The Canadian Football League Players’ Association v. The Hamilton Tiger Cat Football Club (2003) Corp.
CITATION: The Canadian Football League Players’ Association v. The Hamilton Tiger Cat Football Club (2003) Corp., 2013 ONSC 5483
DIVISIONAL COURT FILE NO.: 339/13
DATE: 20130829
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
The Canadian Football League Players’ Association
Applicant
– and –
The Hamilton Tiger Cat Football Club (2003) Corp.
Respondent
Chris G. Paliare, for the Applicant
Stephen J. Shamie and Mitchell Smith, for the Respondent
HEARD: August 22, 2013
PARDU J.
[1] The Applicant, the Canadian Football League Players’ Association (“CFLPA”), seeks leave to bring an application for judicial review before a single judge of the Divisional Court pursuant to s. 6(2) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1. It submits that the case is one of urgency and that the delay required for an application to the Divisional Court is likely to involve a failure of justice.
[2] The CFLPA asks this court to quash a decision of an arbitrator holding that Chris Williams, a football player, was contractually obligated to play a third season for the Respondent, the “Tiger Cats”.
[3] All of the above takes place in the context of a collective agreement.
[4] Williams signed a contract in the form prescribed by the collective agreement agreeing to play for the Respondent for the 2011 and 2012 seasons. The contract granted the Respondent an option to require him to play for a third year. The Respondent violated the collective agreement by negotiating this contract with Brian Cox, a contract advisor for Williams. The collective agreement required the Respondent to deal only with contract advisors registered with the Applicant, to notify the Applicant if it was approached by an unregistered contract advisor on behalf of a player, and to note the name and registration number of the registered contract advisor on any contract ultimately signed. The Respondent failed to do each of these.
[5] The Applicant submits that this breach of the collective agreement made the contract with Williams, including the option for a third year, voidable.
[6] In addition, the Applicant submits that the purported exercise by the Tiger Cats of the option was so unclear as to be ineffective.
[7] The Respondent argues that leave should not be granted on the ground of urgency and that no failure of justice would result if this matter were heard in the ordinary course. The Respondent submits that the arbitrator had discretion as to the remedy to be afforded for breaches of the collective agreement, and that deference should be given to his decision declining to declare the contract void. The Respondent further submits that the letter given to Chris Williams clearly notified him that the Tiger Cats were exercising their third year option.
Leave
[8] Chris Williams is an exceptionally skillful football player. He wishes to pursue opportunities with the National Football League. The NFL season opens on September 5, 2013. If he is obligated to play for the Tiger Cats this season, he will miss a season with the NFL. If he misses this season with the NFL, he will be exposed to the risk of an injury which could close the door on such an opportunity in the future. He is of relatively small stature; the risk to him of injury is heightened. The loss of one season with the NFL could have catastrophic consequences. If by reason of a one year delay he does not complete three years with the NFL, he would not be entitled to an NFL pension. The salary difference is enormous. His salary with the CFL in his last year was $48,000. The minimum salary for an NFL player is $405,000. His chances of securing a position with an NFL team would be greater if he could be there for training camp now in progress. There is evidence that the average length of a football player’s career in the CFL is only three years.
[9] The Respondent takes the position that Williams should have already reported to work for his third season with the Tiger Cats.
[10] I am of the view that this is a case of urgency and one in which delay would likely result in a failure of justice. I grant leave to proceed with the application before me. This is a real time dispute. Where does Chris Williams go work right now? The outcome has significant consequences for him in the short and long term. The time taken by the CFLPA, after the award of June 12, 2013 to make a decision to seek judicial review by application filed July 31, 2013 is not so lengthy as to disentitle the Applicant to leave.
[11] This is not a case where only money is at stake. Williams’ livelihood and future are on the line. The Respondent submits that the merits of the dispute are also a factor to be weighed in the balance in determining whether to grant leave. I agree. This factor favours the Applicant for reasons that I will outline.
