Month: September 2018

Contracts and Agreements Continue to be Contentious Within the E-Sports Community

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In any business venture, contracts are essential to keeping and maintaining partnerships. Keeping the ins-and-outs of what each person’s responsibilities include can help to preserve expectations and keep morale high among those involved. Within the esports industry, however, contracts and agreements have remained contentious. In a previous blog, we had detailed how the esports industry was rocked by a recent lawsuit between Turner “Tfue” Tenney and his former esports organization Faze Clan. Now, Faze Clan has filed a countersuit against Tenney to block his attempts to allegedly disparage and leave the organization.

Faze Clan alleged Tenney violated his contract by disparaging the company and attempting to form a rival esports organization. In addition to these claims, Faze Clan stated Tenny made more than $20 million in streaming, gaming endorsements, and sponsorships, and that he, “shared almost none of this income with Faze Clan.” The business plans to seek compensation from Tenney for its services and unspecified damages under the terms of the contract. Faze Clan is also seeking injunctive relief to prevent Tenney from revealing any confidential information about Faze Clan, disparaging the company publicly, and potentially interfering with its current roster of talent.

In the initial suit filed by Tenney, he claimed Faze Clan failed to pay him his share of brand deal revenue and grossly undercut his earnings. Tenney’s suit also claimed Faze Clan had the right, according to Tenney’s contract, to take up to 80 percent of his earnings in certain situations; this, however, was denied by Faze Clan who claimed it had never done so.

The countersuit against Tenney alleges his actions have resulted in “serious damage,” that could affect members of Faze Clan’s team. In addition to this, the suit also claims Tenney’s goal is to set up a rival esports company, alleging that “Tenney is taking the valuable information he learned from Faze Clan, which he is obligated to keep secret, and using it to create a rival to Faze Clan or otherwise support rival gamers and gaming organizations.”

Tenney is very popular on the live-streaming platform Twitch and is one of the network’s most popular and subscribed-to streamers. He also happens to have more than 10 million subscribers to his YouTube Channel. Tenney initially signed with Faze Clan in April 2018. The contract specifically stated Faze Clan would receive 80 percent of all revenue Tenney made through sponsored video content on Twitch and YouTube. However, Faze Clan’s countersuit claims Tenney experienced a boost in popularity after partnering with them. This rise in online stardom is what helped him earn millions of dollars.

“Faze Clan taught Tenney how to be more than just a skilled gamer,” the countersuit reads. “Faze Clan taught him to be a professional. It schooled Tenney in the business, social media and gaming practices that have made Faze Clan successful. And he certainly has been successful. It is understood that Tenney has earned over $20 million since joining Faze Clan in April 2018, when he was earning virtually nothing.”

While both lawsuits are currently ongoing, it’s clear contracts and agreements within the esports industry will require further regulation and the assistance of experienced legal counsel in the future.

Houston Commercial Litigation Attorneys

 When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. The commercial litigation lawyers at Feldman & Feldman have successfully handled business disputes for over 40 years. If you need legal advice regarding a business issue, contact the experienced attorneys at Feldman & Feldman today.

The Wild West of E-Sports Contracts and Agreements

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The esports industry (also referred to as electronic sports, e-sports, or eSports) has taken off since the late 2000’s, and generally refers to organized, multiplayer video game competitions. The rise in popular live streaming services tailored to gaming, such as Twitch and Mixer, have only helped to catapult the esports industry into something that many have never quite seen before – including estimated audiences of 454 million viewers in 2019 and over $1 billion in revenue. Such growth within the esports and online gaming community has given rise to professional gamers. However, this acceleration of popularity and fame amongst these young players, combined with the utter newness of the esports industry, ultimately begs the question of how contracts and agreements among management are handled.

