<p>More than 10 days have passed since the San Jose Sharks made the decision to terminate Evander Kane’s seven-year, $49 million contract with almost $23 million remaining to be paid.&nbsp;It is just the latest storyline to unfold for the 30-year-old power forward, whose many transgressions have tainted an otherwise productive and exciting NHL career.</p>



<p>Most fans know the background, but what is less clear is what we can we expect next in the ongoing saga?&nbsp;</p>



<p>NHL legal proceedings are confidential, so they tend to be as mysterious as the Caramilk secret. Yet, surely there is information we can glean from past outcomes that will allow us to predict the future.</p>



<p>The dispute, at its core, is fairly simple.&nbsp;The Sharks believe that Kane breached his contract in a manner that allows them to be relieved from all further obligations.&nbsp;The NHL Players’ Association filed a grievance on Kane’s behalf, alleging that the Sharks’ contract termination was improper, and that his contractual rights should be upheld.&nbsp;</p><div class="injected-ad injected-video" data-nn-ad-tech-injection-count="0" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="163"></div>



<p>In the meantime<strong>, </strong>the NHL opened an investigation into one of the allegations made by the Sharks, which could lead to a suspension for violation of COVID-19 protocol independent of the grievance outcome. </p>



<p>That investigation appears to have created a temporary moratorium on any other team signing Kane to a new deal. There is nothing stopping Kane, a full-fledged unrestricted free agent, from signing a new deal.&nbsp; However, teams may not be interested if there is a lengthy suspension assessed that would need to be served prior to playing. So, while potential suitors wait, the matter will continue to play out between the Sharks (with the NHL’s blessing and support) and the NHLPA behind closed doors.</p>



<p>Analysis of the Kane case should be considered in the context of the specific contract wording.&nbsp;</p><div class="injected-ad" data-nn-ad-tech-injection-count="1" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="133"></div>



<p>The NHL Standard Player Contract (SPC) includes a provision obligating a player to maintain a certain standard of conduct on and off the ice.&nbsp;The SPC provides that a player is obligated “to conduct himself on and off the rink according to the highest standards of honesty, morality, fair play and sportsmanship, and to refrain from conduct detrimental to the best interest of the Club, the League or professional hockey generally.”&nbsp;It is this provision that the Sharks would be relying on to support their view that the contract has been breached by Kane with his latest conduct.&nbsp; Their position would reference the 21-game suspension Kane received earlier this season for forging his COVID-19 vaccine passport and the more recent allegations of violations of the AHL COVID-19 protocol arising from travel to his home in Vancouver while he was still in COVID-protocol with the Sharks’ AHL affiliate.&nbsp; </p><div class="injected-ad" data-nn-ad-tech-injection-count="2" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="146"></div>



<p>There have also been allegations this season regarding inappropriate conduct toward his estranged wife and failure to provide services in reporting to the rink as scheduled. These are just the latest incidents in a long line of Kane movie-of-the-week dramas. They are also the incidents that are relevant to the termination discussion, as any conduct pre-dating his signing with the Sharks would not factor into a determination of whether he has breached the current agreement.</p>



<p>It is interesting to note that the Sharks did not choose to terminate Kane’s contract following the lengthy suspension handed down in October, but rather chose to do so now.&nbsp; Perhaps they weren’t convinced they had sufficient grounds to terminate, but reconsidered when they believed Kane to be in breach of COVID protocols again in December?&nbsp;&nbsp;The timing would indicate that both the team and the NHL view the case for termination as stronger after the latest allegations.&nbsp;</p><div class="injected-ad" data-nn-ad-tech-injection-count="3" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="152"></div>



<p>Though a plain reading of the SPC language would suggest the threshold for termination has been met by Kane’s conduct, the most likely outcome here is a settlement between the team and the player. </p>



<p>In my opinion, neither party will want to risk an arbitrator’s decision, as the arbitrator won’t have the discretion to compromise.&nbsp;An arbitrator will rule either that the termination was proper, nullifying Kane’s entitlement to any further compensation from the Sharks, or that the termination was wrongful, meaning that the Sharks would still owe Kane the full amount of the contract.</p>



<p>If the latter, the implications on Kane’s free agent status and whether his contractual entitlement would be reflected in whole or in part on the Sharks’ cap going forward are less clear, and would be the subject of a groundbreaking ruling. No arbitrator will want to reinstate the contract and force an ongoing marriage between the Sharks and Kane, so the resolution in that scenario would likely be a payment schedule and cap hit structured akin to a buyout, with Kane still retaining free agent status.&nbsp;In any event, it may be in both sides’ interest to come to a clear and unambiguous settlement-and not leave fate in the arbitrator’s hands.</p><div class="injected-ad" data-nn-ad-tech-injection-count="4" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="205"></div>



