Should Canadian Hockey League players be considered employees? Or are they independent contractors? Or simply amateur athletes? These are the questions that a class-action lawsuit filed recently on behalf of a group of players against the CHL seeks to answer. The lawsuit seeks $180 million in outstanding wages, vacation, holiday and overtime pay, and includes a request for punitive damages.
The CHL governs three regional hockey leagues: the Western Hockey League, the Ontario Hockey League, and the Quebec Major Junior Hockey League. These leagues are seen as the most important training grounds for the National Hockey League. When an individual is recruited by a team, they are made to sign contracts that pay them between $35 and $125 dollars per week, and players often spend somewhere in the neighbourhood of 40 hours a week devoted to the team.
The CHL deems the players’ weekly earnings an “allowance”. The lawsuit frames the players as employees, and therefore deserving of at least minimum wage, as well as other employee benefits like overtime, vacation, and holiday pay. In response to the lawsuit, the CHL’s commissioner David Branch stated that the players were neither employees nor independent contractors, but rather that they were amateur student athletes. Prior to this, the League had always contended that the players were indeed independent contractors – a designation that would still increase the obligations of the League vis a vis the players, though not as significantly as an employee designation.
The characterization of the players as amateur is a tricky one; by definition, an amateur is one who competes or engages in a sport on an unpaid basis. And while it may be true, as the lawsuit confirms, that the players receive very little in the way of financial compensation, the same cannot be said of the league itself. The leagues that the CHL runs sell tickets to their games, sell sponsorships of their teams to corporations, and at the end of the day make significant profits on the backs of their players – who, remember, receive what is (perhaps meaningfully) identified as an allowance. The amateur designation, from that angle, seems a little far-fetched.
So are they employees? Or independent contractors? Or neither? At first glance, the players seem to meet much of the criteria that constitute an employee designation: they work full-time for the organization, they do not provide services for other entities, they perform a key role and work in the core area of the business, they receive a fixed amount of remuneration, and they receive training from the organization. To determine a true independent contractor, one has to assess whether the individual is “in business for herself”, and apply the classic four-fold test from Montreal v. Montreal Locomotive Works: what is the degree of control over the work, does the individual own the tools required to perform the work, does the individual have a chance of profit, and does the individual run the risk of loss. Ultimately, do they work for themselves, or for a superior?
But back to the players. Save for the fact that they don’t actually receive many of the benefits of being an employee, they sure seem like employees. They provide services, have very little chance of profit or loss, and work only as directed by the organization. There could be an argument that they control their talent and therefore, they control the tools of their work, but that is a stretch.