The National Hockey League (“NHL”) is being challenged to reconsider their approach to youth hockey across the United States and Canada through a newly proposed class action case. The case alleges youth hockey leagues of anti-competitive collusion which has unlawfully restrained players from their own decision-making.[2] The complaint claims this collusion has created “a system that deprives these Players of freedom of choice, freedom of movement, and freedom to play for the club of their choice.” [3]
On February 14, 2024, two former players as part of The World Association of Ice Hockey Players Unions North America Division filed an over 100 page complaint in the United States District Court for the Southern District of New York.[4]The case accuses the NHL, the Canadian Hockey League (“CHL”), the Ontario Hockey League (“OHL”), each of the OHL-member clubs, the Western Hockey League (“WHL”), each of the WHL-member clubs, the Quebec Maritimes Junior Hockey League (“QMJHL”), and each of the QMJHL-member clubs for their treatment towards junior players.[5]The case, World Association of Ice Hockey Players Unions North America Division et. al. v. National Hockey League et. al., alleges the leagues of allowing “systematic exploitation and abuse” of junior players in over 140 affiliated clubs.[6]
The complaint focuses on three main issues that have contributed to an anticompetitive alliance. First, the leagues have divided the North American market into three exclusive territories amongst the OHL, WHL, and QMJHL. [7] Second, the leagues host an involuntary draft which provides each league the exclusive rights to all players within their territories. [8] Third, they have all agreed amongst themselves to not compete for players once they are involuntarily drafted by another team. [9]
Claim 1: Exclusive Territories
Plaintiffs allege the leagues exploit teenagers by restricting their ability to pick where to play, in terms of both choosing a league or a Club.[10] The complaint alleges this as a violation of § 1 of the Sherman Act, 15 U.S.C. § 1 because there is no need for three independent leagues to have a horizontal agreement restricting the geographic market and exclusive rights to players.[11] The leagues divide the United States and Canada into geographic territories which recruit exclusively within their territory to employ players for their entire junior career, up to the age of 20.[12]
The exclusive rights to the players go beyond just the three junior leagues, they also restrict the NCAA and the NHL’s developmental leagues. Regardless of how many, if any, games a player skates in a major junior league, they forever waive their NCAA eligibility once signing a Standard Player Agreement (“SPA”) with a junior league club.[13] This agreement also prevents junior players from receiving compensation for their names, images, and/or likenesses (“NIL”), but nonetheless provides those rights to the player’s club.[14] Unlike the junior leagues, the NCAA recruits from anywhere in North America, allows players to be compensated from their NILs, allows athletes to transfer to another school, and does not trade players.[15]
Claim 2: Involuntary Draft
One of the named plaintiffs, Isaiah DiLaura, was just 15 years old when he was drafted by the Prince George Cougars, a WHL team in Prince George, British Columbia.[16] At 17 years old, he made the choice to play hockey professionally.[17] This presented him with the choice of not playing at this amateur professional level or moving 1,700 miles away, a 25-hour drive from his hometown in Minnesota, to British Columbia.[18] Despite both the CHL and the OHL having teams less than a nine-hour drive from his hometown, Minnesota players were only eligible to be drafted by the WHL.[19] Thus, DiLaura moved across the country to begin training camp and finish his last year of high school.[20]
Each league operates an involuntary entry draft for all players up to when they reach 16 years old based upon their exclusive territories.[21] The involuntary draft means Players’ exclusive rights are given to the drafting Club for the entirety of his major junior hockey career until the age of 20.[22] If a player wants to play in a comparable league, a new Club would have to pay a “player development” or “transfer” fee of up to $500,000 to his current Club, further restricting movement.[23]
Claim 3: Noncompete collusion
Due to the lack of lateral movement between leagues, the restriction of competition is reflected in the salaries provided to players. According to the complaint, WHL players are paid $250 a month, OHL players are paid $470, and QMJHL are paid a similar rate.[24] In comparison, many European prospects play in the NHL’s two development leagues the American Hockey League (AHL) and East Coast Hockey League (ECHL) instead.[25] Both leagues are represented by a CBA which for the 2023-24 season requires a minimum annual salary of $52,725 for the AHL and minimum monthly salary of $2,120 for the ECHL.[26] However, the AHL and ECHL have agreed to not compete for North American players under the age of 20 due to these junior leagues having the exclusive rights to players starting as young as the ages of 14 or 15.[27]
DiLaura was traded from Prince George to the WHL Portland Winterhawks with no notice and after only eight games and was later traded again to the WHL Swift Current Broncos.[28] After moving far from home, while still attempting to finish high school, he was also expected to play hockey full-time despite being shuffled between the United States and Canada.[29] While in Portland, he attempted to start taking college classes but was forced to stop when he was traded to a team in Saskatchewan, Canada. [30] This is vastly different to the freedom NCAA student-athletes have over their ability to choose a school without geographical restriction, involuntary draft, or no-notice trades.
