Amateurism North of the Border: The Fight for Minimum Wage in the Canadian Hockey League
Updated: Jul 28, 2020
By: Matt Rubinoff
Back in April, the NCAA announced that student-athletes may soon be able to compensate off their name, image, and likeness. As part of the NCAA report, student-athletes would have access to two areas of business: (a) third-party endorsements, and (b) compensation work product or business activities. In a wave of public opinion that has shifted significantly from attacking Ed O’Bannon a decade ago as a “money-hungry ex-jock,” to the modern player empowerment era that actually favors a payment system to college athletes, the time was just right for the NCAA to back away from their sanctimonious amateurism pedestal.
Although it is still uncertain how or when these measures may be implemented, especially given the uncertainty surrounding the coronavirus pandemic and the upcoming college sports seasons, the fight continues to compensate college athletes by more appropriate, and fair, means.
At the same time, unbeknownst to most following the NCAA saga, a similar debate slowly stewed in Canada between amateur hockey players and the top developmental hockey league in the world: the Canadian Hockey League (“CHL”).
I. What is the Canadian Hockey League?
The CHL is the premier developmental system for aspiring young hockey players between the ages of fifteen and twenty. As an umbrella organization, the CHL presides over three regional member leagues across Canada and parts of the United States: (a) the Ontario Hockey League (“OHL”), (b) the Western Hockey League (“WHL”), and (c) the Quebec Major Junior Hockey League (“QMJHL”).
Year after year, the CHL delivers the National Hockey League (“NHL”) more high-end talent than any other developmental league in the world. For example, since 2009, about 44% of the total players selected in the NHL Entry Draft played their previous season in the CHL, or 1,025 of the last 2,336 draft picks. In the upcoming 2020 NHL Draft, 37% of all draft-eligible players according to NHL Central Scouting’s final rankings worldwide come from the CHL.This number increases to 59% when you consider only North American scouted leagues.
As a brief comparison, even in an impressive year for USA Hockey in 2019, where nine players were drafted in the first round out of either the Michigan-based National Team Development Program or from one of the various American junior hockey leagues, a notable down year for CHL-drafted players included thirteen taken in the first round. Safe to say, it is a pretty competitive league.
The high level of competition on the ice is well supported by professionally run organizations and a schedule that nearly mimics day-to-day life in the NHL. CHL players commit to a 68-game regular season in addition to up to 30-plus playoff games. Compared to the NHL’s 82-game season and up to 28-game playoffs, it is the closest thing prospects can get to the professional experience. Unlike NHL players, however, CHL players are not paid for their contributions.Under the law, they are “amateur student-athletes,” not employees. Sound familiar?
Instead, CHL players receive a modest stipend, averaging about $125 a week, and potential coverage of University tuition for after their playing careers depending on how long the player stays active in the league. Setting aside the future educational benefits, that comes out to about $3.12 an hour for a forty-hour work-week. In 2014, amidst criticism for its lacking educational programs, the league expanded its student package. Now, players have eighteen months from their last potential game in their twenty-year-old season to exercise their earned scholarship.
For example, when a player graduates from the league as a twenty-year-old, they may seek to play professionally in Europe or sign in the minor leagues in the USA. Though, if they do not attend University within eighteen months of their last CHL game, their tuition package expires and they are therefore on the hook for the full cost. For some, professional hockey might be worth the gamble. For the majority of players, the limit is a mere loophole for the league to avoid unnecessary costs at the expense of hardworking alum.
II. The CHL Minimum Wage Lawsuit
In 2014, a small domino dropped into the court system. Former CHL player Sam Berg asked an Ontario court to consider whether CHL players are considered employees under the law and therefore entitled to minimum wage pay.Berg, a Niagara Ice Dogs draft pick in the OHL, took his time in deciding between the NCAA or the CHL route. To make his decision a bit easier, the Ice Dogs promised Berg a full four-years of tuition to University if he played just one game for the Ice Dogs. Sounds like a sweet deal.
After 16 games, Berg fell out of favor with the coaching staff and was sent down to play for the local Junior B team in the neighboring town. Think of this as a demotion to JV. After a shoulder injury that same season, Berg decided that it was time to forego his hockey career and enroll in school full-time. Because Berg did not show up to training camp the following year, the Ice Dogs argued that Berg had voided his contract and thus refused to pay for any school tuition. After some back and forth, the sides eventually settled on the Ice Dogs paying for one semester of Berg’s courses at McMaster University in Hamilton, Ontario. Nonetheless, the legal battles for the CHL were far from over.