While many may be familiar with the popularity of the esports industry, they may be unaware it is functioning in a largely unregulated space. For instance, there is a lack of standardized contracts for professional players, no collective bargaining agreements, and no established standard working conditions. One player in particular who is quite familiar with this lack of regulation is professional Fortnite player, Turner ‘Tfue’ Tenney. Tenney recently found himself embroiled in a bitter contract dispute with his former esports team, Faze Clan. Tenney claimed a breach of contract occurred as well as unfair business practices during his time with Faze Clan.

In May of this year, Tenny’s lawyers filed a suit against Faze Clan arguing the Gamer Agreement or contract the parties agreed to back in April of 2018 was grossly oppressive, onerous, and one-sided in favor of Faze Clan. Amongst these claims, the suit alleges the Gamer Agreement contains unlawful exclusivity provisions and is in violation of California’s current agency laws, and that Faze Clan breached its fiduciary obligations owed to Tenny by unreasonably rejecting sponsorship deals. Tenney is seeking for the Gamer Agreement to be rendered void and unenforceable, and that Faze Clan should be required to disgorge and repay Tenney all the money he earned as a result of the Gamer Agreement.

The specifications within the suit detail Tenney’s complaints that the Gamer Agreement entitles Faze Clan to a finder’s fee of up to 80 percent of the revenue paid by third parties for Tenney’s gameplay. Additionally, it is alleged the Gamer Agreement contains certain anti-competitive provisions amounting to an unlawful restraint of trade. Specifically, the Gamer Agreement restricts Tenney to sponsorship deals exclusively sourced by Faze Clan and provides that Tenney cannot obtain his own deals without the prior written consent of Faze Clan.

Faze Clan have ultimately denied all allegations made by Tenney, and have released a public statement claiming it has not collected any of Tenney’s tournament winnings or non-esports related revenue. Faze Clan further states it has only received $60,000 in relation to the Gamer Agreement, while Tenney has made “millions” by association with the Faze Clan name. A key argument the team is expected to make is that Tenney voluntarily and lawfully signed the contract as an adult that he is now protesting.

Unfortunately, this will likely not be the only contract dispute case to emerge from the esports industry. While conventional professional athletes have a team of managers, agents, and even lawyers to protect their best interests, ensure proper pay, and a healthy work environment, this isn’t necessarily the norm for the esports world quite yet.

Houston Commercial Litigation Attorneys

For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. Our legal team passionately pursues each case with skill and tenacity, but without the overhead of a large law firm. Contact the experienced attorneys at Feldman & Feldman today.

Do The National Association of Realtors’ Rules Stifle Competition?

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It’s no secret that commission plays a big role when it comes to working in the sales industry. Not so different from servers or bartenders receiving tips as the majority of their pay, a sales commission is the additional compensation one would receive for exceeding the minimum sales threshold. However, what happens when sales opportunities are avoided because the expected commission is lower than most? For the National Association of Realtors (NAR), this situation is all too familiar.

Keller Williams, the Austin-based residential real estate company, is facing backlash for its training policies. This has resulted in a class-action lawsuit challenging the commission structure on home sales brokered by members of NAR. The case itself revolves around whether or not NAR rules stifle competition by requiring listing agents to say up-front exactly how much of their sales commission will be shared with buyers’ agents.

The sellers who initially brought on the lawsuit argued agents actually avoid listing and/or showing certain properties that offer lower commissions, which can create an environment that stalls commission rates at around three percent for each cooperating agent. However, the NAR and the brokerages named in the litigation have asserted the defendants are mischaracterizing the rules.

Keller Williams is a defendant in the newly filed class-action lawsuit that consolidated previously filed litigation in Minnesota, along with suits filed by a half-dozen other plaintiffs. The class action suit goes into greater detail than the original complaint, citing the NAR training of real estate agents at Keller Williams University as evidence agents have less incentive to show homes with low commissions.

If a judge decides to strike down the standard practice of splitting commissions, it could have the potential to save a homeseller thousands of dollars in commissions by forcing more buyers’ agents to negotiate their pay or shift their fees to buyers. It would also result in cutting the earnings of real estate agents across the country and put more pressure on traditional brokerages.