Background
[12] The CFLPA has negotiated a detailed collective agreement incorporating a standard form Standard Player Contract. It specifies a minimum term of one year and a minimum salary for players. A player and a registered contract advisor acting on his behalf can negotiate salaries and contract terms that exceed these minimum requirements. Despite the collective agreement, there is express provision for negotiation of these items between players and football clubs.
[13] The collective agreement provides in Article 28 (1):
All Member Clubs shall be required to negotiate with each Player or any person designated by the Player in writing to represent the Player. The Member Club shall not deal with any person who is not registered as a Contract Advisor with the C.F.L.P.A. It is agreed that Member Clubs, Contract Advisors and Players shall, at all times, negotiate in good faith and act in accordance with ethical business practices.
In the event that a Member Club is contacted by a Contract Advisor not registered with the C.F.L.P.A., the Member Club shall notify the C.F.L.P.A. forthwith.
When a Contract Advisor has represented a Player in the negotiation of the Player’s Contract, the Member Club shall include on the Player’s C.F.L. Standard Player Contract the name of the C.F.L.P.A. registered Contract Advisor and the Contract Advisor’s registration number. The C.F.L.P.A. shall provide the CFL with an update of all Contract Advisors registered with their registration number on a monthly basis.
[14] The CFLPA has adopted regulations governing approval of contract advisors and their conduct. Applicants for registration as contract advisors must agree to conform to those regulations. The application requires detailed background information. Applicants must successfully complete an examination administered by the CFLPA. Conduct that reflects adversely upon the competence, credibility or integrity of an Applicant, or inadequate insurance may result in refusal of registration as a contract advisor (see Application Record p. 728). Contracts between contract advisors and players which are not in the prescribed form are unenforceable. Maximum fees are prescribed. The provisions are clearly intended to protect players.
The standard of review
[15] All parties submit that the standard of review is reasonableness. The Applicant emphasizes that there are not variable degrees of deference within the reasonableness standard, relying on Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at para. 47:
The majority reasons in Dunsmuir do not recognize variable degrees of deference within the reasonableness standard of review and with respect neither do the reasons in Canada (Canadian Human Rights Commission). Once it is determined that a review is to be conducted on a reasonableness standard, there is no second assessment of how intensely the review is to be conducted. The judicial review is simply concerned with the question at issue. A review of a question of statutory interpretation is different from a review of the exercise of discretion. Each will be governed by the context. But there is no determination of the intensity of the review with some reviews closer to a correctness review and others not.
[16] The Respondent emphasizes the experience of the arbitrator and the high degree of deference customarily afforded to arbitrators in the labour relations context.
[17] In any event, reasonableness in this context was defined in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 at para. 47:
Reasonableness is a deferential standard animated by the principle that underlies the development of the two previous standards of reasonableness: certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions. A court conducting a review for reasonableness inquires into the qualities that make a decision reasonable, referring both to the process of articulating the reasons and to outcomes. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
[18] And further in Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. at paras. 17, 23:
The fact that there may be an alternative interpretation of the agreement to that provided by the arbitrator does not inevitably lead to the conclusion that the arbitrator’s decision should be set aside if the decision itself is in the realm of reasonable outcomes.
Remedy for breach of the collective agreement
[19] All agree that an agreement negotiated with a player that violates the minimum substantive terms of the Standard Player Contract would be void, for example, if the salary or term of the agreement fell below the minimum. What then are the consequences where the process leading to the formation of the contract between the player and the Tiger Cats did not comply with the specific requirements of the collective agreement?
[20] The Applicant analogizes to discipline cases – where failure to have a union representative present vitiates disciplinary measures. (See, e.g., Toronto (City) v. Canadian Union of Public Employees, Local 79 (Nzeakor Grievance) (1995), 1995 18364 (ON LA), 47 L.A.C. (4th) 197 (Charney), aff’d [1997] O.J. No. 2071 (Div. Ct.); Go Plastics Inc. v. CAW Canada, Local 1524 (Melo Grievance) (2001), 2001 61987 (ON LA), 97 L.A.C. (4th) 443 (Rayner); and U.F.C. Local 175 v. Imperial Parking Canada Corp. (Mal Grievance), [2010] O.L.A.A. No. 568 (Dissanayake).
