Laying down the law: Legal professionals on unions, arbitration courts and contracts

by Sasha Erfanian Mar 15 2017
Thumbnail image courtesy of Lonpicman / Wikimedia Commons

This is the second part of a two-part series. To check out the first part, click here.

Blackouts, sub-par equipment, unusable internet and a manager who wasn't paid for two months: these are just some of the issues Tainted Minds' former LoL roster dealt with before terminating their contracts, according to a Twitlonger from former player, Tristan "Cake" Côté-Lalumière. The AD carry also says he has not received full payment for December or Weeks 3-4 of the OPL spring split.

"The part that bothered me is that every single one of the issues we had could’ve been prevented if Tainted Minds listened to Nick and Fas [the team's coach and manager], who were literally telling them what was happening and how it could be fixed," Cake wrote. "Every times we tried to communicate with the organization, be it through Fas, Nick, or any Tainted Minds employee, it felt like talking to a brick wall. They kept promising us things would get fixed and gave us deadlines, which they NEVER respected."

Cake's sentiment was echoed in a Twitlonger from his teammate, Aaron "ChuChuZ" Bland, who says he took in his fellow dissenters for four weeks as their lawyer attempted to get Tainted Minds to acknowledge they breached contract and remove them from their official roster.

"It started getting really depressing in the house, every day felt like another fight on top of the ongoing discomforts of the house," he said of their last days in Tainted Minds' team house. "The packet loss issue was still going on, and players started considering leaving. The entire atmosphere of the house was crushed, we didn't know what to do."

To date, Tainted Minds have made no statement since announcing their new roster and stating that they would not release the former players.

'It's really tough to ask somebody who might have a year or two worth of playing to sit out for half or all of that time'

For many esports players trapped in legal disputes, filing suit simply isn't a realistic option. Not only can getting a lawyer be prohibitively expensive, but navigating international jurisdictions and a burgeoning field with few legal precedents would be a daunting prospect for anyone, let alone esports players in their late teens or early twenties.

While players on the high-end of the spectrum might be protected by big name organizations and their own social media clout, those on the lower end have no such recourse. So the question remains, what will it take to make those players less vulnerable to predatory individuals and shady orgs?

One solution some have suggested is for esports players to take a page from traditional sports and form player unions and associations. Through a formal union, players would be able to bargain collectively to ensure equitable treatment across teams, as well as pool their resources to pursue legal cases.

"If you can create that kind of organization and you spread it around enough players so that they can pay some dues or something to create some body, then that body can pursue more easily," attorney and FGC commentator David "ultradavid" Phillip Graham said.

"You can sort of spread around the costs of an expensive law suit in a way that would hopefully at least dissuade future teams from making that kind of mistake. If there were some body that had a lawyer on its payroll that could spend the time and money to look into this case, then maybe the next jerk who gets involved in esports who just wants to run away with money thinks twice."

In theory, starting an esports union should function the same way a normal union would. When concerned about conditions at their workplace, a group of employees can form an organizing committee and petition their fellow employees to sign union cards. If more than a certain percentage of the workplace sign the union cards, then the organizing committee can petition their jurisdiction's labor board to hold a formal election to recognize their union. Once recognized as an official union, then employees can negotiate a collective bargaining agreement with their employers, which means the union's representatives would negotiate contracts on behalf of all its members to ensure everyone has equal footing with management.

However, ultradavid also notes that starting a union is easier said than done, especially when many players are independent contractors and not actual employees. An independent contractor is someone who does work or performs a service for a company or organization on a freelance basis, usually retaining autonomy but without the rights, benefits and protection legally afforded to employees under labor laws.

According to Paul H. Haagen, co-director of Duke University's Center for Sports Law and Policy, if players are not actual employees of a team or association, but independent contractors, then they wouldn't be eligible to form a union under U.S. labor laws.

"We want to break down a key word: player. The labor laws only apply if the player is an employee," he said.

"If they are either independent contractors or they're customers, then the labor laws don't apply and they can't unionize. And that's what you would be looking at is something like a trade association."

However, even for teams that are formed of bonafide employees, it may still be impossible for them to form an organization similar to the National Football League Players' Association or National Basketball Players Association. Because traditional sports leagues are all formed by team owners, they can constitute a multi-employer bargaining unit, which is what allows each team's employees to form a single union.

At the moment, no organizations like the NBA or NFL exists in esports, though the Professional eSports Association (PEA) and the World Esports Association (WESA) could potentially fit the definition given time and legal precedent.

According to Haagen, even without multi-employer bargaining units in the esports scene, players could still potentially unionize on a team-by-team basis, so long as, again, they were considered employees and not independent contractors.

"If you have an employer and an employee, and you're in private business and it affects inter-state commerce, then there is at least a potential to unionize," he said.

However, even if there's the slim hope that traditional sports precedent and labor laws could hold up an esports union, the fact remains most players are much younger than most potential unionizers and their careers will most likely be considerably shorter.

"Who knows how long a player is gonna have a playing career? It could be just a few years, if that, and it's very difficult to ask them to potentially sit out for however long it would take to get the owners of teams to recognize a player union, rather than just get some replacement," ultradavid said.

"It's really tough to ask somebody who might have a year or two worth of playing to sit out for half or all of that time. It would be great, I'd love it, I really hope that it happens at some point. It's just probably not something very soon."

'...the people that are actually gonna know a little bit better than a retired judge from the New York Superior Court what the industry standard'

So then, if unions are unrealistic at esports' current level, what other mechanisms could make it easier for players to pursue legal action?

