What is "decertification"?

[stuckinontario]

Cut and pasted this from Darren Dreger's Twitter, but this article has to do with the differences between decertification and what would probably be the case with the NHLPA, which is disclaimer of interest (something slightly different):

http://www.huffingtonpost.com/gabriel-a-feldman/the-legal-issues-behind-t_2_b_1081107.html

Has to do with the NBA specifically, but definitely relevant.

[stuckinontario]

NVM that last post, I should've known TSN would just put up a web article detailing the whole bit. Without further ado, witness my cutting and pasting prowess!

LEGAL LOOK: A PRIMER ON NHLPA DECERTIFICATION

ERIC MACRAMALLA, SPECIAL TO TSN.CA

11/26/2012 11:53:40 AM

With talks seemingly stalled, we are hearing the NHLPA and players are considering decertification as their next option. NBA commissioner David Stern characterized decertification as triggering a 'nuclear winter.' Decertification has also been called an AK-47. It's a pretty dramatic tool and can have serious repercussions.

What is Decertification?

It's unlawful for competitors to get together and fix the marketplace. If they do so, they open themselves up to antitrust lawsuits. This applies to the NHL, because the 30 team owners are competitors and they get together and place restrictions on the NHL marketplace. Things like a salary cap, free agency restrictions and rookie pay are all on their face antitrust violations. Another thing that is an antitrust violation: the owners (as competitors) getting together and agreeing to lockout the players.

However, since these restrictions are inside the protective bubble that is the collective bargaining agreement (CBA), the NHL is protected and the players can't sue for these antitrust violations. So the CBA insulates the NHL from antitrust lawsuits.

That's where decertification comes in. It refers to the NHL players revoking the NHLPA's authority to bargain on their behalf and effectively blows up the Union.

And that leads to the important part - by decertifying, the CBA rule protecting the NHL against antitrust lawsuits may no longer apply and players are now free to sue the NHL for antitrust violations. So decertification is like the pin that bursts the protective CBA bubble.

The first antitrust violation the players would tackle in court would be to have the illegal boycott that is the NHL lockout declared unlawful and lifted.

Are Decertification and Disclaimer of Interest The Same?

No. These terms are used interchangeably but are not the same thing. Decertification refers to the players voting to no longer have the NHLPA represent it. It requires the players to vote on decertification and then to subsequently have the National Labor Relations Board validate decertification.

Disclaiming interest occurs when the Union terminates its right to represent the players. It's a less formal process than decertification and only requires the Union to renounce representation of the players. It's easier to do and it takes less time to re-form the Union afterwards.

While they are different, the net effect is the same: the Union is dissolved and the players are free to sue for antitrust violations.

Why Would the Players Decertify?

NHL players hope that the threat of antitrust litigation will pressure the NHL to settle on more favourable terms. So Unions are dissolved in these types of negotiations with a view to extracting leverage in CBA negotiations. In the short term, the threat of a lockout being lifted by way of a court order may give the NHL the incentive to consider settlement. The players could also sue for antitrust violations like the salary cap and free agency restrictions. Antitrust litigation can be a powerful weapon as it can result in the award of treble damages, which refers to three times the actual damages. Simply put, antitrust litigation may result in catastrophic monetary damages awarded against the league. We are potentially looking at hundreds of millions of dollars.

What's After Decertification?

Once the NHLPA is decertified, the next step would be for the players to file a lawsuit asking a court to end the lockout on the basis that it's unlawful. If the players are successful, the NHL would appeal the court's decision.

Ultimately, if the players win and the lockout is deemed unlawful, the NHL would need to resume operations.

Would The NHL Have Any Defences?

Expect the NHL to argue that the NHLPA's decertification is a sham. They would say that it's nothing more than an opportunistic and transparent attempt to extract leverage in CBA negotiations. Decertification is a serious move, and it should not be akin to turning a light switch on and off when it's convenient. Decertification is a far more formal process than disclaiming interest, and as a result may not be as vulnerable to a sham argument.

The NHL could also maintain that federal labor law prevents courts from issuing orders that end lockouts. And there is a precedent for that. That's what the Eighth Circuit Appeals Court ruled in the Tom Brady case, where the players were looking to have the lockout lifted. In that case, the Appeals Court said that the NFL lockout should stay in place because a federal statute called the Norris-LaGuardia Act prevents federal courts from issuing injunctions during labor disputes to end work stoppages.

This decision is important for the NHL. However, it doesn't mean that the NHL would win based on this decision. It's of limited value. While it lifted the lockout, the Appeals Court actually didn't rule on whether the lockout was legal. Had the NFL players pursued the case, it's possible that the lockout could have been declared illegal by the Court. As well, Eighth Circuit decisions are binding on courts within the Eighth Circuit – but not other courts. If the players took the lawsuit to a different circuit, they may stand a better chance.

