JUNIOR HOCKEY LAWSUIT
Langley player puts face on dispute
Lukas Walter is an unlikely labour agitator — certainly no Ginger Goodwin, B.C.’s legendary advocate for workers’ rights murdered a century ago.
Yet the 23-year-old from Langley is the proposed representative plaintiff in class-action lawsuits launched against major junior hockey teams and the Canadian Hockey League — key springboards to the NHL.
“I think they need to clean the league up,” Walter said in an interview. “In Saint John (N.B.), I was getting $500 a week. Out here, I was getting $250 a month. It’s a little bit of nonsense when it’s the same league.”
Former and current players are seeking millions of dollars for lost wages because they were treated as indentured labour rather than workers with rights.
Surprisingly, the B.C. Liberal government passed an order-incouncil in February to indemnify the league’s six B.C. teams, declaring the players “studentathletes” and therefore ineligible to receive the minimum wage or the protection of the Employment Standards Act.
Yet these 16- to 20-year-olds play for teams, some of which earn huge profits.
The provincial cabinet decision prejudges the issue before Alberta and Ontario courts and runs counter to a 2000 Tax Court ruling in Manitoba that said the players and the owners of these teams have an employee-employer relationship.
It also belies Walter’s emblematic experience — a young man who finished high school, chasing a dream of making the big time.
He said current players involved in the suit are reluctant to identify themselves for fear of repercussions, either of being told not to dress, being traded, or being sent down to a lower-tiered league.
The Alberta judge handling the case on Thursday found such concerns “genuine and reasonably based.”
“These teams have so much power and influence,” Walter explained.
“If you are on the team, you don’t want to be co-operating with someone putting the owners in this position. A lot of players also have agents, and it’s not the best career choice to go along with the lawsuit.”
After playing for the North Delta Devils of the Pacific Junior Hockey League, at the age of 18 in September 2011, Walter signed a standard Western Hockey League contract with the Tri-City Americans, of Kennewick, Wash., owned by Top Shelf Entertainment, Inc. To play in the U.S., he had to obtain a work permit — B.C. cabinet take note!
He received US$50 a week and was billeted with a family paid by the team and supplied with meat from a team sponsor. He had a 10 p.m. curfew.
He was told the monthly stipend was the league standard and could not be increased.
What Walter was expected to do is testament to the discipline and arduous life of a professional athlete, and the master-slave-like relationships.
“While I was playing in games, training, participating in practices, travelling, and attending promotional events for the Americans and (later with) the (Saint John) Sea Dogs, I was required to follow all requests, directions, or in effect orders from various staff members of the team, including the head coaches, general managers, assistant coaches and the assistant general managers,” he explained.
“If I did not, I would risk being dismissed from the team. We were also subjected to randomized drug testing.”
At promotional events, he added, “I was expected to stay and interact with fans, season ticket holders and sponsors until told by the assistant general manager or the general manager that I could leave.”
Walter played for the Americans for two seasons.
“Throughout the two seasons I had amassed a debt to my parents of approximately $4,000 per season because I relied on them to purchase day-to-day items like additional food, cellphone bills with an international calling plan, and gas for my own vehicle which I drove in the 2012-2013 season,” he explained.
“In the 2012-2013 season, because I had the vehicle, the Americans provided me with an additional $20 every two weeks … (which) was insufficient to cover my gas expenses associated with team-related events such as attending practices, games, or promotional events.”
Walter received his stipend in the form of a $90 cheque, gross pay of $100 minus a deduction of about $10 that he believed was for U.S. income tax. “Although I requested a tax slip or receipt from the Americans for those deductions, I have yet to receive it,” he said. Walter estimated he worked about 40 to 45 hours a week for each team, but the Sea Dogs paid him more.
“For the 2013-2014 season when I played for the Sea Dogs, I would also receive a cheque every two weeks of approximately $950 after deductions were taken for income tax, CPP contributions and EI premiums,” he said. “This cheque was always the same, no matter how many hours I worked or if I was required to practice on a statutory holiday.”
He never received overtime, vacation or holiday pay.
“When the paycheques were handed out, there was generally a rumbling throughout the lockerroom that the pay was a pittance. Although these complaints were made between teammates, no one would say anything to the coach or team management out of fear that they would be cut from the team or traded.”
At the end of the tax year for 2013, the Sea Dogs issued him a T4 and they provided him with a Record of Employment, describing him as an employee whose occupation is listed as “Hockey Player”. “Student-athlete?” As part of his WHL contract, Walter also transferred the rights over the use of his image to the team and the leagues.
“I own and play the NHL video game series from EA Sports,” he said. “In the game, players can choose various teams to play, including teams in the CHL-affiliated leagues. My name and photograph appear in three versions of the game, NHL 2012, NHL 2013, and NHL 2014. Despite my image being used in the video game, I did not receive any remuneration for the use of my image, and in fact had to pay $69.99 for the video games myself.”
He estimated in the 2011-2012 season, the Americans earned US$3.3 million from ticket sales; the Sea Dogs about $2 million.
