Dylan Koh
Contract negotiations in professional sports leagues can be a grueling process for team management and players. While fans often see headlines of star players resigning last minute or dramatically leaving in free agency, they aren’t privy to the behind-the-scenes negotiations. Of the tools that professional sports leagues offer to expedite these negotiations, salary arbitration stands out as a unique adversarial form of conflict resolution. However, this process is not common. Major League Baseball and the National Hockey League are the only major North American professional sports leagues that provide salary arbitration.
In its most simple form, salary arbitration is the process of appearing before a third-party arbitrator to determine the salary amount of a player’s upcoming contract.[1] Turning to the NHL, section 12 of the Collective Bargaining Agreement (CBA) between the league and the NHL Players Association (NHLPA) lays out the procedures for salary arbitration.[2] Either the player or the team can file for arbitration. However, filing does not prohibit continued negotiations; both sides can agree to a new contract until the hearing. Two days before the hearing, the parties exchange briefs which lay out their arguments and the requested salary.[3] The briefs have a 40-page limit excluding indices, tables of contents, and exhibits and often include player comparisons and evaluations of the player’s effectiveness and character.
At the hearing, parties present their requested salary and arguments. Evidence that can be introduced include a player's performance/statistics, injury history, length of service, leadership qualities and contribution to the team's results.[4] There are also opportunities for witness testimony and cross examination.[5] After hearing arguments, the arbitrator determines the player’s salary within 48 hours after the hearing’s conclusion. There are few opportunities for appeal. In team-elected arbitration, the ruling is binding. In player-elected cases, managers can choose to walk away from the deal entirely and send the player to unrestricted free agency.[6]
From a procedural perspective, there are no obvious issues that disproportionately favor one side. This fairness can be attributed to the similarities between a traditional civil litigation’s procedure and that of the NHL’s salary arbitrations. For example, the parties have equal opportunities for oral argument, brief submission, and witness testimony all agreed upon in the CBA. One potential issue, however, is representation. Management is often supported by wealthy owners with greater access to resources than an individual player. The CBA corrects for this imbalance by requiring the NHLPA to represent a player unless “the NHLPA chooses to delegate its authority in whole or in part, with the Player's consent, to the Player's representative.”[7] Another potential issue is the lack of player appeal. While teams can walk away after a player-elected arbitration, players do not have the same option after team-elected arbitration.[8] The inherent power imbalance between management and players can explain this difference. Management reserves significant power over playing rights as employers. The NHLPA likely understands this dynamic and thus hasn’t pushed for greater reform for player appeals.
Despite the fairness of arbitrations, players rarely elect to enter salary arbitration. For example, in the summer of 2024, only one player elected to enter arbitration.[9] There are multiple explanations for this trend. First, parties are likely to be close enough in negotiations that the threat of arbitration can force greater compromise. Second, the negative publicity of arbitrations can put a spotlight on both parties. Although in theory arbitrations are equitable solutions to contract disputes, reporters and fans often speculate on bad relationships or a player’s arrogance. Finally, the fallout of arbitrations can be significant. Arbitrations are ultimately adversarial procedures and can weigh heavily on players. Management’s arguments often involve citing flaws like character issues or poor performances in the postseason. A recent example is goaltender Jeremy Swayman’s contract dispute with the Boston Bruins. After his arbitration in the summer of 2023, Swayman was interviewed for an NHL docuseries where he recalled his experience. “[management’s] job is to help the management side and to rip players, and hearing that you’re not worthy of what you think you’re worthy of, that was hard to hear. You don’t forget what was said. I wrote ’em down and I looked at ’em the other day and I had a couple of checkmarks. My biggest knock was how I wasn’t trustworthy in the playoffs. Check.”[10] The emotional consequences of arbitration can explain the pattern where even after arbitration, players often do not stay with their teams. According to Craig Custance of the Athletic, in “10 years worth of results provided by the NHLPA, 27 players have gone to an arbitration hearing since 2009. Within three years, 21 of those players were on different teams.”[11]
The reality of salary arbitrations is they are a rarely used but effective tool for resolving contract disputes. However, any adversarial process between an organization's management and a player is bound to cut deep wounds. It remains to be seen if the NHLPA will fight for future reforms to make salary arbitration more accessible to young players in the next collective bargaining agreement.
[1] Bryan Murphy, NHL salary arbitration, explained: How restricted free agent contracts are settled by a third party, The Sporting News (July 5, 2023), https://www.sportingnews.com/us/nhl/news/nhl-salary-arbitration-explained-restricted-free-agent/z1hcqjbkbgrxyxpptu5snx27 [https://perma.cc/CH6V-XDP3] [https://web.archive.org/web/20241108190758/https://www.sportingnews.com/us/nhl/news/nhl-salary-arbitration-explained-restricted-free-agent/z1hcqjbkbgrxyxpptu5snx27].
[2] National Hockey League Players’ Association, Collective bargaining agreement between National Hockey League and National Hockey League Players’ Association (Feb. 15, 2013), https://cdn.nhlpa.com/img/assets/file/NHL_NHLPA_2013_CBA.pdf [https://perma.cc/2DJ7-HTGD].
[3] Shayna Goldman, How does NHL arbitration work? What to know about the process that almost never happens, N.Y. Times: The Athletic (August 9, 2022),
https://www.nytimes.com/athletic/3487717/2022/08/09/nhl-arbitration/ [https://perma.cc/F4BZ-GN4J] [https://web.archive.org/web/20241108191811/https://www.nytimes.com/athletic/3487717/2022/08/09/nhl-arbitration/].
[4] Supra note 2, at 63.
[5] Id.
[6] Supra note 2, at 69.
[7] Supra note 2, at 63.
[8] Supra note 2, at 69.
[9] Brian La Rose, 2024 Salary Arbitration Tracker, Pro Hockey Rumors (July 27, 2024), https://www.prohockeyrumors.com/2024/07/2024-salary-arbitration-tracker.html [https://perma.cc/T9VU-C5JN] [https://web.archive.org/web/20241108192048/https://www.prohockeyrumors.com/2024/07/2024-salary-arbitration-tracker.html].
[10] Nick Goss, Swayman sheds light on 2023 arbitration process in new NHL docuseries, NBC Sports (Oct. 3, 2024) https://www.nbcsportsboston.com/nhl/boston-bruins/jeremy-swayman-2023-arbitration-nhl-amazon-doc/653861/ [https://perma.cc/J5GH-UBKX] [https://web.archive.org/web/20241108231130/https://www.nbcsportsboston.com/nhl/boston-bruins/jeremy-swayman-2023-arbitration-nhl-amazon-doc/653861/].
[11] Craig Custance, If a player makes it to an arbitration hearing, history suggests he’s likely a goner, N.Y. Times: The Athletic (July 19, 2019), https://www.nytimes.com/athletic/1085655/2019/07/19/if-a-player-makes-it-to-an-arbitration-hearing-history-suggests-hes-likely-a-goner/ [https://perma.cc/D2W7-CUE7] [https://web.archive.org/web/20241108231533/https://www.nytimes.com/athletic/1085655/2019/07/19/if-a-player-makes-it-to-an-arbitration-hearing-history-suggests-hes-likely-a-goner/].