Oliver Luck Goes on Offense Against Vince McMahon and the XFL in Wrongful Termination Suit
Photo Source: All-Pro Reels, XFL Defenders Home Opener. All-Pro Reels Shot for Washington Times, Flickr (Feb. 8, 2020) (CC BY-SA 2.0).
By: Santino Pelusi* Posted: 11/24/2021
The Setup
In June of 2018, professional football league XFL announced Oliver Luck as the rebooted league’s CEO and Commissioner.[1] The XFL hired Luck as a means of providing “legitimacy” to the league, which would assist the league in outperforming its prior launch in 2001.[2] People generally considered Luck to be one of the most qualified individuals to head the XFL due to his success in managing other sports leagues and groups, including NFL Europe.[3] Vince McMahon, the league’s founder and chairman, initially put his faith in Luck to head the league and stated he would refrain from having a significant role in the league’s regular operations.[4] Despite a historical precedent that cut against the XFL succeeding, the XFL showed signs of brightness in its debut season in the Spring of 2020 and proved to put an entertaining product on the field.[5]
However, despite the XFL’s initial bearing of the odds, the league, like many other sports leagues and businesses throughout the world, was not immune to the effects of COVID-19.[6] Unlike other sports leagues, however, the newly founded XFL did not have billions of dollars saved and TV broadcasting deals that it could rely on to survive the pandemic.[7] Ultimately, after only playing half of its expected season, the XFL canceled the remainder of its season and announced that it was not returning in 2021.[8] Soon after, the XFL began the process of tying up loose ends, told those responsible for facilitating a timely restart to stop, and fired most of its staff.[9] Oliver Luck was among those who lost their jobs.[10]
Luck Fires Back
Oliver Luck’s contract with the XFL stipulated that he would be paid $5 million per year and was entitled to receive this compensation, unless he was fired “with cause.”[11] The XFL invoked the “with cause” provision while firing Luck, therefore precluding him from receiving over $23 million to which he would otherwise be entitled.[12] Luck subsequently sued Alpha and McMahon for wrongful termination in the United States District Court of Connecticut, alleging that he was “illegally fired with cause.”[13]
With Cause Penalty
Because contract law claims are state law claims, and thus the only basis for subject matter jurisdiction for the federal court to hear the case is diversity jurisdiction, the district court must apply Connecticut state law.[14] When an employee cannot be fired, or must receive contractually guaranteed money when fired unless cause exists, the employer must show the cause.[15] Employment contracts typically “define what constitutes ‘cause.’”[16] Legitimate reasons for meeting the “with cause” provision may be “incompetence, insubordination, misconduct, or other ‘due and sufficient cause.’”[17] Another deeply rooted principle of contract law is the duty of good faith in abiding by the terms of the contract.[18]
The Alleged Foul on the Play
The XFL employed an attorney to investigate whether Luck breached his contract and the “with cause” provision was applicable to Luck’s termination.[19] Luck contends that the XFL is in possession of emails that prove that he was fired with cause in bad faith.[20] Specifically, Luck charges the XFL with communicating via email to coordinate his firing “with cause” prior to contacting an attorney to conduct an investigation, and thus that the attorney’s investigation and conclusion were obtained in bad faith.[21] The XFL has responded by refusing to give up any of its emails regarding Luck’s termination, claiming that they were communicated to its investigating attorney and thus protected under attorney-client privilege.[22] Attorney-client privilege in Connecticut shields the confidential legal advice given to clients by attorneys, as well as the confidential information disclosed to the attorney by the clients.[23]
Luck and his legal team have filed pretrial discovery motions with the court to compel the XFL to provide over 250 emails to them to use as evidence of Luck’s alleged illegal firing with cause.[24] McMahon and Alpha’s legal team has filed a response with the court that alleges Luck to have “mishandled character checks” of prospective players.[25] The XFL maintains that only McMahon had the authority to approve of players with prior criminal records or “troubled” pasts to play in the XFL, and that Luck unilaterally decided to allow certain players to enter the league.[26] Additionally, McMahon and Alpha filed counterclaims asserting that Luck should be liable for the worker’s compensation that was paid to players who injured themselves while playing and whom Luck allegedly permitted to play in the league without McMahon’s approval.[27]
The Fourth Quarter
After a dozen or so pretrial motions, Judge Victor A. Bolden has limited the scope of the trial by dismissing Luck’s claim against McMahon but has set a trial date for Luck’s claim against Alpha.[28] Judge Bolden has mostly decided in favor of the XFL regarding compelled discovery of its emails regarding Luck’s termination.[29] However, as trial nears, Judge Bolden will make a decision as to the bad faith of Luck’s “with cause” termination, and thus whether Oliver Luck is entitled to a $23.8 million payout.[30]
*Staff Writer Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2023, Villanova University Charles Widger School of Law
[1] See Zak Keefer, XFL Banks on Oliver Luck Bringing Credibility to Rebooted League, IndyStar (June 6, 2018), https://www.indystar.com/story/sports/2018/06/05/oliver-luck-leaves-ncaa-become-xfl-commissioner/672383002/ (noting XFL landed Oliver Luck to head its new launch).
[2] See id. (discussing Alpha’s (XFL’s former parent company), Vince McMahon’s intentions in hiring Oliver Luck as newly formed league’s CEO and commissioner). The XFL first formed as a professional football league in 2001 but ultimately closed down operations after just one season. See id. (“The league . . . fold[ed] after just one season in 2001.”).