The class action complaint includes a script allegedly used to train real estate agents dealing with a seller who wishes to reduce the buyer commission to save money. “When you reduce the commission, you reduce the incentive for that agent to bring a buyer to your house,” the agent in the script explains, according to court documents. “If an agent has 10 different houses, nine of which come with a 3 percent commission, one of which comes with 2.5 percent commission, which houses do you think they’re going to show?”

While NAR defends its commission structure in federal court, the Department of Justice (DOJ) has opened its own investigation into real estate agent fees. In the investigation, the DOJ has demanded information from CoreLogic, a system that provides many real estate agents with platforms where they can share listings, known as multiple listing services. While the information in regards to whether or not multiple listing services prevent competition in the real estate agent fee structure has yet to be determined, it’s clear there is a long road ahead for the NAR.

Houston Commercial Litigation Attorneys

When a dispute arises, it can bring your entire business to a screeching halt. When this happens, your livelihood is in serious jeopardy. Business litigation is often very complex, making quick resolutions unlikely. For the dedicated commercial litigation lawyers at Feldman & Feldman, there is no adversary too big. We work closely with our clients to get them the best results. If you are facing any type of business dispute or commercial litigation, call Feldman & Feldman today to schedule a consultation to discuss your case.

Former TABC Employee Claims She Was Fired For Whistleblowing

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Wrongful termination claims, though fairly common, can sometimes be complex when it comes to determining their validity. This is because each situation is unique and often requires an experienced eye to see the varying details of the claims being disputed. This was the case for a former Texas Alcoholic Beverage Commission (TABC) employee who filed a wrongful termination claim over a conflict of interest with her employer over whistleblowing claims.

Amy Harrison was let go from her position as director of licensing for the TABC after the media reported on out-of-state trips to conferences where officials partied and mingled with beverage industry representatives. Harrison wasn’t the only one who lost her job either – roughly half a dozen other agency executives were also let go during this time.

In a recent lawsuit, Harrison alleges she was pushed out of her position only after alerting TABC lawyers that former Army captain, Kevin Lilly, had personal stock holdings in companies the agency regulated. Soon after her concerns were raised, Harrison was told the agency was going in a “new direction” and was asked to resign. Being an employee since the early 1990’s, Harrison initially declined, but was soon forced out in retaliation for going outside the agency’s chain of command.

According to the lawsuit, Lilly alleges he had initially contacted Harrison to ask about potential conflicts he might have in his new role due to his personal stock holdings. After Harrison told him she was not the right person to determine this, Lilly still made the decision to send her and the agency’s general counsel a list of companies within his portfolio.

Harrison forwarded her concerns to the agency’s counsel, including the executive director at the time, Ed Swedberg, who also found potential conflicts. Soon after, Harrison alleges she was pressured to leave.

What Qualifies as Wrongful Termination?

Though many individuals terminated from their jobs might feel their termination was “wrongful,” especially if it was done without cause, the legal definition of wrongful termination is quite specific. In order to be wrongfully terminated, one must be fired for an illegal reason, which may involve a violation of federal anti-discrimination laws or a contractual breach. Under federal law, employers cannot fire an employee based on protected characteristics such as race, national origin, sex, pregnancy, religion, age, disability, and citizenship status.

In Texas, employment is “at-will,” meaning an employer can terminate an employee for any reason, no matter how arbitrary or irrational. Termination could occur at any time and for any legitimate purpose, making proving wrongful termination claims fairly difficult.

Houston Employment Law Attorneys

Employment disputes can have devastating effects on an organization’s reputation. Whether you are interested in preventing disputes or are currently faced with an employment law issue, the experienced employment attorneys at Feldman & Feldman can help. Contact us today to schedule a consultation to discuss your claim.

