Ontario Labour Relations Board

[1995] OLRB Rep. November 1389

2919-95-U National Basketball Referees Association, Applicant V. National Basketball Association, Responding Party

BEFORE: Janice Johnston, Vice-Chair.

APPEARANCES: Paul Cavalluzzo, Sean Fitzpatrick, Mike Mathis and Paul Mihalak for the applicant; Daniel J. Shields, Jeffery A. Mishkin, Howard Ganz, Joel Litvin, Jamin Dershowitz and Beth Pierson for the responding party.

DECISION OF THE BOARD; November 10, 1995

1. This is an application pursuant to section 95 of the Labour Relations Act (the "Act") in which the applicant, the National Basketball Referees Association (the "NBRA") seeks a declaration that the responding party, the National Basketball Association (the "NBA") has violated section 74(2) of the Act and that its actions constitute an unlawful lock-out. The NBRA also requests that the Board order the NBA to use its members to referee all games in Ontario and that the Board award compensatory damages to the NBRA's members.

2. Because of the urgency presented in this case I am issuing the following decision quickly and with extremely brief reasons. More complete reasons may issue at a later date.

3. Section 74(2) of the Act states as follows:

4. (2) Where no collective agreement is in operation, no employee shall strike and no employer shall lock out an employee until the Minister has appointed a conciliation officer or a mediator under this Act and,

(a) seven days have elapsed after the day the Minister has released or is deemed pursuant to subsection 115 (3) to have released to the parties the report of a conciliation board or mediator; or

(b) fourteen days have elapsed after the day the Minister has released or is deemed pursuant to subsection 115 (3) to have released to the parties a notice that he or she does not consider it advisable to appoint a conciliation board.

4. Many of the facts in this case are not in dispute. However, the interpretation and legal effect of the facts are in dispute. Among the issues in dispute is whether there is a collective bargaining relationship in Ontario - although as noted below the existence of a collective bargaining relationship does not determine whether there is or can be a lawful strike or lock-out in Ontario.

5. In 1977, the NBA voluntarily recognized the NBRA. The agreed upon recognition clause reads as follows:

Article I

Section I The NBA recognizes NABR as the exclusive collective bargaining representative of persons employed by the NBA as referees, and NABR warrants that it is duly empowered to enter into this Agreement for and on behalf of such employees.

(I note it was amended in the 1983-85 collective agreement by inserting the word "all" before the word persons in the third line).

There is no geographic limitation in this clause, and it is classification specific. In other words, it only applies to referees and its application is not restricted to a particular location or area.

6. The NBA started playing exhibition games in Toronto in 1980. From 1988 to the present, it has caused to be played in Ontario from one to four exhibition games annually. The only exception to this occurred in 1994, as Toronto hosted the World Championship of Basketball that year. Exhibition games always take place in October as they are pre-season games. Whenever the NBA played games in Ontario, the NBA assigned members of the NBRA to referee the games and applied the collective agreement. Such referees were paid in accordance with the terms and conditions of the collective agreement and were entitled to the protection of the collective agreement when they worked in Ontario.

7. In 1992, the highlighted portion of the following clause was added to the collective agreement.

Article II

Section 6. (a) Except as may be set forth above in this Article II, all matters relating to the assignment and scheduling of referees shall be in the sole and exclusive discretion of the NBA. The foregoing shall not, however, detract from the rights accorded NABR by Section 10 below. Any referee assigned to officiate an NBA game shall be required to accept and perform such assignment(s) unless, upon request by the referee, the NBA Vice President, Operations, in his sole and absolute discretion, decides to relieve the referee of such assignment.

(b) To the extent that the NBA controls the assignment of officials for NBA games played outside the United States, the NBA shall assign NABR referees.

8. The applicant took the position, in essence, that it sought the inclusion of this clause in the collective agreement to ensure that whenever the NBA controls the assignment of referees, it is obligated to use NBRA referees. For example, this could include games played on cruise ships and charity games. In counsel's view, this article is not inconsistent with section one.

