What Lawyers Can Learn from the Odell Beckham Jr. Nike Lawsuit

Odell Beckham Jr. has attracted significant attention ever since his entry into the NFL from Louisiana State University. His unique fashion sense, combined with an impressive career that includes multiple Pro Bowl selections and a Super Bowl ring, has made him one of the most recognizable figures in sports.

While contemplating his next career move as a free agent meeting with various teams this winter, Beckham finds himself embroiled in a complex legal battle with retail giant Nike. He has filed a lawsuit against Nike, seeking a reformation of their contract and claiming damages of over $20 million for breach of contract and breach of the covenant of good faith and fair dealing.

Imagine that Beckham reaches out to a law firm to represent him – a once-in-a-lifetime opportunity. However, there’s a catch: neither the firm nor any of its members have experience handling cases in the required jurisdiction specified by the choice of forum clause. Additionally, they are unfamiliar with the substantive law of the state mentioned in the contract’s choice of law clause.

So, what can the lawyers do when faced with the challenge of handling such a case in an unfamiliar jurisdiction with no prior experience in its substantive law?

One valuable resource that can assist litigators in this situation is Practical Law’s recently released litigation playbook. This powerful tool provides litigators with jurisdiction-neutral Practice Notes that address breach of contract and contract-related claims. The playbook also offers a range of resources, including Standard Clauses, Checklists, and Q&As, both broadly applicable and specific to jurisdictions such as California, Florida, Illinois, New York, Pennsylvania, and Texas, with more to come.

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By reviewing Beckham’s case, lawyers can understand how they can utilize the Litigation Playbook when facing similar circumstances.

A Detailed Look at Odell Beckham Jr. vs. Nike

The crux of the complaint revolves around a disparity between Beckham’s original endorsement deal signed with Nike in March 2014 and the subsequent extension of that agreement beyond its initial three-year term.

According to the complaint, Beckham initially agreed to a deal that guaranteed him an annual sum of $45,000 for three years, along with a percentage of net sales for Nike products featuring his endorsement. The agreement also included a clause giving Nike the “right of first refusal” if they matched any offer made by a competitor after the contract’s expiration.

After Adidas offered Beckham a new deal, including base salaries ranging from $3.2 million to $4.2 million, as well as guaranteed royalties and an extension based on “net sales” of specific products, Nike exercised their right of first refusal.

The crux of the complaint lies in a discrepancy between the “term sheet” outlining Nike’s decision to match the Adidas deal and a 2017 Extension Letter intended to formalize the terms into a Long Form Football Contract. During this process, Beckham alleges that there was a language alteration, unbeknownst to him or his Royalty Only brand, despite the agreement for Nike to mirror the terms of the proposed Adidas deal.

Beckham claims that this language change affected his compensation structure for certain years. Instead of being compensated based on the difference between “net sales” and his guaranteed royalties, the change resulted in compensation based on the difference between “earned royalties” and guaranteed royalties. It remains unclear whether this change was made in error or as a deliberate attempt by Nike to evade the previously agreed-upon terms.

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According to the complaint, “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.”

Beckham also accuses Nike of actively suppressing the sale of its own products in order to limit his revenue and void the endorsement agreement. These actions, according to Beckham, constitute bad faith conduct by Nike. As a result, Beckham is seeking reformation of the Nike contract, damages for breach of contract and breach of the duty of good faith and fair dealing, as well as any other relief deemed appropriate by the court.

Navigating Unfamiliar Legal Territory with the Right Resources

In cases like this, having the right tools and up-to-date legal resources is crucial. Practical Law’s latest litigation playbook equips attorneys with the necessary resources to quickly and efficiently find applicable defenses, available relief, statute of limitations considerations, relevant precedents, and past rulings from the assigned judge, among other relevant items. These resources are invaluable when litigating in unfamiliar territory.

“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.”

Garrity Traina