Employment, Not Promotional, Contract at Center of Zuffa v. Couture
Adam Swift Jan 15, 2008
When Randy Couture
(Pictures) announced his resignation
from the UFC on Oct. 11, 2007, it seemed inevitable that the matter
would be settled in court. The inevitable became official on Monday
as Zuffa, parent company of the UFC, filed a complaint against
Couture and yet to be named co-conspirators in Nevada's Clark
County District Court.
Perhaps to the surprise of many observers, the complaint makes no mention of Couture's promotional (fight) contract with Zuffa. Instead the company's breach of contract action is predicated on its employment contract with Couture.
Under the terms of his employment contract, Couture performed
duties as ambassador for the UFC and was on-air talent during UFC
broadcast events.
The complaint alleges that Couture signed a three-year employment contract with Zuffa in December 2006 that included a one-year non-compete provision. Zuffa says that during the non-compete period -- which commenced when Couture "resigned" from the organization last October -- any Couture-associated "business enterprise" is prohibited from "promoting or producing events or programming related to unarmed combat, developing products or services related to unarmed combat, or otherwise conducting any business relating to unarmed combat."
An IFL official told Sherdog.com that the league and Couture don't have a formal relationship.
"Randy is not a signed IFL coach like Pat Miletich (Pictures) or Matt Lindland (Pictures) or Renzo Gracie (Pictures)," IFL Senior VP of Communications Joe Favorito said via e-mail. "We are not using Randy's full name or likeness in any advertising in any way (outside of the Xtreme Couture camp brand)."
Couture's promotional contract with Zuffa is not specifically mentioned in the complaint, however, there is a reference to "certain valid contracts" in the cause of action for interference with contractual rights.
When Couture announced his resignation, Sherdog.com speculated that Zuffa would likely be apprehensive about asserting or challenging the terms of its promotional contract in court. The complaint filed yesterday appears to validate that sentiment by focusing explicitly on Couture's employment contract.
However, UFC President Dana White has steadfastly stated that he believes Couture's promotional contract to be valid, specifically that the agreement has two fights remaining. White has also refused to strip Couture of the heavyweight title in a move that is believed to be designed to strengthen his legal position visa vi the company's promotional contract. Couture has publicly stated his belief that the promotional contract is for four fights or 18 months.
"Randy's lawyers are currently reviewing the lawsuit, obviously, they will respond when appropriate," said Couture's agent, Matt Walker. "I would like Randy's lawyers to finish their analysis before giving you more information. But I would say that, as a general statement, there will be a response at a time and place of Randy's choosing."
In addition to breach of contract, the complaint alleges two other causes of action against Couture: conspiracy to commit tortious acts and injurious falsehood and trade disparagement. The undetermined co-conspirators are also accused of conspiracy to commit tortious acts and injurious falsehood and trade disparagement, as well as interference with contractual rights.
The complaint says that sometime prior to Oct. 11 Couture "devised and began implementing a tortuous scheme and artifice whereby he and others acting on his behalf would fabricate a false and fictitious history of events in which Couture was purportedly lied to and otherwise personally abused by Zuffa in a series of bad faith acts and unfair dealings."
The complaint goes on to state that "the purpose of these false claims was to form a pretextual basis for Couture to claim that Zuffa's senior management was not honest in its commercial dealings and thereby provide Couture with a pretext for dishonoring his own obligations owed to Zuffa. In so doing, Couture and others in concert with him committed a series of intentional torts and breaches."
Zuffa alleges that Couture made false statements -- specifically mentioned are comments made to Sherdog.com on the date of his resignation as well as a press conference and appearance on HDNet -- that were intended to and did in fact result in "inestimable harm" to Zuffa and the UFC. In particular Zuffa alleges that Couture's statements cost the company "certain business opportunities as well as the loss of business reputation and good will" by discouraging others from working with the company.
The complaint specifically lists four "injurious falsehoods and disparaging statements" made by Couture: that Lorenzo Fertitta and Dana White lied to Couture; that Zuffa paid bonuses to fighters that were "off the book"; that Zuffa did not pay Couture a signing bonus; and that Zuffa mistreated Couture and other professional fighters. Zuffa says that Couture knew these statements were false but made them anyway with the intent to harm the company.
The complaint goes on to allege that Couture was induced by as yet undetermined third party defendants to violate his contractual obligations to Zuffa by disclosing confidential information and promoting MMA events in direct competition with Zuffa.
The complaint, and ultimate litigation, appears to be an attack on rival competitors as much as Couture himself. An alleged conspiracy between Couture and unnamed parties is at the heart of the complaint. It begins with a recitation of accomplishments by Zuffa since acquiring the UFC before saying that "regrettably, however, several organizations have sought to unfairly compete against Zuffa and to improperly capitalize on the immense popularity of Zuffa's UFC brand by intentionally interfering with Zuffa's brand and contractual rights. Such is the case here."