All teams sell merchandise — T-shirts, hoodies, mugs, hats, replica jerseys and other souvenirs. There is also revenue from concessions, TV rights, the licencing of images, corporate sponsorships, profits from the world junior tournament, etc.
Paying a minimum wage would cost most teams about $250,000 a year.
Today, Walter isn’t playing hockey. He’s working with his dad in the family’s exotic meat and butchering business.
“The bottom line is, you know, I just think the suit is going to be the best for the future of the league,” Walter said. “It’s a great place, but there are all these things that need fixing and whatnot. And you essentially need it to be more fair for everyone across the league.”
Every day my inbox overflows with generous helpings of good news press releases from the B.C. Liberal government.
This is especially true where Premier Christy Clark herself is involved. Clark styled herself as the jobs premier and seldom misses an opportunity to trumpet how she’s created employment here, preserved it there.
That’s something to keep in mind when drawing conclusions about how the Clark government handled the news it had waived the minimum wage standard for players on six B.C. teams in the Western Hockey League.
The Liberals made the change after extensive lobbying from the league, which was facing a court challenge on the failure to pay minimum wage and concern about economic pressures on its teams were they obliged to pay up.
The Liberals bought the argument, but did so in the quietest fashion. The waiver was approved by cabinet order on Feb. 15, with no followup press release nor much else to draw attention to what they’d done.
All of that led to a telling exchange with Labour Minister Shirley Bond this week, after the paperwork documenting the lobbying came into possession of Rob Shaw of The Vancouver Sun.
Bond insisted the government’s rationale turned on a matter of principle, namely the proper status of amateur athletes.
“It’s interesting to want to talk about minimum wage,” she told Shaw on Thursday, “but for us there’s a much more fundamental issue at stake here and that’s about whether players who play major junior hockey should be considered employees.”
She ventured to guess the public would reach the same conclusion as the Liberals: “British Columbians would see the players of major junior hockey in this province as amateur athletes and not employees.”
She may well be right. But her government did not consult the public before making the call. It simply exempted the league with the stroke of a pen.
Still, Bond bristled at the suggestion there was anything secretive about the way she and her colleagues handled the news.
“An order in council was published in February,” she said. “I participated in comments on The Sports Network. The entire policy was communicated to parents and players across B.C. We have it posted on the employment standards branch. We don’t do a press conference for every single exemption we make or every single issue we deal with.”
No, they don’t. It is matter of choice, but a difficult one to explain in these circumstances, given what Bond said about the importance of the WHL to her hometown of Prince George and the league’s five other B.C. communities of Kelowna, Kamloops, Cranbrook, Vancouver and Victoria.
“Let’s be clear — the WHL does bring spinoff benefits to communities across the province. I come from a hockey family and have two junior hockey teams in my community and I see the spinoff benefits, and for anyone to suggest that there are not challenges to operate a WHL team, that is likely quite inaccurate,” she said.
Not that the government performed an independent review before accepting the league’s claims that one or more teams might go under. “I did not do a financial analysis,” Bond said, such information being “proprietary.” But neither did the Liberals insist on seeing the books as a quid pro quo for the cabinet exemption.
The Liberals did, however, substitute some protection for the players by enshrining a requirement for a scholarship package in the cabinet order.
“To be fair,” she challenged the Sun reporter, “I certainly hope this article is going to be written in the context of other jurisdictions having discussed this, they did a similar exemption — except British Columbia went, to the best of my knowledge one step further, by requiring the WHL to put in a legally enshrined scholarship package.”
Since the minister brought up other jurisdictions, let’s review what happened in B.C.’s neighbour to the south. Washington state last year adopted a similar waiver for four WHL teams in Everett, Spokane, Tri-Cities and the Seattle suburb of Kent.
But there the matter was debated publicly in the state legislature before being passed by a margin of 91-7 in the house of representatives and by 41-1 in the state senate. The exemption was then signed into law by Gov. Jay Inslee, whose office circulated a picture of the signing ceremony with Inslee flanked by league officials.
Had the Liberals aired the matter publicly in B.C., the result might well have been the same, given the popularity of sports in general and hockey teams in particular.
Indeed, one could readily envision Premier Clark embarking on a six-city tour to advertise how her government had “saved” the local hockey team and all that entailed in terms of jobs and benefits to the community.
Instead, she and her government played the news low-key. As to why, I would note how back in February, the B.C. Liberals were also under pressure to increase the minimum wage, then approaching the lowest in the country. They would do so grudgingly later in the spring, boosting the rate by 40 cents to $10.85 an hour.
But in the midst of all that controversy, I’m guessing they were loath to highlight how they were exempting a bunch of for-profit sport teams from paying the minimum wage altogether. So they decided to do it on the sly, hoping to attract as little attention as possible. And that is pretty much how things played out.
The Liberals bought the argument, but did so in the quietest fashion. The waiver was approved by cabinet order on Feb. 15, with no followup press release nor much else.