[21] The scope for individual bargaining as between employer and employee is narrow where there was a collective agreement.
[22] This was emphasized in Loyalist College of Applied Arts and Technology (Board of Governors) v. Ontario Public Service Employees Union (2003), 2003 29709 (ON CA), 63 O.R. (3d) 641 (C.A.) by Laskin J.A., at paras. [37] – [39].
What then does one take from these four cases? Admittedly, as the College argued, in none of them does the Supreme Court expressly prohibit individual bargaining of a condition of employment not covered by the collective agreement. In these cases, however, the Court emphasized the sanctity of the collective bargaining regime and the role of the union as the representative of all employees in the bargaining unit. The Court thus affirmed the principle that the collective agreement, not individual negotiation, should govern the employment relationship in a unionized workplace. Permitting an employer to negotiate directly with an employee a term or condition of continued employment conflicts with this principle. Therefore, it seems to me that the reasoning in the four Supreme Court of Canada cases precludes individual bargaining of a condition whose non-fulfilment could lead to dismissal.
I think the jurisprudence on this question is fairly summarized by Brown and Beatty’s Canadian Labour Arbitration, 3rd ed. (Toronto: Canada Law Book, 2002) at para. 2:1210.
It has long been established that individual employment relationships have meaning only at the hiring stage and that the individual employee’s bargaining rights over terms and conditions of employment are pre-empted by a collective bargaining relationship… The only scope for individual bargaining with regard to terms and conditions of employment would appear to be where it is sanctioned by the collective agreement, by the collective bargaining agent, where it is ancillary to routine administration of the collective agreement, where the terms fall outside the scope of the agreement, where the terms fall outside the scope of the agreement, such as an agreement concerning an early retirement arrangement or reimbursement for relocation expenses, or in some cases where there is a voluntary waiver of a collective agreement benefit that does not undermine the collective agreement [footnotes omitted; emphasis added].
In the case before us, the condition of Ms. Bergman’s hiring was not sanctioned by the collective agreement and was not ancillary to the routine administration of the agreement. Nor, in my view, was it a term outside the scope of the agreement that might be individually bargained. Instead, it was a term that went to the core of Ms. Bergman’s continued employment. Based on the Supreme Court of Canada’s case law, the Board correctly held that the condition of Ms. Bergman’s employment was invalid.
[23] On the other hand, assessment of the seriousness of a breach of contract and whether it is so significant as to excuse an innocent party from further performance of a contract is a well-accepted approach to determination of the consequences of a breach of contract. This is the principle that the arbitrator applied, when he indicated that the “penalty is one that is based on normal equitable principles.”
[24] As observed in Bayer Aktiengesellschaft v. Apotex Inc., 1998 5747 (ONCA) at para. 34:
At common law, an innocent party cannot elect to treat a contract as at an end when the other party has committed only a minor breach; see, for example: Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd., [1962] 2 Q.B. 26 C.A. (wherein Diplock L.J. emphasized that whether termination of a contract will be justified will depend on the effect of the breach, namely whether it amounts to substantial failure or performance). Similarly, courts have also distinguished amongst breaches by employing a “fundamental breach” test, e.g. whether the breach of the term in question is fundamental in that it goes to the “root” or essence of the contract, or whether the breach is less significant such that the contract can still be performed; see generally: Pigott Construction Co. Ltd. v. W.J. Crowe Ltd. (1961), 1961 23 (ON CA), 27 D.L.R. 258 (Ont. C.A.); Sanko Steamship Co. Ltd. v. Eacom Timber Sales Ltd., 1986 804 (BC SC), (1986), 32 D.L.R. (4th) 269 (B.C.S.C.). A court can award damages or other appropriate remedies for a minor breach of a contract while requiring the innocent party to fulfill its contractual obligations. However, an innocent party may elect to treat a contract as repudiated and at an end when the breach by the other party is in respect of a fundamental term or goes to the essence of the contract.
[25] In the end, the arbitrator concluded that the breach by the Tiger Cats was not so serious as to excuse Williams from performance of the contract.