Texas Appeals Court Finds Copyright Infringement By Government Does Not Constitute a Taking

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Nearly everyone understands the concept of copyright. Individuals can obtain copyright protection for books, songs, computer software, and photos, among many other things. Once a copyright is obtained, the holder can seek compensation from individuals that unlawfully use the copyrighted work. This fairly straightforward legal concept was turned on its head recently when a photographer filed a lawsuit against The University of Houston System (a government entity) not for infringing upon his copyright, but alleging the university’s use of his photograph constituted a violation of his Fourth Amendment rights.

A Texas appeals court recently heard a case filed by Jim Olive Photography against The University of Houston System after the university used one of his photographs in advertising materials for its CT Bauer School of Business in 2012. Because the university is a government entity, it is immune from lawsuits, including copyright infringement lawsuits under the Doctrine of Sovereign Immunity, which protects all government entities from most lawsuits.

As a workaround to government immunity, Jim Olive Photography argued the violation of his Fourth Amendment rights. The Fourth Amendment protects individuals from the unlawful seizure of property by the government without proper compensation. Jim Olive Photography argued that by using his photograph without his consent, the government (i.e. the university) took his property.

The Texas First Court of Appeals found “No Texas case appears to have addressed whether a copyright is property for purposes of the takings clause and whether copyright infringement by a state actor is a taking.” Because of this, the judges had to rely on federal cases to inform their decision. With guidance from similar federal lawsuits, the judges determined that using a copyrighted photo did not constitute a taking under the Fourth Amendment. In order for the claim to constitute a Fourth Amendment violation, the plaintiff would need to prove the government took the entire copyright interest. Because Jim Olive Photography was still able to use and license the photo itself, the government didn’t take all interests related to the photo. The court ruled the case was in fact a copyright infringement case, which the university is immune to.

Lawsuits With Government Entities

The takeaway from this lawsuit is that any legal action involving government entities will be incredibly complex. At Feldman & Feldman, our lawyers have extensive experience handling claims against governmental entities. We understand the nuances of this type of public interest litigation and can help you resolve these legal issues efficiently. Contact us today to schedule an appointment with one of our government litigation lawyers.

SEC Wants Clearer Guidelines After Elon Musk’s Tweets

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Elon Musk is known for many things, including founding Paypal and serving as the CEO of Tesla Motors. In addition to making cars, building spaceships, and investing in a wide variety of technology start ups, Musk is also known for his prolific tweeting. Unfortunately, not everyone likes Musk’s use of the social media platform Twitter, and his tweets have not only created controversy, but they have also led to legal troubles with the U.S. Securities and Exchange Commission (SEC). Now, the SEC wants clearer guidelines how social media usage can violate federal law and lead to commercial litigation.

Musk’s trouble with the SEC goes back to August 2018 when the CEO tweeted he was going to take Tesla private. This caused Tesla’s stock price to skyrocket, as eager investors wanted to purchase stock before the buyback; however, the SEC found Musk’s statement “lacked an adequate basis in fact” and filed a lawsuit against him for violating federal securities law. Just months later, Musk got in trouble again when tweeting about the company’s commitment to produce a certain number of cars in 2019.

Determining whether or not an individual’s social media use has violated securities laws is often not black and white. Current regulations don’t mention social media use, which has prompted the SEC Commissioners to ask for new guidelines. SEC Commissioner Robert Jackson said, “Without prejudging a particular matter, it might be time for us to come forward and say, here are some principles of this game.”

Nearly everyone uses some type of social media platform and company executives are no exception. While executives may want to share company information on social media, they still have a responsibility to investors and shareholders. Executives are allowed to share information on social media, but investors must be informed on what social media channel will be used to push out market sensitive information.

Even though the SEC has yet to adopt specific guidelines for social media use, the agency is committed to pursuing securities violations, which include violations that occur on social media. And, it’s important to note, social media usage can be a huge source of liability for a business well beyond securities violations.

Houston Commercial Litigation Attorneys

If you are facing any type of litigation arising from your social media use or want to pursue a claim against another party for their use of social media, do not wait to contact Feldman & Feldman. We can review your case and explain your legal options.