<p>There are only a handful of recent precedents to look to for guidance as to how this matter might play out.&nbsp; The lack of termination for breach cases in recent NHL history may in part reflect that NHL players are generally a well-behaved lot, but it is more likely attributable to NHL teams being uneasy about challenging the SPC conduct language.&nbsp;</p>



<p>The most instructive case is that of Mike Richards, who was terminated by the Los Angeles Kings in 2015 with a similar $22 million remaining to be paid under the terms of his five-year deal.&nbsp; Richards was charged with possession of a controlled substance (oxycodone) as he crossed the U.S.-Canada border. That charge would seem to have given the Kings all the ammunition they needed to cite conduct falling short of the “highest standards” and viewed as “conduct detrimental to the interests of the Club.” However, the Kings chose to settle the grievance.&nbsp;</p><div class="injected-ad" data-nn-ad-tech-injection-count="5" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="154"></div>



<p>Even with something as egregious as a drug charge at a border crossing, the club must have feared a potential ruling against them. Through the settlement, the Kings got a significant measure of relief from their cash and cap obligations to Richards.&nbsp;The Kings agreed to pay Richards $10.5 million in “termination penalties” through the 2031-32 season, but the cap implications (including cap recapture implications) paled in comparison to the $5.75 million cap hit that would have been on their books for the final five years of his contract. The total settlement payment amount in real cash ($10.5 million) was also significantly less than the $14.5 million they would have owed had they decided to buy him out at that point. That would be considered a “win” for a team that sought to get out from under the contract of a player whose best days were behind him and had already been assigned to the AHL.<strong>&nbsp;</strong></p><div class="injected-ad" data-nn-ad-tech-injection-count="6" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="155"></div>



<p>The Kings were also involved in the high-profile termination of the contract of Slava Voynov, who was charged with domestic assault and suspended indefinitely by the NHL in 2014.&nbsp;The Kings terminated Voynov’s contract for breach and successfully<s> </s>voided their cash and cap obligations. That might have been a useful test case for an arbitrator’s view on the SPC conduct language, but Voynov opted not to grieve, instead returning to Russia to seek refuge in the KHL.</p>



<p>In 2020, the Washington Capitals terminated the contract of Brendan Leipsic after details of his offensive and misogynistic online conversation with his brother and others were publicly revealed. Similarly, Leipsic did not challenge the Capitals’ decision and is also currently playing in Russia.&nbsp;</p>



<p>In 2018, the Tampa Bay Lightning terminated the contract of Jake Dotchin, alleging breach of a similar provision in the player’s SPC which requires that the player be “fit and in proper condition for the performance of his duties as required by this SPC.”&nbsp;Dotchin reportedly arrived at training camp an alleged 35 pounds above his playing weight, and the Lightning decided there was an easier way to trim the fat than to work Dotchin back into shape.&nbsp;The NHLPA grieved that termination, and the Lightning reached an undisclosed settlement with the player, who subsequently signed with the Anaheim Ducks.</p><div class="injected-ad" data-nn-ad-tech-injection-count="7" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="217"></div>



<p>The Sharks are not the only side at risk if this case proceeds to an arbitrator’s ruling.&nbsp;All arbitration decisions become binding precedents for future disputes. From the NHLPA’s perspective, that means an arbitrator’s decision could create a new legal framework around what constitutes a breach of the SPC conduct provisions, and make it easier for teams to terminate SPC’s in the future.&nbsp;</p>



<p>Can you imagine the implications for the NHLPA if arbitrator Hon. Richard A. Levie drops a lengthy written decision that upholds the Sharks termination, leaves Kane with no money and includes language that hurts future players?&nbsp;That’s a big risk.</p>



<p>Yes, the Sharks have seven million reasons per year to proceed to arbitration with Kane instead of settling. If Kane is guilty of violating some or all of the COVID-19 protocols put in place by the NHL, AHL and Canadian government, or other inappropriate actions that have not been publicly brought to light, it would seem the Sharks have sufficient grounds to meet the threshold required in the SPC to terminate his contract.</p><div class="injected-ad" data-nn-ad-tech-injection-count="8" data-nn-ad-tech-max-gap="130" data-nn-ad-tech-current-gap="174"></div>



<p>However, given the risk of being wrong, and the history of settlements in the NHL, how this ends will likely depend as much on the strength of the Sharks’ resolve as it will the strength of their evidence against Kane.</p>



<p>—-</p>



<p><em>Chris Gear joined Daily Faceoff in Jan. 2022 after a 12-year run with the Vancouver Canucks, most recently as the club’s Assistant General Manager and Chief Legal Officer. Before migrating over to the hockey operations department, where his responsibilities included contract negotiations, CBA compliance, assisting with roster and salary cap management and governance for the AHL franchise, Gear was the Canucks’ vice president and general counsel.</em></p>
