In September, Knowles, the owner of a professional hockey club, began negotiatio

Question

In September, Knowles, the owner of a professional hockey club, began negotiations with Meyer, a professional hockey player, for Meyer’s services for the following two years. The two agreed orally to a salary of $3000 a week for Meyer during the training and playing seasons. At the time, Meyer asked whether players would be covered by workers’ compensation insurance if injured. Knowles replied that the club’s lawyer has advised that players were not covered, but that in any event he was having written contracts drawn up by the lawyer in which a clause would provide that every paler would be insured against injury and that if a player were disabled he would be looked after.
Written contracts were then prepared and presented to all the players (including Meyer) for signing. The contracts in their written form stated the agreed salary for each individual player and outlined the usual conditions regarding the player’s obligations to the club, but there was no reference to insurance protection against injury or to the employer’s obligation in the event of a player being disabled.

Meyer played for the team for 6 weeks and then received a serious eye injury to his eye during a hockey game. He was immediately taken to the hospital. At the end of the game, Knowles announced to Meyer’s teammates in the dressing room that he would pay Meyer’s salary to the end of the season.

Knowles paid Meyer’s salary to the date of his injury and refused to pay any additional sum. Meyer brought an action for damages claiming $5000 representing his salary for the remaining 15 weeks of the season; $500 for the cost of the artificial eye and general damages as compensation for the loss of his eye.

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Q1. What are the legal issues involved in this case?
Q2. What arguments would each side make in this case?
Cite any relevant cases.
Q3. What do you believe the courts would decide? Explain your answer.
Q4. What are some lessons business professionals can learn from this case?

Explanation / Answer

While this is purely a legal expertise based question, we can try to answer this based on plain and simple logic.

Q1. The key issue behind this case is the breach of trust. Note that I am not calling it a breach of contract, which would have made it a strong contender for a case winner at the court. Meyer was told verbatim by the team owner that he would be taken care of and insured in the event of the injury. However, Meyer was not offered what was promised. From Meyer's perspective, it is a breach of trust, but note that there was no documentary evidence here.

From Knowles' perspective, while he would know internally that he has wronged Meyer, he has cleverly avoided any paper trail which would have obligated him to compensate Meyer in the event of an injury. Hence, he is reasonably safe from a legal perspective.

Q2. Meyer's argument would be solely based on the verbal dialogue that Knowles had with him during the player negotiation - that Meyer was promised he would be insured for injury and would be taken care of in the event of any disability. He would probably also get in a few of his teammates to testify what Knowles has mentioned in the team meeting about paying Meyer his salary till the end of the season.

Knowles' argument would be simple - Please read the contract. There was no mention of any medical insurance or for any compensation/looking after if the player was insured. This was also signed and accepted by Meyer. Hence, Knowles is not obligated to pay Meyer or look after him at this point. He only had to pay him his salary for his game time, which he did. He can further even say that due to this injury, he has fallen short of players which is affecting his team's performance.

Q3. While the court would ideally know who has wronged, courts typically go only with hard evidence. In this case, Meyer does not have any documentary evidence in the form of a contract. Knowles does have evidence to prove his case. Hence, it is very much likely that the court would favour Knowles.

Q4. One key learning for business professionals is that while trust is a good thing, always have everything documented. Not documenting key actions/points in any business activity can lead to serious repercussions later on, and can also lead to false cases being fabricated against you. This can also lead to breach of trusts easily - you might deliver what was promised by you, but the other party might not end up delivering what was promised, all because it was never documented. Hence, always document everything in any business activity. This is the key learning.

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