Next Steps
This lawsuit follows a separate class-action filed against the CHL in 2020 regarding bullying, hazing, and abuse which discovered a “code of silence” that caused players fear of the social and actual consequences of reporting misconduct.[31] Similarly, junior players have historically feared challenging their agreements with junior leagues as it continues to be the primary feeder path to the highest level of the sport, the NHL.[32] This is what inspired DiLaura to attach his name to the lawsuit--to shed light on the exploitation and unfairness of the existing system.[33] Specifically, he took part in the suit due to the hardships that the experience placed on him as a player, and his family, due to the ambiguity of the drafting system and lack of autonomy. [34]
DiLaura’s experiences showcase how the claims within the complaint play out in the current system amongst North American junior leagues.[35] [36] This suit questions whether a complete reconstruction of the existing system or a collective bargaining agreement to help amplify junior players’ voices would be the best solution. Regardless, the current system cannot continue to exploit and take advantage of young players who are trying to pursue their dreams of playing on an NHL rink one day.
At the end of June, the NHL responded by submitting a motion to dismiss in the Southern District of New York.[37] They raise a defense of the labor relationship that the NHL-NHLPA (National Hockey League Players Association) collective bargaining agreement (CBA) represents both “present and future players in the NHL.”[38] The league argues the dispute should be worked out under its CBA rather than in courts as it relates to pay and work conditions.[39] There are no further updates at this time.
JUHI PATEL (contributing editor) is a 2L at Villanova University Charles Widger School of Law. She is a part of the Soccer Negotiation Competition Team and is interested in labor, employment, and intellectual property law. As an avid fan of hockey and F1 she hopes to one day work as in-house counsel for a professional hockey league or team.
References:
[1] Photo by Arthur Edelmans on Unsplash.
[2] Constantine Cannon LLP, New Lawsuit: NHL and Major Junior Hockey Leagues Hit with Antitrust Class Action Alleging Anticompetitive Collusion, PR Newswire (Feb. 14, 2024) https://www.prnewswire.com/news-releases/new-lawsuit-nhl-and-major-junior-hockey-leagues-hit-with-antitrust-class-action-alleging-anticompetitive-collusion-302061976.html
[3] Complaint, 3, World Association of Icehockey Players Unions North America Division et. al. v. National Hockey League, et. al., No. 1:12-cv-01066 (S.D.N.Y.
[4] See, Complaint, 1, supra note 3.
[5] Constantine Cannon LLP, In re Hockey Antitrust Litigation https://hockeyantitrustlitigation.com
[6] Tisha Thompson, Lawsuit: Junior hockey violates antitrust law, ESPN (Feb. 14, 2024)https://www.espn.com/nhl/story/_/id/39525364/lawsuit-junior-hockey-violates-antitrust-law
[7] See, Complaint, 4, supra note 3.
[8] See, Id.
[9] See, Id.
[10] See, Complaint, 3, supra note 3.
[11] See, Complaint, 94, supra note 3.
[12] See Thompson, supra note 6.
[13] See, Complaint, 63, supra note 3.
[14] See, Complaint, 7, supra note 3.
[15] See, Complaint, 73, supra note 3.
[16] Ian Mendes, Former junior hockey player who joined lawsuit claims CHL treats teens as ‘disposable’, The Athletic (Mar. 15, 2024) https://theathletic.com/5329581/2024/03/15/junior-hockey-lawsuit-chl-isaiah-dilaura/
[17] See Id.
[18] See Id.
[19] See Id.
[20] See Id.
[21] See, Complaint, 5, supra note 3.
[22] See, Complaint, 5-6, supra note 3.
[23] See, Complaint, 6, supra note 3.
[24] See, Complaint, 65, supra note 3.
[25] See Thompson, supra note 6.
[26] CBA 101, Professional Hockey Players’ Association https://www.phpa.com/site/agreements
[27] See, Complaint, 86, supra note 3.
[28] See Mendes, supra note 16.
[29] See Mendes, supra note 16.
[30] See Mendes, supra note 16.
[31] See Thompson, supra note 6.
[32] See, Complaint, 11, supra note 3.
[33] See Mendes, supra note 16.
[34] See Mendes, supra note 16.
[35] See Mendes, supra note 16.
[36] See, Complaint, 102, supra note 3.
[37] Michael McCann, NHL seeks dismissal of ‘implausible’ junior hockey lawsuit, Spotico (June 25, 2024) https://www.sportico.com/law/analysis/2024/nhl-motion-to-dismiss-chl-lawsuit-1234785513/
[38] See Id.
[39] Jon Styf & Jessy Edwards, NHL Seeks dismissal of junior leagues exploitation antitrust class action, Top Class Actions (July 9, 2024) https://topclassactions.com/legal-industry/nhl-chl-junior-leagues-hit-with-exploitation-antitrust-class-action-lawsuit/
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