Clause 12b in NASL contract allows easy termination of player contracts

Photo credit: New York Cosmos

Recently, we discussed the potentially troubling interpretation of the USL’s player contract in the contract termination of FC Cincinnati’s Tommy Heinemann. From our perspective, the troubling clauses in the USL contract have the potential to be abused to limit the validity of player contracts. Unfortunately, another similar contractual clause exists in the NASL version of the player contract.

Clause 12b states:

“Club may terminate this Contract between any seasons at any time after the day of Club’s last game in a season (regular season or playoff) and Club’s first game of the following season. Player acknowledges that part of the compensation paid to Player is in consideration for this right to terminate this Contract.”

The interpretation of this clause is potentially troubling. On face value, it allows teams to terminate a player’s contract without any justification, as long as the date of termination is before the start of the season.

Soc Takes spoke to three legal experts who also cover the beautiful game for their understanding of clause 12b. They suggested that the clause is fairly standard for most (non-soccer) employment contracts and in this case would permit teams to decline extra-year options. In effect, rendering all contracts as rolling one-season contracts.

However, except in the case of one USL expansion team, it should be pointed out that this termination clause does not exist in the generic USL player contract.

Another question arises from that clause. Does the section stating “part of the compensation paid to Player is in consideration for this right to terminate this Contract” suggest that players have a right to compensation of the balance of their contracts or not? The legal experts, the players as well as staff we spoke to all unanimously agreed that that clause facilitates contract termination without any further financial obligations.

APPLICATION

How often is it used? The short answer to this question is “rarely.” Out of a hundred-plus contracts signed by NASL players last year, the number of terminations Soc Takes has learned about is in the single digits. Additionally, certain clubs are more guilty of using it than others. Per club personnel, in recent years, Miami FC and the Jacksonville Armada have not terminated any player contracts using section 12 (b).

Club sources inform Soc Takes that the Jacksonville Armada player contracts have removed clause 12b from their contracts entirely. Club personnel said that the clause was taken out two years ago to protect the players as well as the club from potential legal troubles. (Note: Soc Takes has seen one Jacksonville Armada player contract and it does not contain clause 12b).

The New York Cosmos used clause 12b to terminate multiple player contracts during their financial troubles at the end of the 2016 season. The club did not activate the clause in any player contracts at the end of the 2017 season and is believed to be paying players still on contract.

Club sources have confirmed to Soc Takes that Indy Eleven has executed Clause 12b this year. Soc Takes has learned that the club has executed the clause at least four times in the last two years. On one occasion, the club picked up a player’s contract at the start of the season and then terminated the contract before the season kicked off, citing clause 12b as justification. Indy recently joined the USL and will not be able to use this method to prematurely terminate player contracts any longer. 

The San Francisco Deltas only played for a year, therefore this clause would not apply to them. Soc Takes understands that most Puerto Rico FC players were on one-year contracts, and therefore this clause would not apply to them. Soc Takes was unable to determine the usage of this clause by FC Edmonton and North Carolina FC.

WHAT THIS MEANS

Players in the NASL can have their contracts legally terminated via a specific clause. Soc Takes understands that senior NASL personnel have long debated elimination of this clause, and believe that it has the potential for misuse.

This author hopes to see the NASL survive and play in the fall of 2018. But if the league wants to support its general perception of being player-friendly, it should certainly abandon clause 12b, as it is yet another example of limiting player power at the lower levels of American soccer.

Follow Nipun on Twitter: @NipunChopra7.

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