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Wednesday, January 16, 2008
Opinion: Thoughts on UFC's Lawsuit Against Randy Couture
I haven't been writing a lot of news stories lately, but I have been making a lot of message board posts, primarily on the MMAWeekly SoundOff Forum. As you may have heard, UFC parent company Zuffa has filed a lawsuit against Randy Couture, who came out of retirement in early 2007, won the UFC Heavyweight Title from Tim Sylvia, defended the title against Gabriel Gonzaga, and then resigned from the company after he claims he was lied to and disrespected by Zuffa's management.

Couture has maintained from the time of his resignation that he will be contractually free and clear from the UFC in October 2008, which is one year from the date of his resignation. The UFC has publicly and privately maintained that they will fight this and will do everything in their power to prevent Couture from fighting for another MMA organization at any time, whether it's before or after October 2008. It has been expected for the last several months that a lawsuit was forthcoming, and here was my initial reaction after the news of the lawsuit broke, as I wrote on the MMAWeekly SoundOff Forum:

"It’s hard to say how this case is going to turn out, but I’d expect that Randy Couture would defintely be bound to Zuffa until October 2008, and that the one-year no-compete clause after that would also probably hold up in court because no-compete clauses of one year or less usually do hold up in court.

So, at that point it would be October of 2009 and Couture would be 46 years old. The obvious question at that point is, “What could Couture possibly accomplish in MMA when he’s 46 years old?” but then again Couture defied the odds at 43 years old to win the UFC Heavyweight Title and then successfully defended it when he was 44 years old, so who knows?

The issue goes beyond October of 2009, however, as Zuffa is essentially trying to make Randy Couture their property for life with these clauses regarding contracts being able to be “extended indefinitely” if a fighter is unable to accept a fight for any reason whatsoever (whether it’s injury, resigning from the company, or anything else). That amounts to a no-compete clause for all of time, and there’s no way that is legal or would hold up in court. No-compete clauses lasting more than one year have a horrible track record of holding up in court.

Heck, the UFC wouldn’t have been able to sign their latest headliner, Brock Lesnar, if not for the fact that WWE was basically getting their ass kicked in court when they tried to enforce the six-year no-compete clause that Brock Lesnar signed (as part of the WWE contract from which Lesnar quit just months after signing due to the stress of being on the road in WWE).

In addition, the so-called “champion’s clause,” where the UFC tries to essentially claim ownership of a fighter if he is one of their champions, is not likely to hold up in court. In a previous case where BJ Penn won a UFC title on the last fight of his UFC contract and then went to fight for more money in K-1 Hero’s shortly thereafter, Zuffa sued him on the grounds that the “champion’s clause” in the contract that he signed should have made him bound to Zuffa even though his title victory over Hughes was the last fight on Penn’s contract. As with Lesnar and WWE, that was not going well for Zuffa in court and just as with Lesnar it led to a rather one-sided settlement that very much favored the individual (Lesnar, Penn) over the corporation (WWE, Zuffa).

Couture's involvement with the IFL would be a fairly blatant violation of Couture’s no-compete clause if he was actually the coach of that team in the IFL, but he’s not, nor was he ever scheduled to be. Shawn Tompkins is. The only potential issue there is the fact that the word “Couture” is in the name of the gym that Shawn Tompkins coaches out of (ie, “Team Xtreme Couture”). This could be a non-issue if they just change the name of the IFL team to “Team Tompkins,” with the same coach that it was always going to have: Shawn Tompkins.

So, basically, Zuffa would obviously have an air-tight case when it comes to their contract with Randy Couture through October 2008, and would probably have a good case when it comes to the one-year no-compete clause if indeed there is such a clause in the contract with very clear language detailing it, so that would lock Couture up contracually through October 2009, but beyond that, I think they have a very weak case as far as their efforts to lock Couture up contractually for the rest of his life."

Hours later, news broke from Adam Swift of MMAPayout.com that despite all of Zuffa's statements in recent months, weeks, and days focusing on Couture's fighting contract with the UFC, Zuffa's lawsuit against Couture doesn't even mention his promotional contract (ie, fighting contract). Instead, Zuffa is trying to achieve the same goal (preventing Couture from fighting elsewhere) via the indirect method of alleging breach of contract on Couture's other UFC contract: the "employment contract" under which he served as a color commentator and goodwill ambassador for the UFC. Here is the forum post that I made after this information came to light, again on the MMAWeekly SoundOff Forum:

"It's interesting to note, as MMAPayout's Adam Swift has, that Zuffa's lawsuit against Couture only mentions his employment contract with Zuffa (ie, commentating duties), not his promotional contract (ie, fighting). Even though all of Zuffa's public statements up to this point have been all about the fighting contract, the lawsuit itself doesn't allege that he breached his fighting contract, it only alleges that he breached his employment/commentating contract.

And by Zuffa's own admission in the lawsuit, he does have the right to resign from his employment contract and then work elsewhere following a one-year period from the date of his resignation, so that would only tie him up contractually through October 2008, which is the date that Couture has been publicly citing all along as the date when he believes he'll be contractually free and clear from the UFC. According to the detailed article by Adam Swift, there is nothing in the lawsuit talking about the promotional contract (ie, the fighting contract) at all, which would mean that there's nothing in the lawsuit disputing that October 2008 timeframe.

What is in the lawsuit, however, is Zuffa's attempt to get an injunction that would serve as a temporary restraining order to prevent Couture from "competing with the UFC" during that time period, and that would include fighting for any other organization. We've known for months that Zuffa's legal position is that they're going to do everything in their power to prevent him from ever fighting for another organization, so ultimately what they want here is a temporary injunction leading to a more long-term injunction.

By only focusing on the commentating contract and not the fighting contract in this initial lawsuit, what they've done is basically make a strategic decision to try to attain their end-goal here (which is an injunction preventing Couture from fighting anywhere else), without having to actually claim or prove a breach of contract on his actual fighting contract. If a judge agrees with the case that they've laid out, they could theoretically get an injunction that prevents Couture from fighting without ever even directly challenging his right to fight elsewhere after a certain date.

The reason this is vitally important is because it gives them the chance to potentially get what they're ultimately seeking (an injunction that prevents Couture from fighting elsewhere) without having the legally questionable aspects of their fighting contracts potentially thrown out of court. (In particular, the de-facto no-compete-clause-for-life would likely never hold up in any court, and the so-called champion's clause would be unlikely to hold up in court very well, either, since it didn't hold up very well in the BJ Penn lawsuit.)

If they had sued Couture directly on the basis of a claimed breach of contract on his promotional/fighting contract, then they'd be seeking what they ultimately want, but they'd be doing so at the risk of getting some of their key contractual clauses thrown out of court and declared invalid, which would affect a lot of other UFC contracts.

By only suing on the basis of the employment/commentating contract for now, they're still seeking the injunction that they ultimately want, but without the risk of having to put the aforementioned contractual clauses under legal scrutiny.

I would expect that when or if anything goes poorly for Zuffa's side in this legal case, or it looks like there's a good chance they're not going to be getting the injunction that they're seeking via this particular lawsuit, then at that point you can expect another lawsuit to be filed with the full gamut of legal claims about Couture's actual fighting contract. What has happened up to this point has essentially just been a gamble to see if they can get that injunction without having to subject all of their fighter contractual clauses to legal scrutiny."

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