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Revenue-sharing liquidated damage clause is like non-compete clause. That's a UW problem.
Posted on 1/7/26 at 12:51 pm
Posted on 1/7/26 at 12:51 pm
A revenue-sharing liquidated damages clause functions like a non-compete agreement by deterring departure through financial penalties. It's technically different, however, as it compensates for lost revenue/IP use rather than restricting future employment directly.
The FTC views many of these clauses in NIL deals as potentially illegal non-competes, even proposing a ban on them. The clauses can easily be seen as de facto non-competes, especially with emerging player employment status.
If college athletes are deemed employees (a major ongoing legal question), these clauses could face even more scrutiny, as employees generally have stronger rights against restrictive covenants.
Similarly, the House Settlement revenue-sharing model involves schools paying athletes for NIL rights, and clauses requiring athletes to pay back funds if they transfer (claw-backs) are being tested as ways to deter portal movement.
In short, while not identical legally, revenue-sharing liquidated damages clauses in college sports often achieve a similar restrictive effect as non-competes; thus, they are being examined by regulatory agencies and courts.
The FTC views many of these clauses in NIL deals as potentially illegal non-competes, even proposing a ban on them. The clauses can easily be seen as de facto non-competes, especially with emerging player employment status.
If college athletes are deemed employees (a major ongoing legal question), these clauses could face even more scrutiny, as employees generally have stronger rights against restrictive covenants.
Similarly, the House Settlement revenue-sharing model involves schools paying athletes for NIL rights, and clauses requiring athletes to pay back funds if they transfer (claw-backs) are being tested as ways to deter portal movement.
In short, while not identical legally, revenue-sharing liquidated damages clauses in college sports often achieve a similar restrictive effect as non-competes; thus, they are being examined by regulatory agencies and courts.
This post was edited on 1/7/26 at 1:45 pm
Posted on 1/7/26 at 12:54 pm to Salviati
quote:
achieve a similar restrictive effect as non-competes
Ok, so we don't schedule UW the next couple of years.
Posted on 1/7/26 at 12:55 pm to DeafVallyBatnR
quote:
Right to work state.
Dead giveaway a person doesn't know what they're talking about when referring to non-competes.
Posted on 1/7/26 at 12:56 pm to Salviati
Did he he receive payment in full or partial, is he able to pay back monies acquired??
Posted on 1/7/26 at 12:58 pm to DeafVallyBatnR
quote:
Right to work state.
Has nothing to do with this.
Posted on 1/7/26 at 1:00 pm to DeafVallyBatnR
quote:
Right to work state.
Just means you dont have to be in a Union to get a job
Posted on 1/7/26 at 1:02 pm to boomtapp
quote:
quote:
Right to work state.
Dead giveaway a person doesn't know what they're talking about when referring to non-competes.
Yep , just pull out some political line you that you have gulped down chased by the kool aid
Posted on 1/7/26 at 1:02 pm to rsbd
quote:
Did he he receive payment in full or partial, is he able to pay back monies acquired??
Hasn’t been paid a dime off of it yet.
Posted on 1/7/26 at 1:04 pm to TigersJump
quote:
Hasn’t been paid a dime off of it yet.
I think this comes into play big time in this situation.
Posted on 1/7/26 at 1:04 pm to Salviati
Ok, so nobody really knows how to interpret or enforce these things, or whether they’re even legal. If there is money to be clawed back, pay it and move on. Disregard the intimidation tactics and go get that natty. That’s all people will remember in the end.
Posted on 1/7/26 at 1:05 pm to Salviati
There are a lot of limitations on enforcing a non compete agreement. Federal law has sided with employees right to work overwhelmingly. Number 3 is the one that sets him free. They are just trying to keep him working for them. Can't do it.
per gemini search
In states that allow noncompetes, courts typically won't enforce them unless they meet the following "three-prong" test:
Duration: Usually 6 months to 2 years. Anything longer is often seen as "punitive."
Geography: Must be limited to the area where the employer actually does business (e.g., a 10-mile radius vs. a "worldwide" ban).
Legitimate Business Interest: The company must prove they are protecting trade secrets or specific client relationships, not just trying to stop you from working for a competitor.
per gemini search
In states that allow noncompetes, courts typically won't enforce them unless they meet the following "three-prong" test:
Duration: Usually 6 months to 2 years. Anything longer is often seen as "punitive."
Geography: Must be limited to the area where the employer actually does business (e.g., a 10-mile radius vs. a "worldwide" ban).
Legitimate Business Interest: The company must prove they are protecting trade secrets or specific client relationships, not just trying to stop you from working for a competitor.
Posted on 1/7/26 at 1:06 pm to Salviati
Kind of surprised that poster with 800k posts that claims to be a lawyer hasn’t dropped in here to pontificate
Posted on 1/7/26 at 1:07 pm to boomtapp
Non competes are fairly difficult to win in a court. It's usually a judge that the employer knows.. a good lawyer can overcome this.. Miami has a starter now that UW sued if I'm not mistaken
Posted on 1/7/26 at 1:09 pm to rsbd
quote:I doubt he's been paid anything.
Did he he receive payment in full or partial, is he able to pay back monies acquired??