As for this circuit talk, in the U.S., the Courts of Appeal cover their own individual circuits. For example, the Eighth Circuit Appeals Court handles cases from places like Minnesota and Nebraska.

Where Would The Players File A Lawsuit?

Well it's unlikely to be the Eighth Circuit. The first thing the players would ask for would be to have the lockout lifted and we know that the Eighth Circuit based on the Brady decision might well say no. So the key for the players would be to file the lawsuit in a circuit that is more player friendly. That means they could well file in the Ninth Circuit, which, in part, handles cases from California. This circuit is known to be more progressive and pro-player.

Could The NHL File A Lawsuit First?

The NHL could move pre-emptively - and they probably should if they feel the threat of litigation is real. By filing first and doing so in a jurisdiction that both sides are connected to, it makes it more difficult for the players to have their case heard in a sympathetic circuit like the Ninth Circuit. For the NHL, they could look to file in the Second Circuit, which handles cases, in part, out of New York. That circuit has more owner friendly decisions. In fact, that's precisely what the NBA did faced with the possibility of the NBPA dissolving itself. The NBA went to court first and did so in the Second Circuit.

So overall, the players might prefer the Ninth Circuit, while the NHL might want to head to the Second Circuit or maybe the Eighth Circuit. It will be interesting to see if a lawsuit is filed, and if so, who files first. If I'm the NHL, I'm filing that lawsuit yesterday.

What Would Be Considered A Good Win For The NHL?

If the NHL can get a Court to keep the lockout in place, that would be a big win for the league because the lockout would remain in place for an indefinite period of time. That would undoubtedly create more leverage for the league.

Imagine the opposite - the players win and the lockout is lifted. If that happens, the league would really have to look to get this settled in a hurry. The last thing it wants is to resume operations against its will.

Who Would Win In Court?

The only certainty here is uncertainty. Each side can improve the chances of success by employing a good strategy. However, the law here is sorted and complex and it's too tough to say which side is heavily favoured in court. Frankly, if this ends up in the courts no one will win. There will be losers, though, I suspect. The goodwill associated with the NHL brand will continue to erode. As a result, fans – even those in traditional hockey markets – may turn away from the game. Some may do so temporarily, while others may not ever come back. So everyone loses here – the owners, the players and the fans. Well there are potentially two winners here – lawyers and their billable hours.

If The Players Decertify Is The Season Over?

The season wouldn't be over, but it makes it more likely that there will be no hockey this season. The NHLPA and Donald Fehr are considering this option quite late, and decertification doesn't happen overnight. It can take up to 45 days. That could take us well into January. Then you have the lawsuits. That also takes time. Judges are just going to expedite things because they may be in a hockey pool. Ultimately, though, the players hope that the mere threat of decertification will be enough to get the NHL to settle on more favourable terms.

My Head Is Spinning - Is That Normal?

Totally and Completely.

So What's Next?

Let's see if the NHLPA is decertified and who files a lawsuit first.

Is There A Chance the Lockout Will End Soon?

The hope is that things do get settled in the short term. There are obvious areas of compromise, and the hope is that the sides can settle on them. This isn't 2004. Back then, the NHL business model was broken with up to 73% of league revenue going to players. Fans were more likely to indulge the league as it looked to fix its business. This time around, however, the business model is not broken and the sides are grappling over revenue share. With fans less likely to look favourably on either side, settling soon is in the best interest of all parties involved.

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

[Drybone]

I don't know much about contract law but why can't the players do as you are saying, concede defeat and accept terms of surrender and then withhold all non essential services. i.e.: play the hockey games and thats it. No photo ops, no media interviews, nothing but playing the actual game.

Players could also take more initiative (as a group) and bring in their own revenue through endorsements and sponsorship deals, thus supplementing their income to offset the "loss" they are taking by conceding defeat.

The globe & mail had an interesting article today quoting an outspoken Ryan Miller regarding decertification.

From my limited understanding, the players ass. actually enables the owners to circumvent many laws (salary cap is the one that comes to mind) which are in place to protect workers rights.

[Drybone]

Pat Quinn for new NHLPA head! Played the game and has seen the management side as well. He is a lawyer. Maybe he would throw the Canucks a bone in the process!

[Provost]

Then a court has to actually agree to the decertification itself, which is a real crapshoot because they don't like being used as a tool in labour disputes... the players would actually have to show that they really mean to decertify their union and not just having fancy legal trickery to disband one, and then restart it again under a different legal entity. The court can also easily impose a federal mediator to deal with the two parties before agreeing to allow any decertification votes. It would likely not be looked on very positively not to have tried to use a mediator yet in the process.

