CHAPTER 6 CON TRACTS AN D SPORTS: EN FORCEMEN T I. Introduction Chapter 6 introduces the students to various aspects of sports contract enforcement. Included among the messages that this chapter hopes to send are the following: 1) Affirmative injunctions are unavailable in a personal services contract, due to problems of involuntary servitude and difficulty of administration. Students should be reminded that if an athlete were compelled to play for a particular team it would be impossible to assert whether subsequent poor performance is due to insufficient skill or contempt for the court's order; 2) Due to the difficulty of determining damages with any reasonable certainty there is seldom an adequate remedy at law when a player jumps a contract to sign a contract to play for another team. For this reason, and the rationale explained above, the jilted team's choice of remedy against the player is limited to an injunction enforcing the negative covenant. In seeking such relief, the plaintiff will have to establish the existence of a valid contract and satisfy the traditional standards of equity. See N&Q 3 on page 209. The critical overarching inquiries in these cases center on the reasonableness of the negative covenant and the uniqueness of the athlete; 3) Because the relief sought is equitable in nature, plaintiffs must come to court with clean hands. Given the fierce bidding wars for players' services and the tenuous nature of early player contracts, player raiding was not uncommon, and clubs who were "raider- turned-victim" often found themselves charged with being in pari delicto when they sought to enforce their negative covenants. II. The Negative Injunction Case: Central New York Basketball, Inc. v. Barnett Primary reason for inclusion: To present interpretations of the term "unique" as applied to a professional athlete and to provide an overview of the prerequisites to injunctive relief in the typical contract-jumping scenario. Points to emphasize: 1) Defendant Dick Barnett's standard player contract explicitly identified him as a unique player. Query: Should that boilerplate language end the inquiry into the player's uniqueness and virtually preempt any discussion of the irreparable injury issues? 2) The portions of the transcript where the parties were falling over themselves trying to show (from the plaintiff's standpoint) that the player is irreplaceable and (from the defendant's standpoint) that the player is possessing of only the most ordinary skills are both humorous and sad. In all likelihood, the transparency of such remonstrations should be obvious to any fact finder. 3) The modern definition of uniqueness seems to be based upon considerations of how difficult it is to replace the defendant player. Yet, there is language suggesting that all professional basketball players are unique. Again, if this definition of uniqueness were to be employed, then the irreparable injury component of the equitable equation would seem to be eviscerated in professional sports contract-jumping cases. Notes and Questions: N&Qs 1 through 4 summarize the variables to be considered in injunction cases such as Barnett. They also make clear that arguments attacking the standard player contracts on grounds of lack of mutuality are dated and ineffectual. Again, these notes will have more meaning if discussed with reference to the appropriate portions of Chapter 4. Also, the standard player contract should be addressed, particularly the uniqueness language in Paragraph 9. N&Q 5 requires students to visit other portions of the standard player contract and familiarize themselves with option and renewal clauses, as well as the circumstances surrounding a club's exercise of an option. Recent collective bargaining agreements have called for the removal of option clauses as part of the standard player contract language. N&Q 6 explores the balancing of equities and asks whether the result may have been different if Barnett were a player of considerably fewer talents. The answer is perhaps yes for a few reasons. First, the uniqueness component, barring an automatic finding of uniqueness predicated on Paragraph 9, may not have been satisfied. Second, balancing the respective hardships, a court may have indulged the player's attempt to better himself, especially because the plaintiff-club's competitive advantage would not have been severely compromised. N&Q 7 considers alternative remedies that the plaintiff could have pursued. It bears mention here that in cases such as Barnett the plaintiff may have causes of action grounded in both tort and contract law. This point could be relevant for several reasons, including the preservation of a delayed lawsuit where there may be different statute of limitations periods. At this stage, it is recommended that a brief discussion of tortious interference with contractual relationships be entertained; however, full-blown examination of this topic should probably be left for subsequent classes. N&Qs 8 through 11 focus upon the