9. The responding party argued, in essence, that the addition of this clause to the collective agreement in 1992 proves that prior to 1992 the NBRA did not have bargaining rights outside the USA. If they did, then in counsel's view, there was no need for section 6(b). Counsel argued that Article 6(b) was inconsistent with the NBRA's interpretation of section 1.

10. I do not accept counsel for the NBA's characterization of section 6(b). It is not inconsistent with section one. In any event, it was acknowledged by the NBA that they had applied the collective agreement to any NBA games referred by members of the NBRA outside the United States. Section 6(b) merely reinforces the obligations of the NBA, which are created by section 1.

11. The most recent collective agreement expired in September, 1995. The parties tried unsuccessfully to negotiate a new collective agreement and on October 1, 1995 the NBA "locked out" the referees. Therefore the NBA has prohibited the referees from working in any of the pre-season or regular season games in Ontario and elsewhere.

12. The issue before the Board is whether or not that "lock out" is legal under the Ontario labour relations legislation. Counsel for the applicant argued that the fact that the parties have not undergone the mandatory conciliation procedures required by the Act makes the lock-out unlawful in Ontario.

13. Counsel for the NBA argues that the Ontario legislation does not apply to the situation currently before the Board. Counsel argued that there is no employment relationship between the NBA and the NBRA in Ontario as the NBA does not come to Ontario on a regular basis. Therefore, when the referees work in Ontario they are not employees of the NBA and the NBA is not their employer. Given this, counsel argued that the NBRA cannot be a trade union as that term is defined in the Act, there can be no voluntary recognition of the Association by the employer, the NBRA cannot have any collective bargaining rights for referees working in Ontario and no collective agreement can be in existence under Ontario law. However, it is conceded that the individuals in question are employees of the NBA in the USA, and that the work is subject to the NBA's direction and control when they referee games in Ontario. Likewise it is conceded that the NBRA is a union with employees in the USA.

14. The Board had before it in April of this year a case which is strikingly similar to the one currently before the Board. That case involved the Association which represents the major league baseball umpires and baseball clubs, The American League and The National League of Professional Baseball Clubs and The Toronto Blue Jays Baseball Club, [1995] OLRB Rep. April 540. (For ease of reference I will refer to this decision as the "Umpires' decision"). The facts were briefly summarized in that decision as follows:

15. This is an unfair labour practice complaint that raises a number of novel and difficult issues. Some of those issues involve the application of new legislation that was passed in 1993. Others involve longstanding provisions of the Labour Relations Act which the applicant seeks to apply to a rather special commercial context: professional sport. But in both cases, the principles that emerge may have application beyond the particular situation under review.

16. That situation is easy enough to describe, and to make this decision easier to read, we will refer to the parties in abbreviated form.

17. For many years the "American League", the "National League", and the "Umpires' Organization" have bargained together to settle the salaries and working conditions of professional umpires. This collective bargaining has taken place from time to time over at least the last 20 years, and has resulted in an agreement that is uniformly applied whenever and wherever umpires work in the United States and Canada. When umpires come to Toronto, as they have on a regular basis since 1977, they are paid in accordance with that agreement. Members of the Umpires' Organization are regularly and routinely working in Toronto, whenever the Blue Jays have a home game.

18. This year the Leagues and the Umpires' Organization are engaged in collective bargaining for a new collective agreement. That agreement, when concluded, will also apply in the United States and Canada. However, negotiations are at an impasse and, as a result, the Leagues have "locked out" the umpires at all locations at which they would customarily work, including the Skydome in Toronto.

19. The lock-out that was imposed by the Leagues is effective in Toronto. It is preventing umpires from working in Toronto as they normally would, and, as we understand it, there has been picketing in Toronto in connection with this collective bargaining dispute. The lock-out is a collective bargaining tactic. In order to put economic pressure on the umpires to agree to the Leagues' bargaining proposals, the Leagues have locked out the umpires and have also engaged "replacement umpires" to work in the United States and Canada where the locked out umpires normally work - including at the Skydome in Toronto.

