The NHL Labour Dispute and the Common Law, the Competition Law, and Public Policy01 Jan 2004
This article develops the claim that, absent an agreement with the union, the imposition of a salary cap or punitive luxury tax would constitute an unreasonable restraint of trade, as well as a violation of section 48 of the Competition Act that the Canadian courts should enjoin. The article analyzes decisions of Canadian and other British Commonwealth courts concerning general principles of the common law as well as their specific application in the context of the sports industry. Second, the paper discusses why the same standard applies to restraints challenged under section 48 of the Competition Act. Next. the relevance and impact of collective bargaining is discussed. Finally, the paper applies these legal standards to the current NHL controversy, concluding that rigid, across-the-board salary restraints do not promote competitive balance and constitute an overbroad and inefficient means to preserve hockey in Canadian cities, avoid runious competition, or save economically marginal NHL franchises. Whatever solutions are required to solve hockey's problems, these restraints are not the answer.