Adam Swift is the Editor of Payout: The Business of MMA.
Perhaps to the surprise of many observers, the complaint makes no mention of Couture's promotional (fight) contract with Zuffa. Instead the company's breach of contract action is predicated on its employment contract with Couture.
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The complaint alleges that Couture signed a three-year employment contract with Zuffa in December 2006 that included a one-year non-compete provision. Zuffa says that during the non-compete period -- which commenced when Couture "resigned" from the organization last October -- any Couture-associated "business enterprise" is prohibited from "promoting or producing events or programming related to unarmed combat, developing products or services related to unarmed combat, or otherwise conducting any business relating to unarmed combat."
Zuffa alleges that Couture has engaged in numerous violations of
the non-compete provision, the most recent being the announcement
that an Xtreme Couture team would compete in a Feb. 29
International Fight League event in Las Vegas. The company also
alleges that Couture has permitted the IFL to use his name and
likeness on the IFL Web site in promoting the event. As a result
Zuffa is asking for injunctive relief.
An IFL official told Sherdog.com that the league and Couture don't have a formal relationship.
"Randy is not a signed IFL coach like Pat Miletich (Pictures) or Matt Lindland (Pictures) or Renzo Gracie (Pictures)," IFL Senior VP of Communications Joe Favorito said via e-mail. "We are not using Randy's full name or likeness in any advertising in any way (outside of the Xtreme Couture camp brand)."
Couture's promotional contract with Zuffa is not specifically mentioned in the complaint, however, there is a reference to "certain valid contracts" in the cause of action for interference with contractual rights.
When Couture announced his resignation, Sherdog.com speculated that Zuffa would likely be apprehensive about asserting or challenging the terms of its promotional contract in court. The complaint filed yesterday appears to validate that sentiment by focusing explicitly on Couture's employment contract.
However, UFC President Dana White has steadfastly stated that he believes Couture's promotional contract to be valid, specifically that the agreement has two fights remaining. White has also refused to strip Couture of the heavyweight title in a move that is believed to be designed to strengthen his legal position visa vi the company's promotional contract. Couture has publicly stated his belief that the promotional contract is for four fights or 18 months.
"Randy's lawyers are currently reviewing the lawsuit, obviously, they will respond when appropriate," said Couture's agent, Matt Walker. "I would like Randy's lawyers to finish their analysis before giving you more information. But I would say that, as a general statement, there will be a response at a time and place of Randy's choosing."
In addition to breach of contract, the complaint alleges two other causes of action against Couture: conspiracy to commit tortious acts and injurious falsehood and trade disparagement. The undetermined co-conspirators are also accused of conspiracy to commit tortious acts and injurious falsehood and trade disparagement, as well as interference with contractual rights.
The complaint says that sometime prior to Oct. 11 Couture "devised and began implementing a tortuous scheme and artifice whereby he and others acting on his behalf would fabricate a false and fictitious history of events in which Couture was purportedly lied to and otherwise personally abused by Zuffa in a series of bad faith acts and unfair dealings."
The complaint goes on to state that "the purpose of these false claims was to form a pretextual basis for Couture to claim that Zuffa's senior management was not honest in its commercial dealings and thereby provide Couture with a pretext for dishonoring his own obligations owed to Zuffa. In so doing, Couture and others in concert with him committed a series of intentional torts and breaches."
Zuffa alleges that Couture made false statements -- specifically mentioned are comments made to Sherdog.com on the date of his resignation as well as a press conference and appearance on HDNet -- that were intended to and did in fact result in "inestimable harm" to Zuffa and the UFC. In particular Zuffa alleges that Couture's statements cost the company "certain business opportunities as well as the loss of business reputation and good will" by discouraging others from working with the company.
The complaint specifically lists four "injurious falsehoods and disparaging statements" made by Couture: that Lorenzo Fertitta and Dana White lied to Couture; that Zuffa paid bonuses to fighters that were "off the book"; that Zuffa did not pay Couture a signing bonus; and that Zuffa mistreated Couture and other professional fighters. Zuffa says that Couture knew these statements were false but made them anyway with the intent to harm the company.
The complaint goes on to allege that Couture was induced by as yet undetermined third party defendants to violate his contractual obligations to Zuffa by disclosing confidential information and promoting MMA events in direct competition with Zuffa.
The complaint, and ultimate litigation, appears to be an attack on rival competitors as much as Couture himself. An alleged conspiracy between Couture and unnamed parties is at the heart of the complaint. It begins with a recitation of accomplishments by Zuffa since acquiring the UFC before saying that "regrettably, however, several organizations have sought to unfairly compete against Zuffa and to improperly capitalize on the immense popularity of Zuffa's UFC brand by intentionally interfering with Zuffa's brand and contractual rights. Such is the case here."
Adam Swift is the Editor of Payout: The Business of MMA.
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