Monday, January 24

A lose-lose proposition

It is normal for a collective agreement to have win-lose propositions. Some clauses clearly favour management at the expense of employees, and some perks for workers clearly hurt a company's bottom line.

But collective agreements should not have lose-lose propositions. If management and workers can both do better by eliminating a provision in a collective bargaining agreement, there's no logical reason for the clause to be there in the first place.

This brings me to the funny world of professional hockey, where there is a bizarre provision in the National Hockey League's collective bargaining agreement. Formally, it's clause 13.23 of the agreement:
In the event a professional or former professional Player plays in a league outside North America after the start of the NHL Regular Season, other than on Loan from his Club, he may thereafter play in the NHL during that Playing Season (including Playoffs) only if he has first either cleared or been obtained via Waivers. For the balance of the Playing Season, any such Player who has been obtained via Waivers may be Traded or Loaned only after again clearing Waivers or through Waiver claim.
Informally, it's called the Reijo Ruotsalainen rule, named after a Finnish defenceman who won a couple Stanley Cups with the Edmonton Oilers during their dynasty years in the late '80s and early '90s. Apparently, Edmonton's general manager would send Ruotsalainen over to Europe to play most of the season against inferior competition, and he'd return to Edmonton in time for the playoffs, fresh from an easier schedule. To prevent this, the NHL implemented a rule where any team who signs a player from overseas has to give other teams the chance to steal them away for free first.

This is a stupid rule for three reasons. First, it doesn't accomplish what it was trying to prevent. The rule exempts players sent on loan to Europe. So NHL teams could still send players to fringe hockey leagues overseas (such as the Asia Ice Hockey League, Great Britain's Elite League or the Australian Ice Hockey League) to spare players a grueling North American season and bring them back well-rested for the playoffs.

Second, it's bad for the employer (the NHL and its teams). The NHL benefits when it can woo away top players from competing leagues, such as Russia's Kontinental Hockey League. But teams have no incentive to go out and recruit players from overseas when they know there are 29 other teams that can just snatch them away. Instead, the rule creates a disincentive for NHL teams to bring over top talent. Ultimately, that will hurt demand for its product.

Third, the Ruotsalainen rule is bad for players. If a player is thinking about leaving Europe for the NHL, they'd probably like to know who my new employer would be. Signing a contract with the team of their choice is meaningless, since any other team can then snatch them up. The player still gets the salary they signed on for, but they could end up with a team they would hate playing for. So from a players' perspective, this rule can't be good.

This ridiculous rule has come into play a few times this season. The St. Louis Blues lost Marek Svatos and Kyle Wellwood to competing teams only hours after luring them away from Russia. And star goaltender Evgeni Nabokov ditched his Russian team for a chance at winning the Stanley Cup with the Detroit Red Wings, only to find out he had been snatched by a perennial NHL bottom feeder, the New York Islanders. Now, there's a messy situation because the Islanders are waiting for Nabokov to arrive, but he is not answering the team's phone calls.

The rule will just deter players from leaving Europe, and NHL teams from trying to sign them. It's a lose-lose proposition that the NHL and its union should re-examine in their next round of collective bargaining.