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CFLPA makes big changes, parts ways with lawyer Ed Molstad after billing dispute

Ed Molstad (right, in suit) will not be the CFLPA's lawyer going forward in the wake of a billing dispute. (@CFLPA).

After the CFL Players' Association finally ratified a contentious CBA last June, it seemed likely there might be changes coming to the union. Now, almost a year later, some big changes have hit, with the CFLPA posting a letter to all players on its website Saturday night. The biggest change is the association deciding to move on from long-time legal counsel Ed Molstad. According to TSN's Rick Westhead, that decision comes in the wake of some players filing a complaint to the Alberta Law Society about Molstad's fees; that complaint was dismissed in March, but the union decided to go in a different direction anyway.

The CFLPA has now hired Toronto firm Paliare Roland as their legal counsel, appointed former Canadian Labour Congress and B.C. Federation of Labour president Ken Georgetti as their labour management consultant "to oversee all collective agreement matters" and added former CFLer and current TSN analyst and lawyer Jock Climie as a special advisor on structure and operations. Whether these changes will help them avoid repeating what went wrong in the last CBA negotiations is a matter for separate discussion. The removal of Molstad, who had been the union's lawyer since 1974 (one year after he retired following a six-year CFL playing career with the Edmonton Eskimos), is interesting in its own right, though, especially as it isn't just over the poor deal the players got in this last CBA, but rather billing disputes from earlier years. Westhead's description of the complaint is remarkable:

The law society complaint, which was dismissed in March, was filed in November 2014 by 11 players including Hamilton's Marwan Hage, a vice president with the CFL Players Association, Toronto's Ricky Foley, Saskatchewan's Chris Best and Montreal's Marc-Olivier Brouillette.

The complaint, which was obtained by TSN, questions Molstad's billing practices and notes that it was filed reluctantly.

"We file this complaint reluctantly but out of necessity…We simply do not know of another way to address this issue, other than through this complaint," the complainants say.

"We are not experienced business people. Few, if any of us, have experience retaining outside counsel. Frankly, we do not know what is normal and what is not. We certainly do not have the comfort level to question a senior partner of an established law firm who has controlled the affairs of the CFLPA for more than 40 years, " reads the complaint.

One of the main focuses of the complaint appears to be over what happened in 2013. Westhead writes that CFLPA legal fees ranged from $200,000 to $327,500 from 2004-2008, but averaged $608,000 from 2009-2013. The complaint alleges Molstad told CFLPA executives in November 2013 he'd already reached $871,000 in billable fees for the year and would hit over $1 million, but he asked for and received $200,000 in addition to the $400,000 flat fee he's taken in recent years instead. The complaint accuses Molstad of inflating his billing estimates to make the extra $200,000 seem like a good deal. As Westhead writes, the complainants believe even $600,000 was unreasonable by the standards of the field:

"Due to the CFLPA's lack of familiarity with what other unions our size might incur in terms of legal fees we simply accepted Molstad's fees," the complaint says. "We have since been told by numerous lawyers who work in the field that a million dollars in fees for a small, 500 member association is absurd. Even the discounted total of $600,000 is completely out of line for our real needs. This is especially so during a non-bargaining year, which 2013 was."

In a Feb. 14, 2014, email to the CFLPA executive board, Molstad wrote that his firm had agreed to a flat fee "a number of years ago, (after) I was advised that the CFLPA could not afford to pay the hourly rate of the lawyers who were doing the work… this retainer continued when I joined Parlee McLaws LLP in 1995. As the work increased, the sum of $400,000 was agreed to on the basis that it was less than what the CFLPA budgeted for legal fees and it was reasonably certain that the fee posted at the regular hourly rates would be in excess of this amount." Molstad denied participating in any conduct that was improper and added, "It's not proper for me to make any comment at this time," Molstad said when contacted by TSN in February.

What caused so much legal work for the CFLPA in 2013, a non-bargaining year? There's one particular answer that certainly contributed: Chris Williams. The Hamilton Tiger-Cats' wide receiver/returner complained that April that he hadn't been offered a two-year minimum contract during his 2011 contract negotiations (which would have made him a free agent in 2013), only a three-year deal (which violates the CBA; teams are welcome to offer longer contracts, but they must make players aware of the minimums), and that the team violated the CBA by negotiating with an unregistered agent. Williams took the team to arbitration, as outlined in the CBA, but the arbitrator ruled in June that while the Ticats had violated the CBA, that didn't void his contract. That was what got the CFLPA particularly involved; in August, they announced that they were requesting judicial review of the arbitrator's decision given "the implications for all CFL players."

That judicial review paid off; Ontario judge Gladys I. Pardu quashed the arbitrator's decision in late August over a third violation (how the team attempted to exercise their option on Williams), but the Ticats then appealed that further. Things eventually ended with an October settlement that allowed Williams to go to the NFL immediately (which he did a day later) while letting the Ticats keep his CFL rights for 2013 and 2014 (which proved moot, as he was in the NFL both years). In the end, it was a lot of fighting to acheive something that could have been settled much earlier, but that's not particularly the fault of Molstad or the union, as it was the CBA-violating Ticats who were so recalcitrant in refusing to let Williams go (which didn't wind up helping them at all, as he never played for them once the dispute started).

It's understandable that Molstad might have billed more than normal (1,935 hours, according to Westhead's piece) in 2013 with all the legal wrangling over Williams the CFLPA was involved in. In e-mails Westhead cites, Molstad also claims that he was preparing for the 2014 CBA negotiations and faced more travel time and meetings as a result of that. Whether what he billed was reasonable is another matter. It is notable that the law society said his billing practices weren't "fraudulent or at least deceptive" and eventually dismissed the players' claims. However, they didn't dismiss those claims based on whether his billing was reasonable by industry standards, but rather because the CFLPA approved his billing. The law society said the charges themselves were "an issue for the court of Queen's Bench to review." The aggrieved players may still appeal the decision at the law society level, or they may file a civil lawsuit against Molstad. It's possible that this may all be dropped now that they've changed lawyers, though. It's worth pondering if they're really going to save much money, however, as in addition to hiring counsel, they've now added two new advisory positions filled by prominent people in Georgetti and Climie. It seems unlikely that those guys will come cheap.

From the outside, determining exactly what's reasonable for the CFLPA to pay its lawyers is difficult. Molstad argues that he gave the association a discounted rate of $268 per hour, which doesn't seem ridiculously high for a specialized lawyer, and their complaints about his travel time seem particularly odd (billing for travel time is reasonably standard, and if an Ontario-based association overseeing a national game didn't want to pay for travel time, they shouldn't have hired an Alberta-based lawyer). However, the quality of the service Molstad gave them preparing for this last CBA in particular appears quite questionable, and that in particular makes it easy to understand why they're moving on, regardless of whether or not his billing was appropriate by law industry standards. Molstad's gone now, and we'll see if there's further fallout from that, but the key question may be if the new group can help them avoid a repeat of the 2014 CBA disaster. If the union does a better job of negotiating in 2018, great. If not, perhaps Molstad wasn't the problem.