The No-Compete Clause

[The Chief]

I was watching a shoot with Big Daddy V and he mentioned that Luger walking out in 1995 was basically the start of the No Compete-Clause as a standard procedure. I got to thinking, with no competition today, is the clause still needed? What purpose does it serve in today's business model?

[fakeplastictrees]

WWE's reaction to Lesnar leaving the first time tells me that they want to keep their top guys from joining The NFL, UFC, and anything else that WWE feels is in direct competition with their brand. Also, you never know what the future of pro wrestling holds. The AAA North American expansion may go extremely well. No compete clause would suck for WWE. It will also prevent WWE from planting stories about former employees (Victoria as Benoit's mistree, Jeff Hardy's drug bust, Mike Knox having tons of substances in his attic), etc.

[Steenalized]

Does anyone know what the standard non-compete that they put in their contracts is? I'm wondering if they're even enforceable to the extent they appear on their face.

[Moonsault Marvin]

From Stephanie McMahon's contract:

 

 

b. Upon expiration or termination of this Agreement by PROMOTER pursuant to Section 12.1, WRESTLER shall not work, appear, or perform in any capacity for any professional wrestling, sports entertainment, mixed martial arts and/or ultimate fighting organization, promotion or entity not owned or controlled by PROMOTER (or any affiliated or subsidiary company thereof) in the United States for a period of up to one (1) year from the date of such expiration or termination, as specified by PROMOTER in the notice of termination; provided, however, that if no lesser period is specified by PROMOTER in the notice of termination, such period shall be one (1) year.

[Moonsault Marvin]

In HHH's version of the contract, his contract doesn't mention "expiration," only one year no compete if he breaches, so I don't know if what I posted is similar to what regular wrestlers sign or not.

[MikeCampbell]

How would Lex's jump to WCW apply in this case though. He wasn't under contract.

[Mini Bennett]

Do guys under developmental contracts have the same clause in their contracts?

[Steenalized]

 

From Stephanie McMahon's contract:

 

 

b. Upon expiration or termination of this Agreement by PROMOTER pursuant to Section 12.1, WRESTLER shall not work, appear, or perform in any capacity for any professional wrestling, sports entertainment, mixed martial arts and/or ultimate fighting organization, promotion or entity not owned or controlled by PROMOTER (or any affiliated or subsidiary company thereof) in the United States for a period of up to one (1) year from the date of such expiration or termination, as specified by PROMOTER in the notice of termination; provided, however, that if no lesser period is specified by PROMOTER in the notice of termination, such period shall be one (1) year.

 

So one year, no geographical limitation, and it's whether terminated or the deal just ends.

[Dooley]

And Lesnar's no compete was deemed to be wholly unenforeceable.

[Steenalized]

I imagine the one from Steph's would be too if she fought it. The problem is, I don't think most guys would have the resources to take it to trial. Brock was an exception. Looking through Lesnar's contract (on indeedwrestling.com, mookieghana's site), he does not have the same clause. 9.15 mentions performing for other promotions, but only for the duration of the contract. Clause 12.3 is probably the closest equivalent:

 

 

12.3 The parties further agree that because of the special, unique, and extraordinary nature of the obligations of the PROMOTER and WRESTLER respecting all rights and licenses concerning bookings, promoting, Programs, Events, Intellectual Property, which are the subject matter of this Agreement, WRESTLER's breach of this Agreement shall cause PROMOTER irreparable injury which cannot be adequately measured by monetary relief; as a consequence PROMOTER shall be entitled to injunctive and other equitable relief against WRESTLER to prevent WRESTLER's breach or default hereunder and such injunction or equitable relief shall be without prejudice to any other rights, remedies, or damages which PROMOTER is legally entitled to obtain.

 

Still no geographic limitation, no temporal limitation, though only covering breach.

[The Chief]

How would Lex's jump to WCW apply in this case though. He wasn't under contract.

you're right, I think what he meant is "we need to keep tighter strings on these guys to prevent something like this from happening"

[mookeighana]

I imagine the one from Steph's would be too if she fought it. The problem is, I don't think most guys would have the resources to take it to trial. Brock was an exception. Looking through Lesnar's contract (on indeedwrestling.com, mookieghana's site), he does not have the same clause. 9.15 mentions performing for other promotions, but only for the duration of the contract. Clause 12.3 is probably the closest equivalent:

 

12.3 The parties further agree that because of the special, unique, and extraordinary nature of the obligations of the PROMOTER and WRESTLER respecting all rights and licenses concerning bookings, promoting, Programs, Events, Intellectual Property, which are the subject matter of this Agreement, WRESTLER's breach of this Agreement shall cause PROMOTER irreparable injury which cannot be adequately measured by monetary relief; as a consequence PROMOTER shall be entitled to injunctive and other equitable relief against WRESTLER to prevent WRESTLER's breach or default hereunder and such injunction or equitable relief shall be without prejudice to any other rights, remedies, or damages which PROMOTER is legally entitled to obtain.