Refusal To Settle Case Out Of Court Costs HISD $9 Million

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Experienced business litigation lawyers know there is no one-size-fits-all solution to legal matters. Success and winning should be defined by the unique circumstances of each case. Sometimes the most successful resolution to a case is not a long and drawn out court battle, but a careful negotiation and settlement. This is a lesson the Houston Independent School District (HISD) just learned the hard way in a recent lawsuit. Although HISD had the option to settle a copyright infringement lawsuit for just $250,000 out of court, the district decided to pursue the case in court where a jury ordered it to pay a whopping $9 million.

The lawsuit started when DynaStudy, a two-person educational materials supplier, alleged HISD made four violations of federal copyright laws. DynaStudy proposed a modest six-figure settlement on multiple locations, but HISD refused. DynaStudy reportedly proposed a $250,000 settlement, which the district rejected, leading the supplier to file a lawsuit.

During the discovery process, DynaStudy found dozens of other brazen copyright violations. Evidence showed some teachers used white tape and sticky notes to cover copyright notices and one teacher even wrote in an email that she was “OK with violating” copyrights.

After refusing several settlement offers, HISD launched a three-year legal battle that culminated in a $9.2 verdict against the district. Additionally, HISD may be on the hook for DynaStudy’s attorneys’ fees, which could amount to an additional $1.5 million. The jury decided in DynaStudy’s favor after hearing how dozens of HISD employees repeatedly violated copyrights and distributed copyrighted material for ten years.

Securing A Successful Resolution with the Help of Business Litigation Attorneys

The reality is most business litigation cases are not decided in a courtroom. This doesn’t mean trials are always a bad strategy for resolution, but it highlights the importance of understanding what a successful resolution looks like for each client. Oftentimes, out of court settlements are the quickest and most cost-effective way to resolve a dispute. Taking a case to trial can also present serious risks, as seen in the HISD copyright lawsuit.

Business Litigation Attorneys

At Feldman & Feldman, our business litigation attorneys put our clients’ interests first. We can explain your legal options and the benefits and drawbacks of each option. Our attorneys will help you make an informed decision about resolution strategies and continuously fight for what’s right for you. Contact us today to schedule an appointment with one of our experienced attorneys.

Pastor Charged With Clergy Abuse Appears In Court

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We trust our religious leaders to help guide us in our faith. Most of them do, but there are some pastors and priests that violate this trust and sexually abuse parishioners. For victims, coming forward about the abuse is incredibly difficult, which means justice is almost never obtained. Justice will be served, however, for one victim after a pastor confessed to sexually abusing a minor.

Stephen Bratton worked as a pastor at Grace Family Baptist Church for over ten years. On May 16, 2019, Bratton confessed to other pastors that he sexually abused a girl from 2013 until 2018, when she turned 18 years old. The Harris County Sheriff’s Office arrested Bratton after the report, and he was excommunicated from the church immediately after confessing to committing abuse. In his first court appearance after his arrest, his bond conditions were set and he was prohibited from going anywhere children will be present, like parks and schools. If convicted, Bratton could serve 25 years to life in prison.

Victims Deserve Justice

It has taken many years for society to take reports of clergy abuse seriously. The state of Texas is fighting clergy abuse with the arrest of a Houston area pastor and a search of The Catholic Diocese of Dallas. It’s commendable Texans can turn to law enforcement to help stop clergy abuse, but criminal proceedings often fall short of giving a victim justice and of taking care of their ongoing physical and emotional needs. Clergy abuse victims can file civil lawsuits against their abusers and the churches that employ them. By pursuing a civil lawsuit, victims can obtain compensation to help pay for therapy and mental health treatment.