20. It is common ground that: the Umpires' Organization is a "trade union" under United States law; any resulting agreement between the Leagues and the Umpires' Organization will be a "collective agreement" under American law; the parties intend to apply that "collective agreement" in Canada to "employees" who work in both the United States and Canada; and the lock-out has been imposed by the Leagues in respect of umpires in the United States and Canada.

21. The question is whether any of these employment relationships and collective bargaining activities are subject to Canadian law - which may mean Ontario legislation because, in Canada, employment and collective bargaining matters are largely subject to provincial regulation. The Umpires' Organization says that they are. The Leagues say that they are not.

22. The Leagues' primary submissions are that: the Umpires' Organization is not a "trade union" under Ontario law; the Umpires' Organization has no collective bargaining rights under Ontario law for umpires working in Ontario; there are no employment or collective bargaining relationships in Ontario to which the Ontario law could apply; the agreement that is struck in the United States is not a collective agreement under Ontario law; there is in fact no "lock-out" in Ontario at all to which the Ontario law can apply; and, of course, the new legislation barring replacement workers can have no application either.

23. Simply put, the Leagues maintain that the ongoing employment and collective bargaining relationships - including the lock-out - are American activities which may have commercial consequences in Ontario, but are in no way subject to Ontario collective bargaining law. The Leagues further argue that this and every other panel of the Board are prohibited from hearing this application because of a reasonable apprehension of bias, (stemming from a newspaper report, in which counsel for the Umpires' Organization is quoted as saying that some unknown person from the Labour Relations Board told him the statute applied to his situation). In the alternative, the Leagues maintain that if any Canadian law applies at all, it is the Federal Canada Labour Code. In the further alternative the Leagues submit that if Ontario law applies and there has been a breach of that law no remedy should be given.

24. Counsel for the NBA points to the phrase "as they have on a regular basis since 1977"

in paragraph 3 as indicative of a requirement that the NBA must operate in Ontario on a regular basis for an employment relationship, to which Ontario law applies, to exist. Counsel suggested that the NBA only occasionally and sporadically ventured into the Ontario jurisdiction and that this activity on the part of the NBA was insufficient for the Board to conclude that an employment relationship existed between the NBA and the NBRA in Ontario.

16. Even if I were to accept that there is some requirement that the NBA must play and must assign NBRA members to referee games on a "regular" basis in Ontario before an employment relationship can exist, on the facts of this case, there have been NBA games played on a regular basis in Ontario. There may not be many games, and the number of games played may be a minuscule portion of the total number of games played in the NBA, but that does not mean that games are not "regularly" played in Ontario. They may be infrequent, but since 1988, (other than in 1994 when many world championship basketball games were played and refereed by NBRA members) between one and four NBA exhibition games have been played in Ontario, in the month of October. This is indicative of a regular consistent pattern of activity. In my view it is not sporadic activity but regular, albeit infrequent, activity. I want to make it clear that in concluding that the NBA has employed members of the NBRA in Ontario on a regular basis I am not to be seen as accepting counsel for the responding party's suggestion that it is necessary for the NBA to carry on business on a regular basis as a prerequisite to a finding that an employment relationship exists. For the purposes of this brief decision it is not necessary to decide this point. However, should further reasons issue, I may well provide a decision on this issue. Before leaving this point, I would observe parenthetically that sporadic employment in Ontario by individuals or companies based elsewhere is a routine phenomena in some industries - the construction industry in Ottawa/Hull for example. No one has ever suggested that those trade people are not employees when they work sporadically in construction sites in Ontario.

17. As in the Umpires' case, counsel for the NBA took the position that the Board did not have jurisdiction to deal with this case as it falls within the constitutional jurisdiction of the Federal government.

18. In the Umpires' case, the Board made the following findings, declarations and determinations:

19. Having regard to the evidence and representations of the parties, and the provisions of the Labour Relations Act, the Board makes the following findings, declarations and determinations:

20. There is no reasonable apprehension of bias respecting the Board as a whole or this particular panel which would preclude this panel or the Board as a whole from adjudicating the legal issues raised in this case, or from granting the remedies requested. There is no suggestion that this panel is biased in any way, nor is there any evidence that any member of the Board expressed any view to the applicant or its counsel. we put no weight on the quote in the newspaper.