Two years later, the issue hit nationwide. In addition to Berg’s claim in Ontario, class actions were certified in the provinces of Alberta and Quebec against the WHL and QMJHL respectively, claiming players have status as employees and had not received minimum pay and other benefits required by employment standard legislation. In Berg, the Ontario Superior Court dismissed the plaintiffs’ claims of conspiracy, negligence, and breach of contract. On appeal, a three-judge panel reinstated the claims and denied the OHL’s challenge to strip the class-action status. The reinstated claims now left the court to decide the question of whether the CHL owed a duty of care to ensure players were properly classified as employees under employment standards legislation. At the time, this was good news for the players. A metaphorical light at the end of the tunnel to possibly force the CHL to recognize their athletes as employees.
Historically, Canadian courts have endorsed the amateur status of CHL players, and until recently, avoided addressing employment status issues altogether. In Hawes v. Sherwood-Parkdale Metro Junior Hockey Club, Inc, the court held the plaintiff player was not entitled to recover, once cut from the team, the remaining pay he was initially promised in his written contract. Neither the lower court nor appellate division addressed the plaintiff’s employment status, but rather interpreted the payments as “allowances” rather than “compensation for services.” The wording of the opinion seemingly avoided any confrontation with statutory definitions regarding employment status.
Under the Employment Standards Act of Ontario, an “employee” is defined as “a person . . . who performs work for an employer for wages” or “a person who supplies services to an employer for wages.” Accordingly, “wages” refer to “monetary remuneration payable by an employer to an employee under the terms of an employment contract, oral or written, express or implied.” Given these definitions, according to the class-action plaintiffs, the hundreds of teenage players under contract in the CHL who commit to perform their services for their respective teams every day certainly meet the criteria as an employee and therefore deserve the benefits of “at least minimum wage.”
Now, equipped with a ripe $180-million class-action lawsuit, courts finally had the opportunity to address these issues head-on.
On May 15, 2020, the CHL announced it had settled the lawsuits for $30 million. According to the player’s attorney, the settlement was reached through mediation in February, well before the coronavirus pandemic took full strides in North America. The 60 teams across the three leagues are expected to have to cover about $250,000 apiece, with the remainder covered by the CHL’s insurer.
Under the terms of the settlement, no players who have signed an NHL contract are eligible for payouts. Any former CHL player eligible will receive an amount dependent on how many others file claims, as well as each player’s respective service time in the CHL.
In a joint statement, the parties noted, “as a result of these legislative declarations, there is now no legally recognized obligation for owners to treat players as employees under the employment standards acts presently in effect in the provinces with CHL teams.”
Once again, the CHL gets its way. For Sam Berg, an “honorarium” payout of $20,000 represents a modest victory for a legal battle spanning nearly six years. To put this into context, the average tuition for an undergraduate program at McMaster University before room, books, and meal plans are just under $6,000, or $42,000 over seven semesters.Understandably, this is far from a glamorous legal ending. No movie scripts or courtroom dramas. If anything, it is unsatisfying.
Notably, it is important to consider a relevant distinguishing factor here: reality. On its face, the parallels between this fight and the fight against the NCAA jump out immediately. However, the respective opponents could not be more different.
Up here, the faceless entity at the other end of the negotiating table is not the big, bad, billion-dollar NCAA. It is local, Canadian towns. These are modestly owned teams with realistic budgets. No million-dollar coaches. No billion-dollar facilities. In that sense, it is not as easy to paint the league in such a negative light. It is not well known who the highest-paid public employee of each province is, but you can probably bet that it is not a CHL coach. This is not to discourage the communities of Brandon, Manitoba or North Bay, Ontario, but they are no comparison to the money-making factories out on the Tuscaloosa or Baton Rouge campuses every Saturday in the fall.
In 2017, financial records released in the wake of the lawsuits showed many CHL teams struggle to make ends meet. Across five reported seasons sometime between 2011 and 2017, the OHL disclosed that 11 of 20 teams had an average annual net loss. Now, of course, recent developments with the coronavirus pandemic do not help any of these situations. Although it is certainly a just cause to fight for workers’ rights and a basic living wage, the answer is never easy. And the results, especially in the legal world, are not always satisfying.