At Feldman & Feldman, we’ve represented clergy abuse victims, helping them to get their voices heard. Churches have a responsibility to keep parishioners safe, and when they don’t our Texas clergy abuse attorneys hold them accountable. If you or someone you love suffered clergy abuse, do not wait to call us. We offer free and absolutely confidential consultations. We will listen to your story and let you know what your rights and options are. There is no pressure to work with us, but if you do, we charge no upfront cost and you won’t owe us anything unless we help you obtain compensation. Call us today to talk to an attorney.

How To Avoid A Business Divorce

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Many people compare business partnerships to domestic ones, and it’s easy to see why. Just like marriage, a business takes a lot of dedication and hard work; and, breaking up can be hugely expensive. Business divorces can destroy a business and any assets you have spent years building. While business divorces are sometimes necessary and the best course of action, every effort should be made to avoid these costly breakups.

Start With A Solid Foundation

Businesses are built on relationships and more than just the relationship between partners. Businesses will have relationships with other individuals, companies, and vendors in order to operate. Every relationship (including partnerships) needs to be clearly and specifically defined in a well written and thorough contract. Contracts between business partners need to clearly define each person’s duties, roles, investments in the business, compensation, and expectations. When these are not clearly defined, partners can easily find themselves in complex disputes.

Contracts with other internal and external individuals and companies are also a common source of conflicts that lead to business disputes. Your relationships with employees, vendors, contractors, etc. will function best with specific contracts outlining the roles and duties. This ensures partners are on the same page about the relationships necessary for the business.

Don’t Hesitate To Talk To An Attorney

Most business owners make every effort to avoid an attorney’s office, but this is a mistake. Talking with an experienced business law attorney does not mean you are filing a lawsuit. Attorneys can also act as counselors to business partners, helping them understand the contractual obligations currently in place and advising them on the best path forward for the business, which does not have to include litigation. An experienced business lawyer will put the business’ interests first and provide legal strategies that preserve the business you’ve worked hard to build.

Houston Business Lawyers

At Feldman & Feldman, our Houston business lawyers understand litigation is not always the answer. If you’re looking for honest legal advice that will help your business grow and avoid business divorce, schedule an appointment with one of dedicated attorneys. We’ve helped scores of business partners resolve disputes that could have destroyed their businesses. You can rest assured we will help you protect your business.

Phony Invoices Led To $4 Million Breach of Fiduciary Duty

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Companies often utilize contractors to help complete jobs and fill gaps in their workforce. While this creates a mutually beneficial relationship, some individuals will abuse it. This was the case for an investment company that discovered one of its contractors was creating phony invoices totaling $4 million.

Forest Investment Associates filed a lawsuit against a couple the company alleges defrauded them by creating phony invoices. The couple worked at Kingwood Forestry Services, which was frequently retained by Forest Investments. The wife worked as an administrator and her husband worked as a contractor. The couple would submit invoices for work that was never performed, which would in turn be paid by Forest Investments and its clients. Because the wife worked in administration, she kept an eye on all of the false invoices and made sure the amounts were not too suspicious so as to raise eyebrows. The scheme, which began in 2011, totaled $4 million worth of false invoices. Forest Investments has filed a lawsuit against the company for breach of fiduciary duty.

Protecting Your Business

No business exists in a vacuum. Businesses rely on other companies and individuals to operate. These relationships need to be carefully and thoroughly defined by contracts to help prevent disputes. When a dispute or outright fraud does arise, business owners have the right to seek compensation for economic damages. While many types of fraud bring about criminal charges, the criminal prosecution will not provide any financial compensation for wrongdoing to the victims.

Businesses that are victims of fraud can seek compensation directly related to the fraud and can pursue damages for harm done to their reputation. Because these matters can be extremely complicated, it’s important that only experienced business fraud attorneys handle them.

Texas Business Fraud Attorneys

At Feldman & Feldman, our Texas business fraud attorneys fight aggressively for our clients. We understand how business fraud can impact your company, so we work to get your legal issues resolved quickly. To learn more about your legal options, contact us today to schedule an appointment with one our lawyers.