Legal Look: Against a deadline - time for NHLPA to disclaim?

Eric Macramalla, TSN Legal Analyst

1/2/2013 6:21:43 PM

The players have authorized the NHLPA to file a disclaimer of interest by January 2. A disclaimer of interest dissolves the Union and converts it into a trade association. That means that the NHLPA has revoked its ability to collectively bargain on behalf of the players.

So will we see the NHLPA file a disclaimer of interest by today's deadline?

The NHLPA will only file a disclaimer of interest if it believes the sides are not close to settlement. If Donald Fehr, the head of the NHLPA, concludes that there is still a significant gap between the sides and that settlement cannot be achieved in the short term, then expect the disclaimer to be filed today. For the NHLPA, the hope was that the threat of a disclaimer could act as a catalyst to getting a deal done on terms more favourable to the players. If that doesn't work, then the act of disclaiming interest and filing an antitrust action would be the next step in trying to get a deal done.

However, if the sides are close to a new deal, the NHLPA will not file the disclaimer. Ultimately, in a case like this, a disclaimer would likely extract some leverage in negotiations. If the sides are nearing a deal, the disclaimer would become unnecessary. As well, a disclaimer adds a layer of complexity to negotiations, and would just become a distraction if the sides are close.

So when deciding whether to disclaim, Fehr will consider proximity to a deal and not whether a deal has been concluded.

If the NHLPA does not disclaim interest by 11:59pm on January 2, it could always conduct another player vote with a view to authorizing a disclaimer at a later date. That being said, it would be a surprise to see a re-vote. Expect the NHLPA to treat the January 2 deadline as a now-or-never scenario.

Will the sides close the gap in time? That's tough to say. We do know,  however, that there are significant issues that still need to be resolved, including the salary cap for the 2013-2014 season, a cap on escrow payments, player contract length, CBA length, salary variance, amnesty buyouts and pension benefits.

So while the sides are inching closer to a deal, and while we've heard of some movement on issues like the salary cap and escrow, there is still a lot of work to be done. As we approach midnight, a possible disclaimer looms large over these talks.

And remember NOTHING is agreed upon until ALL is agreed upon. This is important. A number of times we have heard that a certain issue has been settled only to learn later that one side has had a change of heart.

Case in point - pension benefits. Previously, the NHL funded the majority of the pension plan. Every team made an annual pension contribution to every player's retirement account with the NHL Pension Society. It was $49,000 for players with 160 games on an NHL Roster, and $26,000 for players that played less than 160 games on an NHL roster. The owners, however, don't want to fund the pension anymore. For the players, what's worse is they believed the pension matter was settled back in December.

Don't underestimate the importance of the pension issue. It's critical to the players and could represent a substantial obstacle to settlement.

And that goes back to what I said before: until there is agreement on ALL issues, there is agreement on NO issues.

Stay tuned.

Eric Macramalla is TSN's Legal Analyst and can be heard each week on TSN Radio 1050. You can follow him on Twitter @EricOnSportslaw.