eSports and Employment law

It’s an industry that generates over £1bn a year, globally and owes its success to the competitive gaming leagues and the teams of players that participate in them. While everyone’s heard of eSports, few know its inner workings, especially from an employment law perspective. Needless to say, the team/gamer relationship is more complex than it seems.

Employment Status

A common issue is determining whether a player is actually employed by the team or, in fact, is a self-employed contractor providing a service which can lead to plethora of legal issues.

There are three elements that suggest a player is an employee, namely, whether or not:

1. The team has control over the player during their working hours;
2. There is a mutuality of obligations; and
3. The player provides a personal service.

If these elements are not present, the player may be “self-employed” but the reality of the relationship must be assessed to be sure.

Typically, teams require their players to commit a certain number of hours per week to training and strategy meetings, promote and publish the team via their social media accounts. Moreover, players are appointed because they have a service only they can provide – their skill and knowledge of games supplemented by their level of celebrity. Couple this teams requiring players to  represent them exclusively and you could make out an employment relationship.

A recent US case of Turner Tenney  v FaZe Clan Inc opened a can of ‘legal’ worms when the team incorrectly labelled the Plaintiff as “self-employed” which led to disputes over unpaid wage, IP rights, and lost business opportunities. Note this case has no relevance to English law but it is useful to see what issues can arise.

Oppressive restrictive covenants

It’s understandable a team’s players are key to success and they learn the teams secrets and strategies when approaching a competition. Such information is vital so much so teams ought to place ongoing obligations on players who leave.

However, given the sensitive of the information teams tend to overcompensate and place long-term restrictions which unduly restrain a player’s ability to make a living. As mentioned, this industry is highly lucrative and stopping a player from competing could seriously damage their ability to earn a living.

Investment and Sponsorship

As mentioned, this is big business, even capital management firms and high-profile companies invest and sponsor these teams. However, the investor relationship adds a new dynamic. Because they fund teams they have a degree of influence to protect their investment such as deciding on team formation, which can lead to  wrongful or unfair dismissal cases as outlined above.

Rise of unionisation 

It’s a tale as old as time: young, inexperienced players are taken advantage of by unscrupulous team mangers and investors. However, there is a growing feeling that working conditions aren’t right and players are calling to unionise so that:

1. Players are informed of their rights;
2. Excessive/unpaid overtime ends;
3. Diversity and inclusion improves; and
4. Ensure a steady and fair wage.

SMB’s Employment and Technology teams are highly experienced in dealing with these issues and are more than happy to assist should you need our legal service.

Please contract joe.hennessy@smb.london for further information.