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Russian government closes hockey contract loophole |
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Earlier this week, the Russian Duma passed the first draft of legislation to partially exclude professional athletes and coaches from a labor law that allows employees to leave their jobs without any compensation to be paid to their employers. This can be invoked by providing 14 days written notice.
Under the terms of the new law, compensation will be owed when players or coaches leave before the end of their contracts. The maximum compensation will be two-thirds the value of the contract.
The 14-day rule had been used by NHL teams as legal justification for signing players such as Alexander Ovechkin and Evgeni Malkin who had canceled their existing contracts. It also provided proof that, in lieu of Russian participation in the NHL-IIHF transfer agreement, Russian clubs and the Russian Hockey Federation had no right to ask for compensation when players left Russia.
The law also, for the first time, establishes legal rights to compensation for players or coaches who are released/fired by their teams.
Until now, Russian teams could simply cancel out player contracts at will and not pay a thing (this often included situations where the team owed back salary. In some cases, teams canceled out the existing contract and replaced it with contracts paying considerably less money, which the player could either take or leave).
The new law is expected to be formally ratified in the fall and take effect on January 1, 2008.
In statements to the Russian press, Russian Hockey Federation president Vladislav Tretiak has said that he hopes NHL teams will honor the new law by either 1)waiting until players' contracts have expired and then signing the player with no compensation owed or 2) making sure the legally-required compensation is paid if the player wants to cancel out his contract early.
Philadelphia Flyers Blogger •NHL.com • 
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