Friday, July 08, 2005

Why Does The NHLPA Exist?

Why does any union exist? It exists to help its members achieve better salaries, benefits, working conditions etc. The NHLPA is no different. It exists to help the NHL players in getting better salaries, benefits, working conditions etc. So how is it doing?

The players have been locked out for a season. During that time the NHLPA has been negotiating a new Central Bargaining Agreement with the owners. This CBA looks to be almost completed. It looks as though there will be a salary cap, which is in many cases less than teams had previously been paying under the old CBA. It looks like salaries will be tied to revenue of the owners. It looks like there will be strong reductions in entry level pay through strict salary restrictions. It looks like 10-20% of player salaries will be help in escrow as insurance in case the payroll of the league is larger than a defined percentage. It looks like current player contracts will be rolled back by 24% financially. In short it looks like the owners wrote the CBA. It looks like the players gave on every major issue. It looks like the NHLPA is not doing its job to get better salaries, benefits, working conditions etc.

It has been said that the NHL owners needed a new CBA to protect themselves from themselves. Under the old CBA they were allegedly spending themselves into bankruptcy. They couldn't stop themselves from doing this. Somehow they were incapable of setting a budget and sticking to it. The NHLPA is inadvertantly helping out the owners instead of the players that they allegedly represent.

In fact, the NHL owners might need the NHLPA more than the players do. A collective bargaining process allows the owners to avoid anti-trust legislation. Under the collective bargaining agreement, the players agree to give up the right to chose to work in whichever city they want. They chose to allow themselves to be drafted by any team with no choice in the matter. They chose to allow themselves to be traded whenever their current team feels it is fit. They chose to subject themselves to salary caps and many other restrictions. Without a collective bargaining agreement, such conditions would be illegal by anti-trust laws. If the new CBA is as expected, the owners need the NHLPA more than the players.

So why does the NHLPA exist? Why doesn't it decertify? This would lead the players free to negotiate contracts without any restrictions like salary caps with any team that would want to offer them. Could this be better than the current situation? Quite possibly. I think the players are in general scared to "rock the boat". Playing in the NHL under some CBA (even a bad one) feels safer then decertifying the union. Even if it might lead them to increasing their earning with no NHLPA.

I think decertification of the union is a real possibility, but it may not occur for a while. If the labor situation does not improve under the new CBA, it will become seriously considered.

Tom Benjamin has a very good discussion on this topic.

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