[3] See id. (describing Oliver Luck’s prior successes as president of NFL Europe, CEO of Houston Sports Authority, president of Major Soccer League’s (“MSL”) Houston Dynamo, and vice president of regulatory affairs at National Collegiate Athletic Association (“NCAA”)).
[4] See Richard Johnson, XFL Hires Former West Virginia and NCAA Admin Oliver Luck to Lend Legitimacy to the League’s New Iteration, SBNation (June 5, 2018), https://www.sbnation.com/college-football/2018/6/5/17429326/xfl-new-ceo-andrew-oliver-luck-ncaa-football (“McMahon said he wouldn’t be too involved in the day-to-day like he was during the XFL’s first go around.”)
[5] See Kevin Seifert, What Have We Learned About the XFL? Six Midseason Takeaways, ESPN (Mar. 9, 2020) https://www.espn.com/xfl/story/_/id/28866564/what-learned-xfl-six-midseason-takeaways (noting XFL averaged over 3.1 million viewers in its week one games, followed by over one million viewers per game through week four of season).
[6] See id. (reporting that XFL suspended all operations in wake of COVID-19 until its parent company Alpha ultimately filed for Chapter 11 Bankruptcy).
[7] See id. (comparing XFL to other professional sports leagues that have profitably operated for decades, such as NFL, NBA, MLB, which could withstand financial shortcomings, challenges posed by pandemic).
[8] See Rodger Sherman, Farewell to the XFL, the League that Was Better than Expected, Ringer (Apr. 10, 2020), https://www.theringer.com/nfl/2020/4/10/21216992/xfl-suspend-operations-canceled-season (reporting XFL had “essentially boarded up shop” given XFL staffer’s statement that XFL “is not coming back” for 2021 season).
[9] See id. (describing XFL’s response to pandemic, plus implications for XFL staffers).
[10] For a discussion and explanation of Luck’s termination and the ongoing litigation surrounding it, see infra notes 19-30 and accompanying text.
[11] See Michael McCann, Oliver Luck’s XFL Suit Hinges on Line Between, Legal, Business Advice, Sportico (April 22, 2021), https://www.yahoo.com/now/oliver-luck-xfl-suit-hinges-150002785.html?guccounter=1 (explaining contents of Luck’s contract with XFL).
[12] See id. (reporting that Vince McMahon, Alpha terminated Luck “with cause,” which prevented Luck from receiving remainder of $25 million contract he signed with XFL).
[13] See id. (explaining basis for Luck’s lawsuit against Alpha, McMahon).
[14] See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (holding that absent any constitutional or federal questions, law in which federal court resides is applied).
[15] See Ashley Harrison, Navigating an Employee’s Dismissal, 23 No. 3 Conn. Emp. L. Letter 2, (March 2015) (articulating that basis for which employee can be terminated or employer can refuse to give employee money which employee contracted for is cause).
[16] See id. (stating courts usually look to language of contract to determine definition for “with cause”).
[17] See id. (articulating usual justifications for meeting “with cause” provision).
[18] See Robert C. Bird & Darren Charters, Good Faith and Wrongful Termination in Canada and the United States: A Comparative and Relational Inquiry, 41 Am. Bus. L.J. 205 (2004) (quoting Article I of Uniform Commercial Code, which states, “[e]very contract or duty within this Act imposes an obligation of good faith in its performance or enforcement.”)
[19] See McCann, supra note 11 (recounting facts of case).
[20] See id. (stating reasoning behind Luck’s claim).
[21] See id. (explaining why Luck believes termination was wrongful, why “with cause” provision was not properly met).
[22] See id. (describing XFL’s justification for refusing to provide any of its communications regarding Luck’s termination).
[23] See Metro. Life Ins. Co. v. Aetna Cas. & Sur. Co., 730 A.2d 51, 60 (Conn. 1999) (“[T]he attorney-client privilege protects both the confidential giving of professional advice by an attorney acting in the capacity of a legal advisor to those who can act on it, as well as the giving of information to the lawyer to enable counsel to give sound and informed advice.”).
[24] See Stephan Rachuck, Vince McMahon’s Lawyers Claim Oliver Luck Mishandled Character Checks, XFL Newsroom (Mar. 27, 2021), https://xflnewsroom.com/news/vince-mcmahons-lawyers-claim-oliver-luck-mishandled-character-checks/ (reporting current procedural posture of the lawsuit).
[25] See id. (explaining XFL’s claimed basis for firing Luck with cause).
[26] See id. (reporting XFL asserts Luck was insubordinate with respect to player acquisition, that Luck exercised power that was exclusively vested to McMahon—Luck’s boss).
[27] See Chris Bumbaca, Subordination Accusations, Johnny Manziel, and More; Vince McMahon Countersues Oliver Luck, USA Today (Jan. 8, 2021, 1:02 PM), https://www.usatoday.com/story/sports/xfl/2021/01/08/xfl-vince-mcmahon-oliver-luck-lawsuit/6596121002/ (explaining McMahon filed counterclaim against Luck for over $500,000 for certain injured players’ workers’ compensation).
[28] See Michael McCann, Oliver Luck’s $24 Million XFL Lawsuit Advances Toward 2022 Trial, Sportico (Sept. 22, 2021, 12:01 AM), https://www.sportico.com/law/analysis/2021/oliver-lucks-xfl-lawsuit-1234640384/ (describing current state of case, in addition to Judge Bolden’s rulings on numerous pretrial motions).
[29] See id. (stating Judge Bolden has been reluctant to breach protections of attorney-client privilege).
[30] See id. (explaining what is to come, what will be decided at trial, while noting high monetary stakes are at play).
