the owners are trying to renegotiate Wednesday afternoon. He goes on to say that the agreement that was reached at the time was based on collective assumptions that are no longer applicable. Regardless of the numbers, the tentative start date to the 2020/21 season is currently in jeopardy due to the back-and-forth dragging on. Each party involved has a legitimate gripe when it comes to the current news.

The Owners

From the owners’ perspective, they’re slated to lose a lot of money. TV deals, gate revenue, they’re losing out on a majority of the money they bank on year in and year out. On one hand, most are pretty well off and a normal person would shrug at the notion that they’re losing money. However, they have an obligation to pay their players, staff, and everyone involved. If they can’t make those payments, that adds a level of stress that some of us just aren’t accustomed to.

One could argue that the owners should have seen this coming when originally negotiating the current CBA. That’s fair, but it’s also fair to note that they might not have seen this pandemic continuing this long. Whether that’s ridiculous or not, it’s fair to assume that’s the case. Now they’re in a panic about losing more money than originally thought, and they’re trying their best to offset their potential losses.

The Players

It’s hard to not side with the players here. From a business standpoint, the owners stance is understandable. When the players are asked to concede even more pay, how does that seem fair. To put it into terms that relate more to a non-athlete, imagine your job. Your boss comes to you and says, “Hey, we’re projected to take a loss this quarter, so I’m docking your pay by 28%. Your salary is $50k. That means that for that quarter, you’re working as if you’re making $36k. That $14k makes a big difference.

No talking in contractual terms, a contract is legally binding. Between players contracts and the CBA, the terms of each deal should be adhered to. Understandably, “Force Majeure” is a way out due to the financial hardship that could be endured by the owners. The players likely see that as a cop-out. They signed their contracts for a reason, and should be paid accordingly. Just because the owners can’t make ends meet shouldn’t mean the players shouldn’t get what’s owed to them, right? If your boss can’t make ends meet, is it right for you to take a pay cut for the same amount of work you’ve always done?

Semantics

Let’s revisit the collective bargaining agreement. Let’s also say that the owners invoke “Force Majeure.” That would end up resulting in a lockout. According to Allan Walsh, that’s strictly prohibited by the terms of the CBA. Digging deeper into “Force Majeure,” it states that in order to invoke the measure, “These events must be unforeseeable and unavoidable.” At the time of the CBA being agreed upon, the players and owners were well-aware of COVID-19 and the impact it’s had and continues to have on society. Talk of a second wave was well documented, so does it technically count as “unforeseeable and unavoidable?”

At the end of the day, it boils down to owners wanting to protect their money and players wanting the money they’ve earned. Many will view this as a money-grub from the owners, calling them greedy for doing so. Some will say, “why can’t the players suck it up and make the concessions.” Both sides have a point, but it’s human nature to take a side here.

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