According to Michael Strauss and Chris Hoffman of Reed Smith LLP, one mechanism that's developing are arbitration courts — independent bodies that pass judgement on team and player conflict on behalf of organizations like WESA and Riot Games.

"Riot has recently launched an arbitration court that is right now only handling on the field issues, which would consist of sort of suspensions or fines that the league might be imposing on a team or player," Hoffman said. "And they have not gotten into these sort of internal team housekeeping issues yet, but the WESA arbitration court is much broader and would be potentially an avenue that players and teams can take advantage of when these types of internal disputes arise."

Though both Riot and WESA's arbitration courts are still in their fledgling stages, the two say that one substantial advantage arbitration courts have over the legal system is that the adjudicators themselves understand the scene and don't have to interpret traditional legal precedent in the context of esports.

"When you go to an arbitration court that is esports-specific for example, they are going to understand the types of compensation that players are earning. The amount which is industry standard for some of these players and what would trigger, what would be a reasonable amount of money," Strauss said.

"And so when you talk about player recourse and team recourse for that matter, you can end up in an esports specific arbitration court like WESA, and have the people that are actually gonna know a little bit better than a retired judge from the New York Superior Court what the industry standard is for paying a player for prize moneys or salary, or their Twitch channel."

'All they look at is the amount listed on the contract and that kind of thing, if they even look at that. Sometimes they just sign.'

Ultimately, with unions and arbitration courts unrealistic for the majority of amateur and semi-pro esports players, the best thing someone can do to protect themselves is to know their rights, know their contracts and take care of as much of their own business as they can.

For instance, claiming your own prize money instead of allowing your team to accept on your behalf may result in extra taxes but doesn't run the risk of losing out on the money entirely, as happened to former Invasion eSport players Kevin "Harstem" de Koning, Juan Carlos "MajOr" Tena Lopez and Julian "Lambo" Brosig.

Harstem says that he strongly regrets allowing Invasion to handle his prize money and allowing them to regularly dole out his payments late until his former manager, Sebastien "Sebou" Dang, disappeared with several thousand dollars of his, MajOr's and Lambo's prize money.

"Don't accept late payments. Even if you know the people, have like a maximum amount of time for yourself what's late, handle your own prize money," he advised. "Make a — I'm not sure what it's called in English — but like a one-man company so you can basically get your own prize money immediately to you. It's a lot easier with taxes as well."

"When I have clients who are making a deal with a team that I don't know very well, that I don't have a ton experience with, I always try to get it so the money goes directly to them first, then they share whatever the amount is with the team if there is some split," ultradavid said.

He also says it's very important for players to do research on orgs before signing with them. Simply taking someone's word that they're on your side is just not enough.

"You have to look into who's behind the money, you have to look into what their incentives are, look into what the long-term plans of the organization are. Those are all really important things to look through from the players' perspective so that you can minimize the chances that you sort of get in bed with a huckster. You don't want to do that," ultradavid said. "Too often I have had clients or known about other players who get an offer and all they look at is the amount listed on the contract and that kind of thing, if they even look at that. Sometimes they just sign."

As chair of Duke's Student-Athlete Counseling Committee, Haagen has helped numerous young athletes transition from collegiate sports to the big leagues. One thing he cautions any young player to do before they sign a contract is understand how it could affect them deeper into their career.

"I had a baseball player and he was presented with a contract and I said, 'You understand you're giving up the rights to your name in connection with baseball as long as you are a professional athlete,'" Haagen recounted.

"And then he did and I said, 'You understand, you are being paid two very fancy gloves a year, that's what you get out of this. You're giving up this right.' And he said, 'Yeah, I understand it. These are really good gloves and I intend to go to medical school in a year. So y'know, play a year in the minors, have that experience, maybe write something about it, and then I'll go to medical school.' Well, you played in the Major Leagues for 13 years."

One issue that plagues esports much more than traditional sports are people playing for teams without contracts. While less common these days, especially in the gentrifying fields of LoL and CS:GO, the issue still persists, sometimes in teams at the highest peaks of their respective sport. For instance, though Jackie "EternalEnvy" Mau and Rasmus "MiSeRy" Filipsen claim that Team Secret failed to live up to their promises, they nor any of the other players on the roster had contracts.

Though that fact makes a potential legal case exponentially more difficult, Hoffman and Strauss say it wouldn't be impossible. According to them, even without written contracts, players can argue that they had an oral agreement in place with the org or can invoke the Unjust Enrichment theory.

“There is a legal theory, an equitable legal theory, called Unjust Enrichment. And if you can demonstrate that as a team or a player, you've rendered services to the other party, then you're entitled to be compensated for those services,” Hoffman said. “It does bring up issues of definiteness and exactly what the parties agreed or what the value of those services are in that, that can be especially tough to determine in an industry as unique as esports.”

Laying down the law

Despite examples like the situations facing Tainted Minds' former LoL roster and the ex-Invasion StarCraft players, the esports world has made great strides towards legitimacy.

According to Hoffman and Strauss, the best solution may simply be letting nature take its course as more outside investment pours in bringing with it the influence of big money sponsors and business people who won't stand for legal drama.

"Esports as an industry is going through growing pains and that's counter-balanced by just the exponential growth that we've seen and the growth opportunities that lay ahead. And as teams, players and other stakeholders all are sort of figuring out the best ways to monetize in this industry and to realize on their investments," Hoffman said.

However, for the players forced to navigate the barely-charted legal and contractual territory of esports all on their own, Harstem has one piece of advice.

"Don't get ******* over guys."

Sasha Erfanian is a news editor for theScore esports. You can follow him on Twitter.