But I'm not worried about the claw-back clause as much as the stipulated damage clause.
Claw-back Clause: Pay back what Williams got for a contract he signed a few days ago. No big deal.
Stipulated Damages Clauses: Pay a little something, you know, for the anticipated loss. That's not reimbursement. Someone is coming out of pocket to pay Washington.
Posted on 1/7/26 at 1:14 pm to rsbd
quote:
Did he he receive payment in full or partial, is he able to pay back monies acquired??
Loading Twitter/X Embed...
If tweet fails to load, click here. If this is an excerpt from the actual contract, it looks like the agreement is that the player and/or transfer school would be responsible to pay liquidated damages of the prorated amount of the agreement. In this case, if no payment had yet been made, that would be the entire amount. If payment had been made, the player/transfer school would be on the hook to repay those monies. This is the clawback OP referred to. It would be up to the courts to determine if the liquidated damages could legally be enforced.
This post was edited on 1/7/26 at 1:48 pm
Posted on 1/7/26 at 1:16 pm to Salviati
Contracts can be -- and are --- broken for any reason. Period.
Once broken, the question is the harm caused as a result of the breach (aka, damages). LD provisions try to estimate those damages, which are inherently difficult to measure, particularly at the time of contracting. Most states focus on that temporal analysis (at the time of contracting, was it foreseeable damages could result of the breach, and is the LD amount set a reasonable estimate of those foreseeable damages).
Some limited states' laws allow courts to consider the actual damages at the time of the breach to determine if the LD amount was reasonable and, therefore, enforceable.
Turing to this case, the QB drops out of school, and registers with LSU and then plays there. LSU then pays (indirectly through the QB) any enforceable amount of LDs that is in the QB's contract.
Here, the QB plays for LSU. Force WASH to seek an injunction to prevent him from playing football. Good luck with that. And while not a labor attorney, I would find it very, very hard to imagine a court in any jurisdiction ruling that the QB's right to earn a living (particularly cross states - NDAs focus on locality as I recall, the further the distance, the less likely enforceable) would be restricted. Particularly if the court sees there is an enforceable LD provision, or actual damages right to recover if not, that would compensate WASH for any damages.
Really is not that difficult. He breaches, signs with LSU and let WASH chase him in the legal system. By the time it is resolved (if ever), he will be in the NFL.
Once broken, the question is the harm caused as a result of the breach (aka, damages). LD provisions try to estimate those damages, which are inherently difficult to measure, particularly at the time of contracting. Most states focus on that temporal analysis (at the time of contracting, was it foreseeable damages could result of the breach, and is the LD amount set a reasonable estimate of those foreseeable damages).
Some limited states' laws allow courts to consider the actual damages at the time of the breach to determine if the LD amount was reasonable and, therefore, enforceable.
Turing to this case, the QB drops out of school, and registers with LSU and then plays there. LSU then pays (indirectly through the QB) any enforceable amount of LDs that is in the QB's contract.
Here, the QB plays for LSU. Force WASH to seek an injunction to prevent him from playing football. Good luck with that. And while not a labor attorney, I would find it very, very hard to imagine a court in any jurisdiction ruling that the QB's right to earn a living (particularly cross states - NDAs focus on locality as I recall, the further the distance, the less likely enforceable) would be restricted. Particularly if the court sees there is an enforceable LD provision, or actual damages right to recover if not, that would compensate WASH for any damages.
Really is not that difficult. He breaches, signs with LSU and let WASH chase him in the legal system. By the time it is resolved (if ever), he will be in the NFL.
Posted on 1/7/26 at 1:17 pm to DeafVallyBatnR
quote:
Right to work state.
You wanting to bring unions into this?
Posted on 1/7/26 at 1:20 pm to GeauxldMember
quote:
If this is an excerpt from the actual contract, it looks like the agreement is that the player and/or transfer school would be responsible to pay liquidated damages of the prorated amount of the agreement. In this case, if no payment had yet been made, that would be the entire amount. This is the clawback OP referred to, and it would be up to the courts to determine if this could be enforced.
Gotcha. So same situation as the Mizzou player who UGA is suing (he's in the portal again).
Play the player, let the courts settle the contract dispute. The impression I got from the Damon Wilson case is that if a judge decides that the full payback amount is punitive and not damages then the previous school is out of luck.
According to the trusty Google AI:
Key Aspects of Liquidated Damages:
Purpose: To provide a clear, predetermined remedy for breach, saving time and costs of litigation, and to encourage timely performance.
When Used: When actual damages from a breach would be uncertain or hard to prove, such as missed deadlines or loss of reputation.
Enforceability: Courts enforce them if they meet strict criteria:
Damages were difficult to estimate at contract formation.
The amount is a reasonable forecast of anticipated loss, not punitive.
There was an intent to compensate, not punish.
What They Are Not: They are not penalties; a clause set at an unreasonably high amount is void.
This post was edited on 1/7/26 at 1:23 pm
Posted on 1/7/26 at 1:20 pm to boomtapp
Most states it is extremely hard to enforce non competes. As a Casino executive i have seen plenty of tgem worked around its state by state
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