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Former NHLPA employee pursues confidential reports into alleged fraud at union

NHL Players' Association NHLPA NHL Players' Association

A former NHL Players’ Association employee, who alleges he was fired because he refused to keep quiet about a colleague who was allegedly defrauding the union of more than $100,000, will argue in a court hearing in Toronto today that the NHLPA should be forced to hand over all of its records and investigative reports about the alleged fraud.

In an $8.7 million lawsuit filed against the NHLPA in Ontario Superior Court, former technical support analyst Allan Etherington alleges the NHLPA covered up the fraud and created a toxic work environment before firing him in February of 2019.

Etherington has also accused the union of income tax and insurance fraud. He filed his lawsuit against the NHLPA in November 2019 and is seeking $4 million for general damages, $2.5 million in punitive damages, and additional damages for future income loss and earning capacity.

The NHLPA has denied Etherington’s claims and argues that his lawsuit “contains bare, unfounded and irrelevant allegations, including of criminal and/or illegal conduct, and is scandalous and inflammatory.”

Etherington alleges in his claim that Stephen Frank, the NHLPA’s former director of technology and security information technology, was allowed to resign from the NHLPA with then-executive director Don Fehr’s good wishes in December of 2018.

Frank’s exit came after the union learned through investigations conducted by Ernst & Young and CGI Inc. that Frank had used his own outside company, GeekFork Inc., to misappropriate money through the purchase of expensive computer equipment, Etherington alleges. 

Etherington’s statement of claim alleges that he was resolving a print server issue with a colleague on Oct. 9, 2018, when they discovered an email chain between Frank and an executive with Darktrace, a U.K.-based cybersecurity company that signed an agreement with the NHLPA in March 2018 to provide the NHLPA with an artificial intelligence-powered product that helped protect confidential player information. 

New documents filed in court include an affidavit sworn in Toronto on May 30 by NHLPA lawyer Roman Stoykewych.

Stoykewych wrote that he was provided in mid-October 2018 with a copy of emails between Frank and a salesperson at Darktrace. 

Stoykewych wrote that the NHLPA hired lawyers from the Toronto firm McCarthy Tetrault LLP on Oct. 24, 2018, to provide legal advice about Frank’s employment and the union’s investigation of him. 

“It was of utmost importance to the NHLPA that our investigation proceed in as confidential a manner as possible,” Stoykewych wrote. “As part of maintaining the confidentiality of our investigation, the number of NHLPA employees involved in it, or aware that it was ongoing, was kept to a minimum. In addition, internal discussions relating to it… were held in person, or if that was not possible, over the telephone or by text message.”

Forensic experts at Ernst & Young were hired by McCarthy Tetrault on Oct. 25, 2018, to conduct targeted searches of Frank’s email account. 

McCarthy Tetrault was provided with a memorandum outlining Ernst & Young’s investigation findings on Jan. 8, 2019.

Negotiations over Frank’s departure from the NHLPA, however, had already concluded by Dec. 13, 2018, Stoykewych wrote.

Stoykewych wrote that the NHLPA hired CGI Inc., a Toronto consulting company with expertise in information technology, in December of 2018 to ensure that the NHLPA’s IT systems continued functioning properly and without incident immediately following Frank’s exit and to obtain an assessment of the NHLPA’s IT security and cybersecurity systems. 

Etherington, who is now representing himself in the lawsuit, wrote in a June 28 motion that he was fired by the NHLPA because he refused to stay silent about Frank’s alleged theft.

“The plaintiff did not trust his employer and he knew part of the reason for his termination was because he would not be complicit in the cover up of Stephen Frank’s theft and fraud and be part of the ‘old boys club’ at the NHLPA," Etherington wrote. "The plaintiff was constantly pulled into meetings to be admonished and told that ‘loose lips sink ships.’”

Etherington wrote in his lawsuit that he worried about Frank’s behaviour in early 2018 and discussed those concerns with Stephen Sax, the NHLPA’s director of finance. Etherington claims that Frank continued to work at the NHLPA’s offices during an internal investigation of his activities and had full administrative access to employee emails using office computers. 

Amid the investigation, and while Frank still worked in the NHLPA office, union staff discovered he was accessing NHLPA emails and documents about the probe from the union’s legal department through an unused computer, the claim says.

When Stoykewych was advised by one of Etherington’s colleagues that Frank was inappropriately accessing NHLPA emails and documents about the investigation from the legal department, the employee who discovered his activity was admonished and told to stop all further monitoring of Frank’s activities, the statement of claim says.

In a Mar. 5, 2019, letter to Etherington’s then-lawyer Sharon McGovern, NHLPA lawyer Paul Cavalluzzo insisted that the union did not compel Etherington to participate in a cover up.

“Mr. Etherington was fully aware of the sensitive nature of the information relating to the investigation the NHLPA was conducting at the time, as well as the importance of maintaining confidentiality of the personnel process relating to Mr. Frank in which the NHLPA was engaged, and of which Mr. Etherington was repeatedly advised,” Cavalluzzo wrote. “He was, in any event, provided only the mildest of admonishments by NHLPA management for his indiscretion (he was told that ‘loose lips sink ships’) which, in the circumstances, was an entirely appropriate response.”

Etherington left the union in February 2019 after his attorney advised the NHLPA that he would be filing a constructive dismissal claim.