In the National Hockey League, salary arbitration is a tool used by players and teams to ensure that compensation is equitable and in line with the market. It’s the subject of an entire chunk of the CBA.
Let’s check out Article 12: Salary Arbitration!
The amount of service needed to qualify for salary arbitration is laid out in Section 12.1. It’s a very familiar table, as it turns out:
|ELC signing age||Pro Years Required|
|24 or older||1|
Functionally-speaking, a player becomes eligible following the length of their entry level contract plus another year.
“Pro years” are defined in a manner consistent with how they were defined in Section 10.2 (regarding experience needed to qualify as a Group 2 free agent): 10+ NHL games played at age 18 or 19 or 10+ pro games of any kind played at age 20 or older. Signing age is defined the same as it was in Article 9 – it’s the player’s age on Sept. 15 of the year they signed, regardless of their age when they signed.
Only Group 2 restricted free agents can qualify for salary arbitration, and obviously only if they haven’t signed a new contract or offer sheet.
Player elected arbitration
Player elected arbitration is the most common type within the NHL system. If a player meets the eligibility requirements, their agent submits a form to Central Registry before the filing deadline and boom, they’re on the list. (Per Section 12.2.)
Club elected arbitration
Club elected arbitration is rarer because there are more hoops to jump through. The hoops are laid out in Section 12.3. There are two situations where a club can elect to file for arbitration:
- If a qualifying RFA had an NHL salary of $1.75 million (subject to inflation, the amount was $2.2 million in 2019) or more in the final season of their deal, the team can file for arbitration rather than submit a qualifying offer. The player cannot be awarded less than 85% of their previous salary and may still negotiate offer sheets with other teams.
- If a qualifying RFA has been given a qualifying offer hasn’t filed for arbitration, the club can elect to do so. But their offer in arbitration has to be equal to or higher than what the player’s NHL salary was in the final season of their deal.
A player can only be subject to club elected arbitration once in their career. A team can only file for club elected arbitration twice in a year.
Scheduling and whatnots
The NHL and the NHLPA jointly agree on eight arbitrators (per Section 12.6). In December, they jointly agree on seven dates for arbitration hearings. Once the filings are in requesting hearings, the two sides flip a coin and then go down the arbitration list assigning a player to a time slot – they alternate, with the toss winner going first (e.g., if the NHLPA wins they assign the first player, then the NHL, and so on) (per Section 12.7). Teams can’t have two cases in a day, nor can agents or arbitrators. But everything else is fair game. All cases have to begin at 9 a.m. ET, unless agreed upon otherwise.
So what happens?
The CBA also lays out the agreed upon procedure for arbitration hearings.
- 48 hours before the hearing, each side (player and club) will prepare a written brief (of a maximum of 40 pages) laying out their case and their requested compensation. They submit them to the arbitrator and exchange them with each other.
- Whichever party filed for arbitration, the other shall choose term (e.g., if player filed, the club chooses) of either one or two seasons. But if a player is a year away from qualifying for Group 3 (unrestricted) free agency, only a one year term can be chosen.
- Each side has a maximum of 90 minutes to present (combined) for their case and their rebuttal case. Witnesses are allowed to be called. (A hearing is set to be a maximum of three hours in duration.)
- Here’s what can be used as evidence:
- A player’s performance, including offensive and defensive NHL official statistics
- The number of games played and injuries/illnesses
- Length of service in the league and with the club
- Contribution to the teams success or failure in the preceding season
- “Any special qualities of leadership or public appeal not inconsistent with the fulfillment of his responsibilities as a playing member of his team”
- The performance of any player(s) that is alleged to be comparable to the player
- The compensation of any player(s) that is alleged to be comparable to the player
- If arbitration is player elected, they present and rebut first. If it’s club elected, the club presents and rebuts first.
- Arbitration verdicts are e-mailed to both sides within 48 hours of the hearing’s end.
If an arbitration award is issued above a certain amount – it was $3.5 million in 2013 and scaled to $4.4 million in 2019 – a team can “walk away” from the award. If the award was for a two year contract, it becomes a one year contract. If the award was for a one year contract, the player becomes a free agent.
Teams can only walk away from an arbitration award one fewer time than the number of awards it has. (Once for one award, once for two awards, twice for three awards, etc.)
Teams cannot walk away from an award in club elected arbitration. (Another reason why they’re so rare.)