Rouen Court Rules Again: Esports Player Can Be Hired on a Fixed-Term Contract

Facts and Proceedings

On 13 June 2024, the Rouen Court of Appeal rendered a pivotal decision regarding the employment status and rights of esports players, particularly concerning the enforceability of fixed-term contracts (CDD) in the absence of specific club accreditation. This case involved Mr. [O] [X], known professionally as Skite, a top-ranked Fortnite player, and SP Global Productions, a company that promoted online video game activities.

Mr. [X] had signed a one-year fixed-term contract with SP Global Productions, commencing on 17 September 2020. However, on 19 August 2021, the Evreux Commercial Court ordered the liquidation of SP Global Productions, appointing SCP Mandateam as the liquidator. Subsequently, on 1 September 2021, the liquidator prematurely terminated Mr. [X]’s contract, citing the company’s financial insolvency.

In the initial ruling on 6 September 2022, the Evreux Labor Court found in favor of Mr. [X], affirming that SP Global Productions had failed to meet its salary obligations and that the early termination of the contract was unjustified. The court awarded Mr. [X] unpaid wages, an early termination indemnity, and an end-of-contract indemnity. Furthermore, the liquidator was instructed to provide corrected wage statements and other necessary employment documents.

The AGS (Association for the Management of Employee Claims), which had taken over the responsibility for the unpaid wages, appealed the decision. The AGS contended that Mr. [X] was an independent contractor and not an employee, and that his fixed-term contract should be reclassified as a permanent contract (CDI) due to the lack of specific esports accreditation for SP Global Productions.

The Court of Appeal upheld the initial ruling, emphasizing several key points. It confirmed Mr. [X]’s status as an employee, citing the existence of a signed CDD and the AGS’s failure to prove the contract’s fictitious nature. The court noted that the CDD met all formal requirements and was justified by a temporary increase in activity, thus negating the need for reclassification as a CDI. Importantly, the court ruled that the absence of esports-specific accreditation did not invalidate the CDD or affect its enforceability against the AGS, which remained obligated to guarantee the amounts due by the employer to the employee.

The court confirmed Mr. [X]’s entitlement to unpaid wages amounting to EUR 32,532.85 , an early termination indemnity of EUR 3,603.56 , and an end-of-contract indemnity of EUR 7,337.415 (specified as gross). Additionally, the liquidator was reaffirmed to provide the corrected wage statements and other employment documents as previously ordered.

Legal Analysis and Future Perspectives

The recent ruling by the Rouen Court of Appeal has significant legal implications for the esports industry, particularly regarding the employment of players under a CDD without the necessity of specific club accreditation. This decision brings to light several crucial aspects of labor law as it applies to the esports sector.

Legitimacy of Fixed-Term Contracts

One of the primary outcomes of this ruling is the affirmation that esports players can be legitimately employed under fixed-term contracts, regardless of whether the esports club has specific accreditation. This aspect of the decision is particularly important because it provides legal certainty to players and clubs operating in a relatively new and rapidly growing industry. The court’s decision ensures that players are afforded the same rights and protections under labor law as athletes in traditional sports. This includes the right to claim unpaid wages and other entitlements, which is a significant step towards standardizing employment practices in esports.

Burden of Proof on Employment Contract Validity

The court placed a considerable emphasis on the burden of proof resting with entities like AGS to demonstrate the fictitious nature of employment contracts. This aspect of the ruling underscores the necessity for esports organizations to maintain thorough and accurate documentation of their contractual agreements. Proper documentation is therefore critical for defending the legitimacy of these contracts in legal disputes. This requirement aligns with broader labor law principles that seek to protect workers from exploitative practices and ensure that employment relationships are genuine and not merely a facade to circumvent legal obligations.

Implications for Esports Organizations

For esports organizations, this ruling serves as a stern reminder of the importance of compliance with labor laws. It highlights the need for these organizations to establish robust contractual frameworks and maintain comprehensive records to substantiate the authenticity of their employment relationships. Failure to do so could result in legal challenges and potential liabilities.

Conclusion

The Rouen Court of Appeal’s decision is a landmark in esports law, validating the use of fixed-term contracts without the need for club accreditation and reinforcing the protection of players’ employment rights. This ruling is expected to have a lasting impact on the esports industry, influencing future contractual practices and elevating legal standards. As the esports sector continues to evolve, this decision will likely serve as a foundational precedent, guiding the development of fair and legally sound employment practices. Esports organizations must now prioritize compliance with labor laws to safeguard their operations and protect the rights of their players, ensuring the sustainable growth of the industry.

Case No. RG 22/03196 – Portalis No. DBV2-V-B7G-JF5R

Appellant:

• AGS CGEA (Location 7), represented by Guillaume des Acres de l’Aigle, SCP Boniface Dakin & Associates, Rouen Bar.

Respondents:

• Mr. [O] [X], represented by Frédéric Caulier, SELARL Caulier Vallet, Rouen Bar.
• SCP Mandateam, liquidator of SP Global Productions.

Via Victoire Avocats