Still no geographic limitation, no temporal limitation, though only covering breach.

 

(Thanks for the plug: https://sites.google.com/site/chrisharrington/mookieghana-prowrestlingstatistics/wwe_contracts )

 

Keep in mind that Lesnar's lawsuit against the US was all about the non-compete/geographic clauses. Basically, WWE was insisting that they had let Brock try out for Football, but he didn't have the rights to go to New Japan. The judge essentially found that you can't write a TEN-YEAR CAN'T COMPETE ANYWHERE IN THE WORLD clause like they did for Brock, so he ended up being free.

 

I've got Ultimate Warrior's 1987 contract up there, his just says:

 

Early Termination

 

11.1 This Agreement may be terminated prior to the end of its term by a written instrument executed by each of the parties expressing their mutual consent to so terminate without any further liability on the part of either. In the event of such early termination, WRESTLER and PROMOTER shall share in perpetuity revenues derivedfrom the use or the intellectual Property and/or Name and Likeness, all as provided in paragraphs 7.3, 7.4 and 7.5 above.

 

11.2 This Agreement will be terminated by WRESTLER's death during this term.

I scanned Warrior's 1996 contract and didn't see a non-compete term in there, but I might have missed it.

[Matt D]

Wasn't it the Russo jump that changed everything?

[NintendoLogic]

It should be noted that WWE continues to pay people for the duration of the no-compete, which is probably why it hardly ever gets challenged in court. Also, it's not really that restrictive in practice. Plenty of guys have started working the indies within days of being released by WWE. Pretty much the only place they're forbidden from working is TNA.

[Steenalized]

In practice, the WWE has been pretty lax of late about that and about guys using their WWE names elsewhere. Most guys don't care enough or, more likely, don't have the money to take a non-compete to court. The problem isn't going to come up if JTG ever gets let go. It's a guy like Brock who decides he wants to do something else and has made enough money/can make enough money to fight it.

[Matt D]

 

 

TERRY TAYLOR AND OTHERS LEAVING TOO?

- One of the bookers and now the one who writes TV for the World
Wrestling Federation, Terry Taylor will probably jump back to WCW any
day. Taylor refused to sign a no-compete contract which was presented to
him by Jim Ross earlier this week. Bob Ryder also says that Bob
Mitchell, who also worked on WWF.com and Matt Miller, who worked for the
talent relations department may also leave the World Wrestling
Federation and jump to WCW. Interesting to say is that Taylor only
joined the WWF back in the summer of 98.

 

This is what I was thinking of. They installed some sort of really severe no-compete after Russo left and people balked at it.

[jdw]

As someone above pointed to, a one year non-compete isn't going to be enforceable unless the wrestling is getting some consideration for that one year of not working. It would be laughed out of court.

 

That's not to say a shorter non-compete being specified wouldn't survive, with the WWE's argument being that a certain part of what the wrestler had been paid as a base over the course of the contract was with the understanding that the wrestling wouldn't work elsewhere for 30 days after the contract terminated. It's a small enough time that a wrestle is unlikely to fight it, unless the 30 days are critical to the jump. For example if a WWF contract expired on 11/30 and WCW was shoveling a ton of money to him with the specific intent to have him work at Starcade later in December, and to start working TV instantly at the start of December for the build. In which case... it's a game of chicken. WCW could simply tell the WWF to fuck off, force them to try to get a TRO, and eventually the WWF would have to show damages... all of the while running up a bill.

 

It's always been a dumb ass clause, though wrestling promotions and wrestlers alike are dumb asses when it comes to contracts.

[Steenalized]

In the WWF vs. WCW context, it makes some sense. Both companies are big, poaching each others talent, and are direct competitors. That dynamic is gone now. If Angle going to TNA didn't boost them all that much, who will? I guess Cena would to some extent, but not that much. No court is going to say WWE can stop guys from going to New Japan or probably even AAA/CMLL unless its a very short time frame.