Lawyers representing players from the Calgary Flames and Edmonton Oilers argued before the panel last month that players cannot be locked out under Alberta law.
But the NHL told the panel that the league has always operated under American labour law, adding that it is impossible to have 30 teams operate under the legislation of different states and provinces.
In a ruling released Wednesday, the panel found that while both sides raised a number of interesting legal questions about which jurisdiction's labour laws should apply to this dispute, this was not the time to settle them.
"In our opinion, that issue, which has been left ambiguous by the parties for almost 50 years, is not best answered in the heat of a strike or lockout," the ruling states.
"We have determined that for the purposes of this application, we do not have to resolve the jurisdictional question, because, even if the board has jurisdiction to declare the lockout unlawful, it should not exercise its discretion to do so in these circumstances."
The labour board concluded that intervening in the dispute would "carve one or two teams out from the league-wide structure and replace it with their own individualized collective bargaining relationship."
"Given the unique nature of professional sports and more specifically the NHL and its structure in particular, this makes no labour relations sense."
In a statement posted to the NHL website, league deputy commissioner Bill Daly said that he was pleased with the ruling and commended the board for the "decisive manner in which the matter was handled."
"We are hopeful that this ruling will enable both the league and the NHL Players' Association to focus all of our efforts and energies on negotiating a new collective bargaining agreement in order to get our game and our players back on the ice," Daly said.
The players' association said that it was disappointed with the ruling.
"We will consider our further options with regard to this case," NHLPA said in a news release.
"In the meantime, the players want to play, the fans want to watch the game, and the many workers and business owners who are dependent on NHL hockey for their livelihood want the season to start. We remain committed to reaching a fair agreement at the earliest possible time and hope that the NHL begins to show a willingness to do so."
The NHL locked out the players on Sept. 15th. Talks between the league and the players were scheduled to resume on Wednesday.
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