[Boudrias]

Well there is one objection to decertification that the courts would have coming off the table. A mediator will come in, likely flame out in a week when they realize that there isn't any common ground.... and then one of the sides will need to come up with another strategy.

The only way this gets done by a 3rd party is if the sides agreed to binding arbitration and I can't see that happening in a million years....

[Provost]

As you suggest this could be a PR strategy by either or both parties. I wouldn't take any comfort that both parties had to agree as it will become another venue for their talks. It didn't work in 2004.

I guess a positive might be that a compromise might be easier to swallow coming through a 3rd party. A ray of hope!

[Boudrias]

I am honestly at a loss to what the owner's plan is to tell you the truth. Normally I can figure stuff out from negotiations by reading between the lines of what folks are saying.

In this case I haven't seen any sign the league wants to actually be playing at all. Everything they have done has been purposefully destructive to the process. In the LR world, doing something like having the owners talk with players without informing the union is considered the height of jerkishness.

Maybe it is true that they don't really want to play before Christmas.

[Provost]

Well there is one objection to decertification that the courts would have coming off the table. A mediator will come in, likely flame out in a week when they realize that there isn't any common ground.... and then one of the sides will need to come up with another strategy.

[Boudrias]

Well... I was off by a few days there. Also, I did not see the Bettman strategy coming. I will be very interested to hear the parameters of the meeting offer between players and owners (without Bettman and Fehr).

If it is just to have the same few owners that have been in the room during bargaining... then it is useless. If it is every owner and they each have to explain why they were signing guys to contracts they never intended to honour... well then that is a little difference.

I guess Bettman's game plan is to try to show the players what sort of resolve the owners have, and try to force them into a deal. I don't see it working because it is really just rhetoric andnot really indicative of their true feelings.

[Mauii]

I think it's just a strategic move to show efforts are being made by the NHL to resolve the matter and so the NHLPA cannot not agree or otherwise be viewed as an unwilling negotiating partner, but it is all posturing on part of the NHL as it will highly unlikely result in any resolution unless the players submit to the NHL's offer in its entirety. There is no ways about it, the lock up will not be lifted unless the NHL gets what it wants without any concessions. They are not interested in negotiating. The only choice the players seem to have in the situation is a take it or leave situation. Considering the last standing agreed on CBA offered you a much greater HRR percentage, and the NHL was financially successful under those terms, I really don't see a need to change the last CBA and keep it at status quo. So, to the NHL's last CBA offer, I would opt to leave it, unless the NHL comes up with something a little closer to the old CBA.

I would have thought coming to a new CBA would only involve combing through the terms of the old CBA, review and negotiate any clauses either parties may want to amend, agree to something, then onto the next clause until they get to the end of it. It would have seemed that the last CBA only needed a bit of tweeking and not a complete overhall considering the NHL had done and had been doing pretty good under it but for a few minor things.

[Drybone]

Decertification would be devastating to any player drafted in 2013. Whether they wanted to or not, they would be drafted by a team in the NHL. I have no idea where else they would play but if they did decide to choose the NHL , they would have to go to that team.

The player would never be a UFA. They would have no rights. They would get no pension. They would simply be a business partner who gets a lousy salary or nothing. Just like it was before Alan Eagleson and expansion.

The players cant sue for their contracts because they were only payable with a current CBA , and the union cannot disband simply as an end run around Labor laws to force to sue citing they are no longer a union. . There needs to be something the union did against its members totally independent of these negotiations with the owners. Judge would throw it out a negotiation tactic.

So this idea that the union will disband is suicide for the players and embarrasing riches for the Owners. Now it would be REALLY lopsided.

The owners would allow the players to form a new union anyways as long as its 50/50 and whatever else the current deal on the table is.

[poetica]

Decertification would be devastating to any player drafted in 2013. Whether they wanted to or not, they would be drafted by a team in the NHL. I have no idea where else they would play but if they did decide to choose the NHL , they would have to go to that team.

[Provost]

Decertification would be devastating to any player drafted in 2013. Whether they wanted to or not, they would be drafted by a team in the NHL. I have no idea where else they would play but if they did decide to choose the NHL , they would have to go to that team.

The player would never be a UFA. They would have no rights. They would get no pension. They would simply be a business partner who gets a lousy salary or nothing. Just like it was before Alan Eagleson and expansion.

The players cant sue for their contracts because they were only payable with a current CBA , and the union cannot disband simply as an end run around Labor laws to force to sue citing they are no longer a union. . There needs to be something the union did against its members totally independent of these negotiations with the owners. Judge would throw it out a negotiation tactic.

So this idea that the union will disband is suicide for the players and embarrasing riches for the Owners. Now it would be REALLY lopsided.