21. The labour relations, collective bargaining, and alleged employment relationships that are the subject of this application are regulated provincially by the Ontario Labour Relations Act, and not federally by the Canada Labour Code.

22. The Umpires' Organization is a trade union within the meaning of the Ontario Labour Relations Act.

23. The umpires regularly and customarily work in Toronto at the Skydome and are "employees" within the meaning of the Labour Relations Act and, therefore, individuals to whom the statute applies.

24. The Umpires' Organization is entitled to represent these individuals in Ontario, and the Umpires' Organization has bargaining rights for them in accordance with the Labour Relations Act.

25. The employer of these umpires is the American League and the National League of Professional Baseball Clubs not the Toronto Blue Jays Baseball Club.

26. The agreement negotiated between the Leagues and the Umpires' Organization is (or was) a collective agreement in accordance with the Labour Relations Act.

27. Any lock-out of umpires, at this time, in the Province of Ontario would be unlawful in Ontario because neither the Leagues nor the Umpires' Organization have triggered the compulsory conciliation process which is mandatory in this province before a lawful strike or lock-out can occur. Similarly, any strike of umpires in Ontario would be unlawful at this time. (See section 74 of the Labour Relations Act).

28. The engagement or employment of replacement umpires is likewise unlawful, being contrary to section 73.1 of the Labour Relations Act.

29. As we will discuss below, we are not persuaded that as a matter of discretion the Board should refuse to make any declaration or remedial direction respecting the ongoing collective bargaining activity, insofar as it occurs in and is regulated by Ontario law.

30. Having reached the factual conclusions as already set out, and in accordance with the Board's conclusions in the Umpires' case, which are directly applicable to the case before the Board, I hereby declare and direct as follows:

31. An employment relationship exists between the NBA and members of the NBRA when the NBA assigns referees to referee the games in Ontario. The NBA is an employer for the purposes of the Labour Relations Act and the referees are employees for the purposes of the Act.

32. The labour relations, collective bargaining, and alleged employment relationships that are the subject of this application are regulated provincially by the Ontario Labour Relations Act, and not federally by the Canada Labour Code.

33. The NBRA is a trade union within the meaning of the Ontario Labour Relations Act.

34. The NBA has voluntarily recognized the NBRA as the exclusive bargaining representative of all persons employed by the NBA as referees. By virtue of the recognition clause in the collective agreement and the conduct of the NBA in applying the terms and conditions of the collective agreement when referees are employed in Ontario, it has voluntarily recognized the NBRA as the representative of referees employed by the NBA in Ontario.

35. The NBRA is entitled to represent the persons referred to above in Ontario and the NBRA has bargaining rights for them in accordance with the Labour Relations Act.

36. Whether or not there are bargaining rights, the employees in question have been locked out within the meaning of section 74(2) of the Act. The current lock-out of the referees in Ontario is unlawful as the parties have not undergone the mandatory conciliation processes provided for in the Act. Similarly, any strike of referees in Ontario would be unlawful at this time.

37. This brings me to the issue of discretion. Pursuant to section 95 of the Act after the Board has made an unlawful lock-out declaration it has the discretion not to order a remedy. In dealing with this issue in the Umpires' case the Board stated:

38. As we have indicated in the preceding paragraph, we are satisfied that the Ontario Labour Relations Act applies to the circumstances under review, that provisions of the Ontario Labour Relations Act have been contravened, and that a remedy should issue. However, we are more troubled by the Leagues' alternative submission that even if Ontario Law does apply and has been breached, no remedy should issue. There is considerable force to the Leagues' submission that the collective bargaining process (of which the "Toronto lock-out" is only a small part) is occurring lawfully in other jurisdictions, and that the application before us is an opportunistic attempt to gain a tactical advantage from local collective bargaining law, that no one has sought to apply in the past. But, by the same token, there has been no need for anyone to consider the application or Ontario law before, collective bargaining includes the use of the law for tactical advantage, and there are certainly instances where employers have sought the application of provincial law for their tactical advantage, and to the potential detriment of broader extra-provincial collective bargaining structures.