competitors' injury and the balancing of hardships as parts of the injunction calculus. This topic can provoke a lively classroom debate in the sense that one side may argue forcefully that enforcement of the negative covenant by injunction is the only relief available against a player who repudiates his or her contract with impunity. They would contend that the degree of competitive injury or the weighing of respective adverse consequences should be irrelevant to the appropriateness of injunctive relief. The other side will argue that in some circumstances there is not a "no harm-no foul" situation. Thus, no injunction is needed if the individual player and/or the new club/league are well-served by the contract abandonment and the jilted club is really none the worse for wear. N&Q 12 presents the general view that there is no adequate remedy at law in these types of cases; yet, the possibility of a damage award cannot be discounted. The students should be asked to develop their own theories of monetary recovery and to assess the viability of the theories posited in N&Q 12, itself. Cases: Madison Square Garden Boxing, Inc. v. Shavers Primary reason for inclusion: To present an injunction case in a non-team sport context as well as to consider the reasonableness of the negative covenant and its impact upon the uniqueness question. 2 Points to emphasize: 1) The court was unwilling to disturb the finding of the boxing commission -- although it acknowledged that it had the authority to do so. This deference to the expertise of a lower, non-judicial authority is a recurrent theme in the text and sports jurisprudence generally. See Chapters 3, 13, 14, 15, and 16. 2) The parties' credibility had a great deal to do with the court's ultimate conclusions. Here, students should be reminded of the idiosyncracies of the industry involved and how they may form the predilections and inform the judgment of adjudicating bodies. The public's perception is that the boxing business has not been peopled by persons of unimpeachable character and integrity. Doubtless, as reputations are formed, and reinforced by the decisionmakers' observations of testimony, the outcome of a case can be dramatically affected. 3) Footnote 11, referred to in N&Q 5, seems to have far-ranging consequences, suggesting not only that negative covenants can be implied and inferred from the fact of an athlete's unique talents, but also that professional athletes are unique per se. In N&Q 5, we consider just how significant such an implication or inference can be. 4) The injunction in this case precluded Shavers from fighting until "October 11 or such earlier time as he fulfills his contractual obligations to the plaintiff." Students should be asked whether this relief was consistent with the relief requested by the plaintiff. If not, what did the court do in fashioning its remedy? See discussion of N&Q 2, below. Notes and Questions: N&Q 1 necessitates a review of problems presented by oral agreements that are not intended to be effective until memorialized in a subsequent writing. Here, the right of first refusal language had not been properly memorialized and any mention of those terms in the telegram was omitted in the "final" written correspondence. N&Qs 2 and 3 deals with overly broad negative covenants. Courts often will correct the evil of an unreasonable covenant by interpreting it in a purposeful way or narrowing its unconscionable scope by construction. Students should be advised that this approach has a certain curb appeal and seems to place everyth in g in equipoise. However, from a long range perspective it may be harmful to the general contracting process because it does little to discourage the insistence upon adhesive provisions by the party in the stronger negotiating position. This type of analysis can present difficulties for students who feel that they are being trained to negotiate the best deal for their clients only to be told now to "soft-peddle" the killer bargaining and reach accord on a reasonable negative covenant. The message is that sometimes "less is more." N&Q 4 asks a somewhat rhetorical question. The statute doesn't apply because the contract is certainly capable of performance within a year and no other provisions of the statute are implicated. The limited purpose of the question is to differentiate the need for a writing "by law" from the need for such a writing by stipulation of the parties or on a showing of the requisite intent to be bound. N&Q 5 raises the issue considered above in the Points to emphasize section. The court comes close to suggesting that a breach of contract between an athlete and club or promoter will 3 inevitably trigger issuance of injunctive relief. If a boxer's talents are presumptively unique (as declared by the court in Footnote 11), and if such status de facto justifies the implication of a negative covenant, then the finding of a valid contract will necessarily pave the way for injunctive relief with little opportunity for resistance.