NHL salary arbitration is a tool available to settle some contract disputes. The player and team each propose a salary for the coming season, and argue their cases at a hearing. The arbitrator, a neutral third party, then sets the player's salary. Most players must have four years of NHL experience before they are eligible for salary arbitration (the term is reduced for those who signed their first NHL contract after the age of 20). The process is used by restricted free agents, because it is one of the few bargaining options available to them.
The deadline for players to request salary arbitration is July 5, with cases heard in late July and early August. A player and team can continue to negotiate up until the date of the hearing, in hopes of agreeing on a contract and avoiding the arbitration process.
Teams can also ask for salary arbitration. But a player can be taken to arbitration only once in his career, and can never receive less than 85 per-cent of his previous year's salary. There are no such restrictions on the number of times a player can ask for arbitration, or the size of the salary awarded. A decision must be made within 48 hours of the hearing. When the decision is announced, the team has the right to decline, or "walk away" from the award. If the team exercises this right, the player can declare himself an unrestricted free agent.
Salary Arbitration Proceedings
Every arbitration hearing begins at 9:00 a.m. EDT with the side who filed presenting their case first, followed by the other party. The same order continues for the ensuing rebuttals. Each party is allowed at most 90 minutes total, and they can allocate that time as they wish between their opening arguments and rebuttal.
The filing party is entitled to an additional 10 minutes for surrebuttal only if the opposing side brings up new issues or comparable players (those who are similar in statistics and game, and potentially in contract terms) in their rebuttal.
The evidence that can be used in arbitration cases:
The player's "overall performance" including statistics in all previous seasons.
Injuries, illnesses and the number of games played.
The player's length of service with the team and in the NHL.
The player's "overall contribution" to the team's success or failure.
The player's "special qualities of leadership or public appeal."
The performance and salary of any player alleged to be "comparable" to the player in the dispute.
Comparable players (an arbiter cannot deem another player comparable unless he has been mentioned by one of the parties)
Evidence that is not admissible:
The salary and performance of a "comparable" player who signed a contract as an unrestricted free agent.
Testimonials, video and media reports.
The financial state of the team.
The salary cap and the state of the team's payroll.
Contracts of players not mentioned as comparable players
Past contract offers or negotiations between the player and the team
Arbitration Decisions and Awards
Once an arbitration hearing comes to a close, the arbiter must come to a resolution within the next 48 hours. When his decision is made, there are four key points that must be included: the term of the contract (generally one year, occasionally two years), the salary, any minor league clauses and salary (the latter if applicable), and an explanation of the decision as well as which comparable players were used in consideration.
The team then has an additional two days to consider the ruling before either signing the player to the arbiter-imposed contract or choosing to walk away, leaving the player as an unrestricted free agent.
How NHL Teams and Players can Avoid Arbitration
The preference on both sides of the negotiating table is generally to reach a deal before the scheduled arbitration hearing date, and more often than not that is exactly what happens. From 2007 through 2009, 67 players had filed but only 14 had actually presented their case before an arbiter.
Edited by AriGold, 14 July 2012 - 09:17 AM.