39. We are troubled that the situation in Ontario is only a small slice of the collective bargaining pie, that is largely driven and regulated by forces outside Ontario. But the fact is: it is not unusual for business activity to span several provinces, or exist between Canada and the United States, yet for constitutional reasons, collective bargaining in this country is largely a provincial responsibility - whatever detrimental effects that may have to broader based collective bargaining processes. Fragmentation collective bargaining is a consequence of the Canadian constitution. Indeed, as counsel pointed out, Ontario Hydro is subdivided between Federal and Provincial jurisdiction with obvious consequences for collective bargaining that takes place wholly within Ontario; moreover, it is not at all unusual for the local branches of an economically integrated operation to have to comply with local provincial regulation for employment or other purposes. And even if federal law were to apply in this case (which we find that it does not) the Canadian facet of the industry would still be governed by much broader American-based collective bargaining imperatives.

40. Fragmentation is endemic in our constitutional scheme, and we do not think that the adverse collective bargaining consequences to broader based bargaining are sufficient, in themselves, to prompt the Board as a matter of discretion not to apply Ontario law to collective bargaining activity in Ontario. Notions of "comity" may make some sense between jurisdictions where the rights are generally congruent, but where there are different legal regimes (here in different countries) questions of "sovereignty" also come into play.

41. In any event, we do not think that we should decline to apply Ontario law simply because it is novel to do so, or because there may be collective bargaining consequences, or because one side may reap a temporary tactical advantage - any more than we would be inclined to exempt a local branch plant from the application of Ontario law where the same arguments might be made. It may be that the inability to strike, lock-out, or use replacement umpires in Ontario at this time has an effect on the ongoing collective bargaining, or introduces a new "wrinkle" into the collective bargaining process. However, we see no obvious reason why this should be an impediment to settlement, nor should it create an obstacle that cannot be overcome by bargaining in good faith - an obligation that the parties have in all jurisdictions. Certainly it is no reason not to apply the law at all.

42. There is however, a question of how to apply the Ontario law in this particular case, so as not to unnecessarily cause collective bargaining difficulties or commercial consequences - where, as here, it can be fairly said that none of the parties have had much of an opportunity to consider the application of Ontario law, or seek compliance with it prior to the commencement of this proceeding. Until the filing of this proceeding on April 21, 1995, it was reasonable for the responding parties to expect that collective bargaining would proceed on the understandings that the parties have heretofore shared. With this in mind, we think that it is reasonable at this stage to merely make declarations of rights, which will be effective as at the conclusion of the baseball game currently scheduled for May 3, 1995. This will give the parties an opportunity to consider their legal and collective bargaining positions prior to the Blue Jays return to Toronto later in May.

43. The Board's observations in the Umpires' case are equally applicable to the instant case and I share the concerns and views as expressed therein. However, I am also of the view that it is appropriate to apply the Ontario legislation in the case before me. While clearly it will be an anomaly for the NBRA referees to only work in Ontario, it is not clear that either side will gain a tactical advantage in the collective bargaining negotiations and, if they do, that is part of the labour relations dynamics in a case of this nature. Until the conciliation process is complied with, the referees cannot legally strike and the NBA cannot legally lock them out. If either party so chooses to initiate it, the conciliation process can be completed within a short time frame and the anomalous situation in Ontario ended. I am not convinced that either party will be so prejudiced in this case that I should decline to order any remedies.

44. Accordingly, I reiterate:

a) the lock-out of the referees by the NBA in Ontario is illegal.

b) until the conciliation processes are complied with the NBA must assign members of the NBRA to NBA games played in Ontario.

23. To provide the NBA with an opportunity to assign referees to the games played in Ontario the above declarations and rights shall not be in effect until Tuesday, November 14, 1995.

24. No other remedial directions are appropriate.