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What litigators can learn from the Odell Beckham Jr. Nike lawsuit

· 5 minute read

· 5 minute read

Odell Beckham Jr. has been a lightning rod of attention since he stormed into the NFL out of Louisiana State University. His off-field fashion prowess combined with an already distinguished career that includes multiple Pro Bowl selections and a Super Bowl ring has helped his brand become one of the most recognizable in sports.  

And while he contemplates the next steps in his career—the star receiver is a free agent meeting with several teams this winter—he also faces a complex legal battle with retail giant Nike. Beckham brought a lawsuit against Nike seeking reformation of their contract and more than $20 million in damages for breach of contract and breach of the covenant of good faith and fair dealing. 

Before bringing suit, imagine that Beckham contacts counsel’s office to represent him – the opportunity of a lifetime. The only problem is that neither counsel nor anyone else in counsel’s firm has handled a case in the jurisdiction required by the choice of forum clause. Counsel is also unfamiliar with the substantive law of the state set out in the contract’s choice of law clause.  

What can counsel do when tasked with handling a case like this one in an unfamiliar jurisdiction and under substantive law with which counsel has no experience?  

Resources like Practical Law’s newly released litigation playbook can be a powerful tool for litigators looking for jurisdictional-neutral Practice Notes addressing breach of contract and contract-related claims. The Playbook also offers both broadly applicable and jurisdiction-specific resources, like Standard Clauses, Checklists, and Q&As for plaintiffs and defendants in California, Florida, Illinois, New York, Pennsylvania, and Texas with more on the way.  

A quick review of Beckham’s case highlights how counsel can use the Litigation Playbook should they find themselves in a similar situation.  

A bird’s eye view of Odell Beckham Jr. vs. Nike 

The complaint hinges on a discrepancy between Beckham’s original endorsement deal signed with Nike in March of 2014 and the subsequent extension of that agreement beyond its three-year term.  

According to the complaint, Beckham entered a deal that promised him $45,000 a year for three years plus a percentage of net sales for Nike products “bearing his endorsement.” Included in the deal was a clause that gave Nike the “right of first refusal” if they matched any offer made by a competing company after the contract expired.  

Nike exercised that option after Adidas offered Beckham a new deal that included base salaries between $3.2 million and $4.2 million as well as guaranteed royalties and a guaranteed extension based on “net sales” of “royalty generating products.”  

The crux of the complaint stems from a discrepancy between the “term sheet” detailing Nike’s decision to match the Adidas deal and a 2017 Extension Letter designed to memorialize those terms into a Long Form Football Contract. During that process, Beckham alleges there was a language change, unbeknownst to him or his Royalty Only brand, despite the agreement for Nike to mirror the terms of the proposed Adidas deal. 

That language change, said Beckham, altered his compensation structure for certain years so that instead of being compensated based on the difference between “net sales” and his guaranteed royalties, he would be compensated based on the difference between “earned royalties” and guaranteed royalties. It is unclear if that change was made in error or if it was a deliberate attempt by Nike to skirt the terms of the previously discussed deal.  

“Even if Nike had intended to amend the Term Sheet, there was no knowledge or agreement by Mr. Beckham for such an amendment nor any consideration that could support an amendment that decreased the value of the contract to Mr. Beckham by tens of millions of dollars,” reads the complaint.  

Beckham also accuses Nike of actively suppressing the sale of its own products in order to limit Beckham’s revenue and get out of the endorsement agreement. “This represents bad faith conduct by Nike,” alleges Beckman. Beckham seeks reformation of the Nike contract and damages for breach of contract, breach of the duty of good faith and fair dealing, and any other relief the court sees fit. 

Navigate unfamiliar legal terrain with the right resources 

In this particular case, having the right tools, like the latest litigation playbook from Practical Law, and up-to-date legal resources in Practical Law allows attorneys to quickly and efficiently find applicable defenses, available relief, statute of limitations considerations, relevant precedents, and past rulings of the assigned judge, among other relevant items. These are invaluable when litigating in unfamiliar terrain.  

To explore relevant litigation dealing with these claims, or others like it, consider the powerful new playbook, “Litigating a breach of contract action.” Confidence is key when it comes to the courtroom, and the right resources will help get your client in the endzone.

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