Players, Owners, and Contracts in the Nfl: Why the Self-help Specific Performance Remedy Cannot Escape the Clean Hands Doctrine

• Publication year: 1998

SEATTLE UNIVERSITY LAW REVIEWVolume 22, No. 3WINTER 1999

Players, Owners, and Contracts in the NFL: Why the Self-Help Specific Performance Remedy Cannot Escape the Clean Hands Doctrine

Stephen C. Wichmann(fn*)

Introduction

Jim Blutarski was an All-American defensive end for three years at Faber College.(fn1) After his third year in college, Jim decided to forego his senior season and make himself eligible for the National Football League's college draft. Jim was chosen as the tenth pick in the first round of the draft by the New Orleans Saints and eventually signed a four year contract worth a total of $5.5 million.

After three successful years starting at defensive end for the Saints, including two invitations to the Pro Bowl,(fn2) Blutarski notified the Saints that unless they agreed to renegotiate his contract, he planned to hold out from playing in the upcoming football season. The Saints at this point had several options. If the Saints liked Blutarski's performance, they could negotiate with him and provide Blutarski with a raise, since the risk of losing his unique services for the year greatly outweighed the raise he was demanding. The Saints could also trade Blutarski to another team willing to deal with him for adequate compensation. If worse came to worst and the club found that it could not agree on new terms with Blutarski, and that it was no longer feasible to keep his services, the club would have to release Blutarski from his contract.

Is it fair that professional football players possess so much control in renegotiating contracts? Do the players in fact possess the control that we perceive them to have? Often, players do have most of the bargaining power, as in the case of college players being chosen in the draft. Once a team has chosen to pursue a draftee out of college, no other team has the right to interfere with that process.(fn3) If that club fails to sign the player, the club wastes a valuable pick, and there is no remedy for such a failure.(fn4) But after that introduction into the league, who retains control? It appears that the player still retains control because, although the player is under contract, he can withhold playing for the club until it accedes to his new demands.(fn5)

There is, however, a theoretical method by which the club can even the playing field-self-help specific performance.(fn6) The self-help specific performance remedy was originally created by Professor Subha Narasimhan in response to her belief that there are certain situations in contract law where the damage remedy is inadequate and traditional specific performance is denied by the courts for reasons of inadequacies in judicial administration.(fn7) Professor Alex Johnson, Jr. later adapted the self-help specific performance remedy to the world of professional sports contracts because he believed the National Football League was an ideal arena for the remedy, satisfying all prerequisites enumerated by Professor Narasimhan.(fn8) According to Professor Johnson, this remedy calls for the club initially to accept a "superstar" player's demands for more money and a contract extension so that the club obtains actual performance on the contract that the player threatened to breach.(fn9) Then, after the player has performed fully under the new contract, the club sues the player for any money the player received in excess of the sum agreed on in the original contract, for the time period covered by the original contract.(fn10) Such a suit would be based on a theory such as economic duress or the preexisting duty rule.

Although those with promanagement sentiment might agree that this option should be available to the club,(fn11) the remedy will not be accepted by the courts(fn12) because the clean hands doctrine poses a major roadblock to the legal implementation of the self-help specific performance remedy.(fn13) Since the club acted inequitably towards the player in signing a contract it had no intention of performing, the player can invoke the clean hands doctrine as a defense, and the club will be disqualified from taking advantage of the judicial system to recover the difference between the contracts' terms.(fn14)

Before analyzing the problems that the self-help specific performance remedy faces, this Comment begins in Section I by describing the self-help specific performance remedy as applied to professional athletes. Section II then explains the clean hands doctrine and the rationales behind it. Section III continues by explaining why the self-help specific performance remedy should not be exempt from the defense of the clean hands doctrine. Section IV then concludes that the clean hands doctrine is a proper defense and will defeat any attempt to implement the self-help specific performance remedy.

I. The Self-Help Specific Performance Remedy

The self-help specific performance remedy proposes that if an NFL player holds out, demanding renegotiation of his contract, the club should agree to the player's new demands and then contest the modification on the grounds of economic duress or the preexisting duty rule after the player has performed his duties fully under the new contract. The club is thus seeking recovery for any salary it paid in excess of what the player was entitled to under the original contract.(fn15) This remedy requires that the club's suit for rescission of the renegotiated contract not begin until after the player has already delivered full performance under that contract.(fn16) To do otherwise would eliminate the possibility of the club benefiting from the player's ability during the remainder of the contract.

However, before employing the self-help specific performance remedy, the club must first address its theory of recovery in court.

A. Theories of Recovery

The preexisting duty rule, under the law of contract modification, offers one theory of recovery for the club.(fn17) Specifically, the club would claim that it received no new consideration from the player for the contract modification because the player merely agreed to provide a service already called for under the original contract. The rule states that the performance of a preexisting duty does not constitute sufficient consideration to support a contract modification.(fn18)

Although the Restatement (Second) of Contracts adopts such a rule, later sections of the treatise dilute much of its impact. If the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made, then the modification will be enforceable.(fn19) However, a professional football player can hardly claim that his level of performance under the original contract increased by such a degree that it constituted an unanticipated circumstance, not foreseen at the time of creation of the original contract. In most football contracts, the player agrees to perform to the best of his ability. Therefore, any increased ability by the player was expected by the club and cannot constitute an unanticipated change.(fn20)

In deciding whether to introduce the "unanticipated circumstances" exception, a player should think hard before opening Pandora's box. By claiming unanticipated circumstances, the player opens the door for owners to invoke the same concept. For example, in a situation in which player salaries experience a downward trend, or a competing league folds (thereby reducing the competition for obtaining good players), club owners could claim unanticipated circumstances that may justify modifying player contracts and reducing salaries.(fn21)

This Comment assumes that both Blutarski and the club knew of Blutarski's full potential and ability to perform, such that any increase in Blutarski's on-field performance would not surprise the club and require greater consideration than that originally bargained for in the original contract. The club anticipated Blutarski would develop into a great football player. Given the fact that the club selected Blutarski early in the draft and provided him with a lucrative contract, there is no reason to believe the club was surprised by an improvement in Blutarski's skills. Therefore, the club has not received any valuable consideration or services from Blutarski not already considered during the creation of the original contract. Barring the application of equitable doctrines,(fn22) most contract modifications not supported by new consideration, and modified contract terms exceeding the time period covered in the original contract,(fn23) will probably be found void-as should Blutarski's modified contract.

The second theory of recovery a club may claim in attempting self-help specific performance is "economic duress."(fn24) Under this theory, the club sues the player for damages because his new contract was signed by the club under economic duress. In order to succeed, the club needs to show an improper threat, a lack of a reasonable alternative, and the inadequacy of ordinary remedies for breach.(fn25)

A player who threatens not to perform a duty that he already promised to perform, unless paid more money, seems to have made an improper threat. The only potential problem is that a player probably would not threaten not to perform, but rather threaten to play below the skill level the club expects from him.(fn26) This, however, does not create a problem because a threat need not be express, but "may be...