Sports Law Blog
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Thursday, August 17, 2006
NHL "Stealing" Russia's Star Hockey Players?
There's an interesting story released this week on NHL.com as well as in USA Today about hockey star Evgeni Malkin, who bolted from his Russian professional hockey league team, the Metallurg Magnitogorsk, last Saturday after it arrived for training camp in Helsinki, Finland. Malkin is widely considered the best in the world not currently playing in the NHL. Malkin's agents in the U.S. will not confirm where he is at the moment, though they believe he is "out of harm's way". This is good news for the Pittsburgh Penguins because, although Malkin is currently under contract with Metallurg, they own the rights to Malkin here in the States as he was their No. 2 overall pick in the 2004 draft. Now that he is out of Russia, Malkin is expected to sign with the Penguins, if he hasn't already done so, and report to their rookie camp. However, Metallurg general director Gennady Velichkin is threatening legal action against the Penguins: "We all are really shocked by his departure and we will take legal actions against the NHL club Penguins from Pittsburgh. Americans like to speak about democracy and teach the whole world how to live but engage in sport terrorism and simply steal people."
In the U.S., it is well established that if a player under an existing contract "jumps ship" and signs a contract with another team in a different league, the team that loses the player would generally have two claims. First, the team could sue the player for breach of contract and seek a court order by way of a "negative injunction" to prevent the player from playing for the new team. Second, the team could sue the new team on a tort claim for intentional interference with contractual relations if the new team signs (or attempts to sign) the player to a contract that overlaps with the player's term under his existing contract. However, the new team is not prohibited from negotiating a contract with the player for a term to commence after the expiration of the term under the player's existing contract because, from a policy standpoint, courts are sympathetic to the defendant's right to compete with the plaintiff for the personal services of others.
So this situation presents an interesting international sports law issue because the two teams are located in different countries, and each country has its own set of laws governing the issue. One major distinction between the two countries' laws is that Russian law apparently permits any employee under contract, even a professional athlete, to leave his or her job upon giving two weeks' written notice. Thus, unlike in the States, it appears that it might be difficult for Mettalurg to establish a claim against Malkin for breach of contract.
But what about a tortious interference claim against the Penguins? This is a complicated question. Mettalurg would most likely sue the Penguins in a Pennsylvania court and, assuming the court determines that jurisdiction is appropriate, the court would most likely apply Pennsylvania law. It then becomes a factual issue regarding the extent of interference committed by the Penguins. Mettalurg could argue that the Penguins were aware that Malkin was already under contract when they made Malkin their first round draft pick. However, that act alone probably wouldn't rise to the level of tortious interference on the part of the Penguins unless the Penguins also negotiated a contract with Malkin (or his agents) for a term to commence prior to the end of the Mettalurg contract term.
If the Penguins ultimately sign Malkin to a contract that overlaps with the Mettalurg contract term, it would make Mettalurg's case much stronger. On the other hand, even if the Penguins do sign Malkin, the Penguins could argue that the interference is not substantial (i.e that the Penguins didn't really do something that either prevents performance of the Mettalurg contract or makes performance substantially less likely) if Malkin could in fact terminate the Mettalurg contract by simply giving two weeks' notice. Mettalurg might have a good argument that the two week notice termination right simply allows the player to essentially opt out of the contract and not play, but such right does not permit a player to nullify an existing contract and sign with another team because that would make all multi-year terms in Russian professional sports contracts superfluous.
As the USA Today article indicates, Malkin isn't the only Russian player invoking the letter of resignation as a way to leave a team and play in the NHL. Draft picks Alexei Mikhnov (Edmonton Oilers) and Andrei Taratukhin (Calgary Flames) also sent such letters to their Russian teams this summer in order to join the NHL. It will be interesting to see if Mettalurg ultimately acts on its threat....