Article by Canadian Class Actions Monitor, Paul Davis and Oksana Migitko McCarthy Tétrault LLP The Ontario Superior Court of Justice recently certified a case that, as reported by some media, could change Canadian hockey forever. Two representative plaintiffs, Sam Berg, a former Niagara IceDogs forward, and Danial Pachis, a former member of the Oshawa Generals,
Article by Canadian Class Actions Monitor, Paul Davis and Oksana Migitko McCarthy Tétrault LLP
The Ontario Superior Court of Justice recently certified a case that, as reported by some media, could change Canadian hockey forever. Two representative plaintiffs, Sam Berg, a former Niagara IceDogs forward, and Danial Pachis, a former member of the Oshawa Generals, will be allowed to pursue a lawsuit against the OHL and its clubs alleging that junior hockey players do not get what they are entitled to under the law, namely, minimum wages for their services on the basis that they are employees. The case demonstrates the difficulties of pursuing a cross-border class action where some members of the class reside in Canada and others reside in the United States.
Berg and Pachis’ case revolves around the “single profound question” of whether junior players are employees of their clubs and, if so, at what moment amateur athletes become professionals. 3 The plaintiffs allege that major junior players are employees because their relationships with their respective teams are identical to those between an employer operating a commercial organization and its staff. The OHL and its teams claim, in contrast, that a player is not an employee but a participant in a multi-faceted development program that focuses on athletes’ sports training, education, and character growth. The clubs’ aim is to provide young players with educational opportunities to choose a right career path both inside and outside of hockey.
The proposed class alleges that an average “allowance” or “expense reimbursement” for a junior hockey players is in the range of $50 to $600 for 45 to 65 (or more) hours of “work” per week. Although players receive benefits like access to trainers or equipment, they are not compensated for overtime, holidays, or vacations. Those who chose to reside with billet families get accommodation, as well as a compensation for groceries and living expenses. In addition, young players are provided with educational packages and some can get full scholarships covering all costs to attend colleges and universities.
The plaintiffs brought a motion to certify the action as a class proceeding on behalf of all players who played in those leagues commencing October 17, 2012 who were under the age of 18.
Justice Perell explained: The Defendants excessively responded to the certification motion with an emotive public relations pitch of their own. The Defendants portrayed themselves as magnanimous patrons and benefactors of their hockey players. The Defendants portrayed Messrs. Berg and Pachis as bitter, self-centered, and ungrateful also-rans, whose proposed class action would irreparably damage the enterprise that had been built for the players to advance their careers and their prospects to play in the professional hockey leagues.
Justice Perell resolved the jurisdiction questions against the defendant teams. In two sentences, he decided that he had jurisdiction over the claims given that the OHL contracts were governed by Canadian law and that Ontario was forum conveniens.
However, Perell J. was not satisfied that a class proceeding in Ontario was the preferable procedure to resolve the claims based on statutory employment law of Michigan and Pennsylvania. The plaintiffs argued that the employment law regimes of the three jurisdictions (Michigan, Pennsylvania and Ontario) were essentially the same respecting the question of whether an individual should be classified as an employee. Justice Perell rejected this position as “it begs the bigger question of whether the well-established common law tests for an employment relationship should be applied at all to classify the relationship between a sport’s team owner and the amateur athletes that are team members.” He observed that the players in Michigan and Pennsylvania had courts and administrative agencies available to them to decide the application of U.S. law, as opposed to an Ontario court. Justice Perell concluded:
Given the importance of spectator sports to American and Canadian culture and society … I think it befits courts on either side of the border to at least pause to question whether they should decide an issue that their sovereign neighbor would prefer to decide for itself. This is a different question than asking whether, as an aspect of the conflicts of law, an American court would enforce an Ontario class action judgment and rather asks whether a Canadian court should respect the American court’s jurisdiction to enforce its own law when it is ready to make it available.
Justice Perell therefore certified the proceeding on behalf of only the Ontario players against the Ontario teams.
B Berg demonstrates the difficulties of combining multi-jurisdictional classes in one class action, particularly international classes. The court’s approach to the question highlights that defendants may resist certification both on traditional jurisdictional arguments and through showing the potential for complications in applying foreign law on novel legal questions. Although Justice Perell expressly refused to apply principles of comity, order, and fairness traditionally associated with the law of jurisdiction, those principles seem to guide the substance of his reasoning. Judges on certification motions will have to continue to grapple with the dividing line between jurisdiction and preferability in international class actions.