Basketball law: what to do when a basketball club fails to comply with its obligations towards a basketball player?


The employment contract of a professional basketball player normally includes clear provisions regarding the player’s salary. Many contracts also contain clauses in regard to bonuses a player may be entitled to in specific events (e.g. when the club finishes within the top three of the competition). Sadly, it happens rather often that a club does not pay the player all the amounts that are due. This may be because there is a legal dispute about the meaning of a specific clause in the contract or whether certain bonus criteria are met. But it may also be due to other reasons, such as a club’s disappointment with the player’s performance or financial difficulties. It can be really troublesome when a club suddenly stops paying a basketball player’s salary.

Luckily, there are a couple of legal remedies available to the player!

Basketball Arbitration Tribunal (BAT)

The vast majority of basketball contracts contain a clause that designates the Basketball Arbitral Tribunal (BAT) as the competent dispute resolution body to deal with basketball disputes. The BAT is an independent arbitration tribunal designed to help all parties involved with a basketball contract see that contract respected. The BAT enables players to claim outstanding amounts in a cost-effective and relatively quick legal process.

The default decision standard of the BAT is ex aequo et bono. This means that the arbitrators do not have to apply national laws or regulations of FIBA, but instead simply render a decision “according to the right and good”. In this way, the BAT is very different from the FIFA DRC (which applies FIFA regulations) or the CAS (which normally applies national laws). Some lawyers may argue that by applying the principle of ex aequo et bono the BAT has the opportunity to act outside the law and the outcome of a legal procedure may become very unpredictable. However, this is not the case. The BAT is still bound to fundamental principles of the law, such as the principle of pacta sunt servanda (which means “agreements must be kept”) and the principle of good faith. Furthermore, over the years a large amount of BAT awards are rendered and published which gives a pretty good idea of how the BAT deals with certain disputes.

Any sports lawyer that thoroughly studied the jurisprudence of the Basketball Arbitral Tribunal should be able to predict the outcome of that procedure with a certain amount of certainty. For example, they should be able to tell you if a club may use disciplinary sanctions (e.g. fines) to offset a claim of the player, whether the claim is time-barred or not, etc.

Considering the fact that the BAT awards compensation for legal expenses to the prevailing party, the legal proceedings before the BAT do not have to cost a lot of money. In addition, it should be noted that any advance costs are based on the amount claimed in the dispute, which lowers the bar for legal proceedings in cases with a lower financial value.

Unilaterally terminating the employment contract

In addition to lodging a claim in front of the BAT, the basketball player may also consider unilaterally terminating its employment contract. Sometimes the employment contract stipulates under which conditions a player may terminate the contract. If the contract contains such a clause, then it is important that the player abides by the agreed terms. So, in the event that a default notice is required, a player should first send such a notice to the club before terminating the contract. And when the contract stipulates that termination is only possible after a delay in payment of 60 days, it may be wise to actually wait for this period to lapse before terminating the employment contract.

However, even when the employment contract does not explicitly provide the option of unilaterally terminating the contract, a player may have “just cause” to terminate the contract if a basketball club fails to comply with its obligations towards the player. Not any breach of the employment contract by the club constitutes a “just cause” to terminate the contract. In order for a breach to be considered as a “just cause” to terminate the contract, the breach has to be of specific importance. Furthermore, a player may be held to take into account some procedural steps before actually terminating the contract.

In the event that a player unilaterally terminates the employment contract with “just cause” (or in accordance with a contractual clause) additional compensation can be claimed from the basketball club. The amount of compensation depends on several factors, including the player’s efforts to mitigate the damages. However, in the event that the player terminates the contract without just cause, the player may become liable to pay fines and/or damages to the club.

Considering the aforementioned, unilaterally terminating the contract is a delicate issue. It is recommended to consult a lawyer specializing in basketball law before taking any decisions in this respect.

Penalty clauses

Sometimes penalty fees are due in the event that a club fails to comply with its financial obligations towards a basketball player. For penalty fees to become due a penalty clause must be included in the basketball contract. These late payment penalty fee provisions could be used as an effective tool to persuade a club to actually pay the outstanding amounts. Thus: including a penalty clause in a basketball contract normally is a great idea!

BAT case law shows that penalty fees are normally awarded unless they are deemed excessive. If this is the case, the BAT may only award a part of the penalties that accrued under the contract. Furthermore, it should be noted that accruing penalty fees may not become a business model in and of itself. If the player simply waits with lodging a claim before the BAT in order to be able to claim a higher amount of penalty fees, the request to award those fees may be (partially) denied by the BAT.

Sporting sanctions

In the event that a basketball club still fails to comply with its obligations even after a BAT Award was rendered (by means of which the club is ordered to pay the outstanding salary, bonuses, penalty fees, and/or compensation) a player may ask FIBA to impose sporting sanctions on the club. These sanctions could include a ban on the club to register new players. Normally this is a great means to pressure a club to comply with the award. However, if the sporting sanctions prove to be ineffective, additional steps could be taken in order to execute the BAT Award (to our knowledge this has not been needed yet since the BAT was founded).

In  conclusion

Considering all the aforementioned, a basketball player can consider multiple remedies when his or her club fails to comply with its (financial) obligations. However, it is always a good idea to consult a specialized lawyer. This may help prevent unnecessary costs and should prevent that the player becomes liable him- or herself for unilaterally terminating the contract too quickly.

Are you in need of legal assistance in regard to a basketball dispute? Or do you simply want to know more about basketball law? Feel free to contact us!

Our colleague mr. Nick Poggenklaas is specialized in basketball law and frequently publishes articles related to sports law and/or basketball. He is currently also authoring a book with the working title “The Jurisprudence of the Basketball Arbitral Tribunal (BAT)”. If you are interested in this project and future publications related to basketball law, simply send Nick a message and he’ll keep you updated.

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