Wednesday, July 20, 2011

How The Arbitration Process Works

Arbitration hearings begin today in the NHL with Lauri Korpikoski of  Phoenix and Teddy Purcell of Tampa first on the schedule.

For many, the arbitration process is a mystery. Chris Johnson did an excellent job describing how the arbitration process works and what each side is or isn't allowed to submit as evidence to support their argument.

According to Johnson:
Each of the arbitration hearings is held in Toronto and follows a specific protocol laid out in the CBA. The sides each get the floor for 90 minutes and are limited in what evidence they can use to support their case.

The presentations are allowed to focus on a player's statistics, his contribution to team success and identifying others around the league with similar numbers that draw a salary in the desired range. However, they must not include references to a team's salary cap situation, any history of negotiations between the player and the team or make a comparison to a deal signed by an unrestricted free agent.

Following the hearing, the arbitrator has 48 hours to make a decision and will provide a brief explanation of why he settled on a specific salary.

If the award is for more than $1,633,131 on a one-year deal, the team has the right to walk away from the ruling and let the player become an unrestricted free agent. That happened a year ago with the Chicago Blackhawks and goaltender Antti Niemi.

Otherwise, the sides go forward with the contract dictated by the arbitrator.

Rangers fans will likely remember back in August, 2009 when the Rangers decided to walk away from Nik Zherdev making him a UFA after he was awarded $3.9M by the arbitrator.

The Rangers and Devils are the only teams that have more than one scheduled arbitration hearing. For the Rangers Brandon Dubinsky and Ryan Callahan look set to go to arbitration while for the Devils Mark Fraser and Zach Parise will have their salaries for next season decided by an arbitrator.  

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