[26] Both Williams and the Tiger Cats had complied with the contract for two years. There was no evidence of procedural or substantive unfairness to Williams in the contract negotiation process or in the substantive terms of the contract.
Cox was the contract advisor of Williams’ choice. There was evidence that 50% of players use unregistered contract advisors to negotiate on their behalf. While the arbitrator could have declared that Williams was no longer obligated to perform the contract, the arbitrator’s decision to hold him to its terms falls within the range of possible reasonable outcomes.
[27] Here, unlike the provision in issue in Loyalist College of Applied Arts and Technology v. OPSEU supra, the employer’s substantive right to exercise an option for a further year after the expiry of the term of the contract with a player is not a violation of or extension of rights provided by the collective agreement, but is a right expressly recognized by the Standard Form Player Contract and the collective agreement. Here the complaint is about the process leading to the agreement signed by Williams and the Tiger Cats where there has been no objection voiced about that process for about 2 years. In that respect, the breaches of the collective agreement by the employer are ancillary to the substantive rights accorded by the collective agreement. The flaws in the negotiation process as between Williams and the Tiger Cats need not attract the same consequences as a procedural failure in a discipline case. The latter is a fact finding exercise to establish whether employee misconduct has occurred and to determine what disciplinary measure, if any, is appropriate. While that trial like process might be vitiated where the employee is not treated with procedural fairness because his union representative was not present, that is quite a different context from flaws in the negotiation process here.
Exercise of the Option
[28] As a players contract drew near the end of its term, the Hamilton Tiger Cats had three options:
(1) Do nothing. In that event, the player and the club would part ways at the expiry of the term of the contract.
(2) Re-negotiate a new agreement with the player. This would require the consensus of both parties. For example, the club and the player could agree that the term of the agreement would be extended and leave intact the club’s option to require another year at the expiry of the term.
(3) The club could exercise its option to require a further year of employment by the player. This would be a unilateral action by the club and would not require the further consent of the player. In fact, the option could be exercised over the objections of the player.
[29] All agree that the exercise of the option must be done in clear terms. Here the club was in sole control of the language it used to exercise the option. Article 15 of the Standard Player Contract provides:
On or before the date of expiration of this Contract the Club may upon notice in writing to the Player addressed to his permanent home address as indicated hereunder, renew this Contract for a further term until the 15th day of February following the said expiration, on the same terms as are provided in the Contract except that (1) the Club may fix the rate of compensation to be paid by the Club to the Player during the said period of renewal and the rate of compensation shall not be less than one hundred (100%) percent of the amount set forth in Paragraph 3 hereof and one hundred (100%) percent of any bonus payment or payments payable except signing bonus, and (2) after such renewal this Contract shall not include a further option to renew the Contract. The renewal of this Contract shall be understood to include all bonus clauses regardless as to the year described therein and bonus payment or payments of any nature whatsoever except that signing bonuses will not be included.
[30] Here the arbitrator’s reasoning becomes confused. He indicated, “…the above [he must mean below] indicates the way in which notice is given to relevant players and reads “Appendix L”.”
[31] Appendix L has no application to the exercise of an option by a club. It refers to the notice to be given to a new player, that is to say, one who is not a veteran according to Article 28(4) of the collective agreement. It appears that the club attempted to track the language of Appendix L in the notice it gave to Williams. The arbitrator compared the letter sent to Williams to an Appendix L letter and found it adequate. He noted that Williams understood that the club had the right to exercise the option and made no objection when he signed to acknowledge receipt of the letter. The arbitrator did not grapple with the text of the letter to assess whether it clearly exercised the option.
[32] As observed in Dumbrell v. The Regional Group of Companies Inc., 2007 ONCA 59, 85 O.R. (3d) 616, at paras 50-52:
In my view, when interpreting written contracts, at least in the context of commercial relationships, it is not helpful to frame the analysis in terms of the subjective intention of the parties at the time the contract was drawn. This is so for at least two reasons. First, emphasis on subjective intention denudes the contractual arrangement of the certainty that reducing an arrangement to writing was intended to achieve. This is particularly important where, as is often the case, strangers to the contract must rely on its terms. They have no way of discerning the actual intention of the parties, but must rely on the intent expressed in the written words. Second, many contractual disputes involve issues on which there is no common subjective intention between the parties. Quite simply, the answer to what the parties intended at the time they entered into the contract will often be that they never gave it a moment’s thought until it became a problem: see Kim Lewison, The Interpretation of Contracts, 3d ed. (London: Sweet & Maxwell, 2004) at 18-31.
