Howard Levitt: Corey Perry situation shows even superstar employees are bound by company policies

Abrupt terminations are uncommon in pro sports, but Blackhawks were on mission to repair their culture

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Howard Levitt and Maria Belykh

Ask any proud North American about their favourite televised event to follow in the chilly winter months and very rarely would you receive a response other than football or hockey. For most of us, sport provides an immersive escape from daily drama and welcome reprieve from everyday problems.

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Once in a blue moon however, the sports world itself becomes embroiled in controversy. Such was the case two weeks ago, when Corey Perry, a 38-year-old veteran NHL star whose career has spanned nearly 20 seasons, was placed under internal investigation following his attendance at a corporate event hosted for the hockey community in Chicago. The media immediately picked up on the Chicago Blackhawks forward’s consecutive, healthy scratches from games, sensing something was amiss. Unsavoury rumours surrounding Perry arose, spreading like wildfire.

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Later that week, the Blackhawks organization concluded its investigation, finding that Perry had engaged in “unacceptable behaviour” that both breached his employment agreement and violated the team’s internal health and safety policies. Although neither the team nor Perry shared what precisely happened, it was revealed that the conduct did not involve any other players or their family members, contrary to the rumours. Numerous media reports also revealed that alcohol was likely consumed by Perry at the time of the incident.

To the surprise of many commentators and the hockey community, the team placed Perry on unconditional waivers and terminated his lucrative $4 million contract. For context, the abrupt termination of a contract due to a single incident of impropriety is uncommon in the world of professional sports.

Perhaps the decision to terminate Perry without warning can be explained by the hockey club’s recent past. The organization has been working hard to rebuild its reputation after an October 2021 report detailed how it had ham-fistedly handled a player’s allegations of sexual assault by an assistant coach during its 2010 Stanley Cup run. Since then, the franchise has overhauled many of its policies and reporting procedures, putting in place better processes to protect the health and safety of team members and the community.

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Following his termination, Perry issued a formal apology for his “inappropriate and wrong” behaviour, which he acknowledged resulted in the proliferation of rumours damaging to his teammates and their families. He admitted to seeking mental health and substance abuse support after the incident.

The cautionary tale serves as a tough love reminder that employers with a zero-tolerance policy for harassment or safety violations can and will sometimes make the difficult decision of terminating even a prominent performer. No employee gets a free pass when health and safety is at stake.

There is a concept in employment law called condonation, which means that an employer who fails to discipline an employee for their misconduct for a reasonable period has been deemed to accept the behaviour. One might argue that since the Blackhawks condoned the conduct of the coach in 2010, they cannot now treat Perry any differently. But this isn’t necessarily true, when the employer has worked hard to change its culture. Employees should not expect that employers that have “let things go” in the past will do so in the future, especially when their reputation is on the line and other people’s safety is in their hands.

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It remains to be seen whether Perry will be required to pay back his $2 million signing bonus as well as any payment he had already received for the first quarter of the 2023-2024 season. Perry’s union, the National Hockey League Players Association, has ninety days to grieve the termination, and may choose to raise alcohol use and a potential dependency as a relevant factor. If they grieve, one thing is for certain: the Blackhawks seem likely to put up a fight.

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada. Maria Belykh is a lawyer with Levitt Sheikh.

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