All this being said, nobody knows for sure if this settlement ends the conversation as it relates to paying CHL players a minimum wage. Hopefully, it does not. A hockey team is only as good as the weakest link. That is a boring cliché any coach or general manager will preach to. But this has to work both ways. The same standard follows for your league, your commissioner, your teams, and how you treat your players. Every single one of them. From the next first overall pick to the fourth liner. We know the system is not perfect, but who says it still cannot be improved?
Matt is a rising 3L at Penn State Law.
 See Zac Al-Khateeb, NCAA NIL rules, explained: What recommended updates mean for student-athletes, and what comes next, Sporting News (April 30, 2020), https://www.sportingnews.com/us/ncaa-football/news/ncaa-nil-rules-updates-explained-student-athletes/118otm673eogy1mmrl0q7f4ycv.  See id.  Michael McCann & Ed O’Bannon, How College Sports Video Games Could Return to Your Console, Sports Illustrated (Feb. 08, 2018), https://www.si.com/college/2018/02/08/court-justice-ed-obannon-book-excerpt-ea-sports-college-sports-video-games.  See Abigail Hess, Majority of college students say student-athletes should be paid, survey finds, CNBC (Sept. 11, 2019),https://www.cnbc.com/2019/09/11/student-athletes-should-get-paid-college-students-say.html.  See Hockey Reference, https://www.hockey-reference.com/draft/, (last visited July 19, 2020).  See CHL Staff, 146 CHL players listed in NHL Central Scouting’s Final 2020 Draft Rankings, CHL (April 8, 2020), https://chl.ca/article/146-chl-players-listed-in-nhl-central-scoutings-final-2020-rankings.  See id.  See Andrew Steadman, Getting an Icy Reception: Do Canadian Hockey League Players Deserve to Be Paid?, 13 Willamette Sports L.J. 39, 40 (2016).  See id.  See Simon Black, Should OHL Hockey Players be paid? Yes., The Toronto Star (Nov. 27, 2018), https://www.thestar.com/opinion/contributors/thebigdebate/2018/11/27/should-ohl-players-be-paid-yes.html.  See Patrick King, Improved OHL benefit package changes landscape, Sportsnet (Feb. 24, 2014), https://www.sportsnet.ca/hockey/juniors/improved-ohl-benefit-package-changes-landscape/.  See id.  See id.  See Rick Westhead, Junior hockey player suing CHL gets 'the finger' from fans, cold shoulder from grandpa, TSN (Nov. 21, 2014), https://www.tsn.ca/westhead-junior-hockey-player-suing-chl-gets-the-finger-from-fans-cold-shoulder-from-grandpa-1.140803?tsn-amp.  See id.  See id.  See id.  See id.  See id.  See id.  See Rick Westhead, Conspiracy, negligence charges reinstated against OHL in minimum-wage lawsuit, TSN (April 4, 2019), https://www.tsn.ca/conspiracy-negligence-charges-reinstated-against-ohl-in-minimum-wage-lawsuit-1.1285205.  See Berg v. Canadian Hockey League, 2017 ONSC 5382, para. 40 (Can.).  See id. para. 51  See id. para. 143-44.  See Steadman, supra note 7, at 47.  See Hawes v. Sherwood-Parkdale Metro Junior Hockey Club Inc., 1990 CarswellPEI 64, para 7-15 (Can.).  Id. at para. 7.  Employment Standards Act, 2000, SO 2000, c. 41, s. 1.  Id.  Id. (noting an employer “shall pay employees at least minimum wage”).  See Rick Westhead, CHL settles minimum-wage lawsuits for $30 million, TSN (May 15, 2020), https://www.tsn.ca/chl-settles-minimum-wage-lawsuits-for-30-million-1.1476278.  See id.  See id.  See id.  Id.  See McMaster University, Tuition Fees, https://registrar.mcmaster.ca/tuition-fees/#tab-1, (last visited July 19, 2020).  See Matthew Michaels, College football and basketball coaches are the highest-paid public employees — here are the biggest paydays, Business Insider (Aug. 16, 2018), https://www.businessinsider.com/highest-paid-public-job-every-state-college-football-basketball-2018-3.  See Rick Westhead, Lawyers follow the money as court releases CHL team financials, TSN (Feb. 27, 2017), https://www.tsn.ca/lawyers-follow-the-money-as-court-releases-chl-team-financials-1.682888.  See Gare Joyce, OHL, WHL filings in CHL lawsuit show teams struggling to make ends meet, Sportsnet (Jan. 19, 2017), https://www.sportsnet.ca/hockey/juniors/ohl-whl-filings-chl-lawsuit-show-teams-struggling-make-ends-meet/.