Eli Lilly, supra, instructs that the words of the contract drawn between the parties must be the focal point of the interpretative exercise. The inquiry must be into the meaning of the words and not the subjective intentions of the parties.
No doubt, the dictionary and grammatical meaning of the words (sometimes called the “plain meaning”) used by the parties will be important and often decisive in determining the meaning of the document. However, the former cannot be equated with the latter. The meaning of a document is derived not just from the words used, but from the context or the circumstances in which the words were used.
[33] The full text of the letter sent to Williams is as follows:
We are attaching to this letter a copy of the CFL Standard Player contract.
We draw your attention to Paragraph 15 of this contract which provides the organization to exercise the option renewal of this contract for a one year term. Paragraph 15 provides for the compensation to be no less that the compensation provided for in Paragraph 3 of the current contract.
I, ____________________________ acknowledge that I have received my 2013 option year renewal letter
Player Signature Date
The current Collective Bargaining Agreement also requires each member Club to forward the player currently in their option year an offer in writing, on or before May 1st, to sign a contract for their 2012 option year.
Below is an offer, which complies with Article 34.03 of the aforementioned agreement.
The Hamilton Tiger-Cats offer to extend your contract by one year for the same base salary and incentives as your present contract.
[34] Analysis of the letter breaks it down into the following components:
(1) A copy of the standard player contract is enclosed. (It was not in fact enclosed.)
(2) Williams is referred to para. 15 of the contract.
(3) Williams is to sign to acknowledge receipt of the “2013 option renewal letter”.
(4) The letter refers to an obligation by the club to forward an offer in writing to sign a contract for their 2012 option year.
(5) The club submits an offer said to comply with Article 34.03 of the Standard Player agreement. “The Hamilton Tiger-Cats offer to extend your contract by one year for the same base salary and incentives as your present contract.”
[35] Both parties confirm in argument that Article 34.03 has nothing to do with the exercise of an option by the club. It is not at all clear from this letter whether read in its parts or as a whole whether the club is only seeking Williams’ agreement to extend his contract for a further year leaving the option year intact on top of the further extension of the term of the contract. The letter is confusing in that it refers to “my 2013 option year” and an offer to sign a contract for “their 2012 option year.”
[36] The use of “offer” implies that Williams’ consent is required.
[37] There is no clear and unequivocal language along the lines, “The Hamilton Tiger-Cats exercises its option to require you to play for another year for this club.” The language used in the letter is not capable of being construed as a clear communication of an intention to exercise the option and the arbitrator’s conclusion that it was clear was unreasonable. The language of the letter is confusing even in the context of circumstances where all would recognize that the Tiger Cats would want to exercise the option because of Williams’ skills as a player. The subjective intentions of the Tiger Cats are no substitute for clarity in expressing the intention to exercise the option. On this ground, the arbitrator’s decision must be quashed. The parties have agreed that costs fixed at $8,500 should follow the result.
[38] Accordingly, the application record is endorsed.
(1) Leave granted pursuant to s. 6(2) of the Judicial Review Procedure Act.
(2) The decision of the Arbitrator E.E. Palmer dated June 12, 2013 is set aside.
(3) Costs to the Applicant fixed at $8,500.
Pardu J.
Released: August 29, 2013
CITATION: The Canadian Football League Players’ Association v. The Hamilton Tiger Cat Football Club (2003) Corp., 2013 ONSC 5483
DIVISIONAL COURT FILE NO.: 339/13
DATE: 20130829
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
The Canadian Football League Players’ Association
Applicant
– and –
The Hamilton Tiger Cat Football Club (2003) Corp.
Respondent
REASONS FOR JUDGMENT
Pardu J.
Released: August 29, 2013