Breaking: Judge in Boris Berian Case Needs Another Week Ruling Delayed until Next Wednesday

Avocado's Number wrote:

not so simple wrote:

It doesn't matter if Merhawi told them there were no reductions. He could have told them NB were also throwing in a puppy and warm hugs. Berian's original Nike contract from 2015 stipulated that any offer from a third party would have to be submitted on company letterhead. Merhawi failed to do that, but Nike asked him to do so, and Merhawi complied.

Nike then informed Merhawi that they would match the NB offer, but that it didn't mention anything about reductions, so they wanted clarification on that too, but that they intended to match regardless. Merhawi never provided that (maybe he mentioned it in the conference call, but again, that all has to come on NB letterhead). He obviously could have gotten that from NB, since NB testified under oath that the deal had no reductions.

So why didn't Merhawi get NB to provide that? It's fairly obvious that, because Berian didn't want to be with Nike, Merhawi knew that providing such documentation would mean that Nike would fully match, and it would be over.

So why did Nike later send the full contract that did include reductions? I'm not sure, but I'd guess it was a means to force the issue, since it was apparent that Berian had no intention of giving in, and it seemed as if the communication dried up. I'm no Nike fan, and can't understand why they'd go to such lengths to keep an athlete who doesn't want to run for them, but if you look at it from their perspective, you can see how they would feel Merhawi didn't deal with them in good faith.

Although I agree that this seems to be at the center of the dispute, it's not at all clear to me that Merhawi was required to provide Nike with a "No Reductions" clause or statement on New Balance letterhead.

The right-of-first-refusal clause in Boris's 2015 contract required Boris to provide the "specific terms" of the third-party contract. If there were no "specific terms" in the New Balance contract about reductions, and Merhawi (on January 19, I believe) told Nike that the New Balance contract did not include any reductions, I don't see why he would be required to resend the offer with an express "No Reductions" clause on New Balance letterhead. (If, however, the New Balance contract specifically stated that there were no reductions, my conclusion would likely be different.) I don't believe that complete silence on the subject of reductions would constitute a "specific term" of the New Balance contract, and Nike's reliance on questionable concepts like "industry standard" reduction clauses (which became "relatively common" reduction clauses when Nike's attorney referred to them at oral argument on the motion for preliminary injunction) is unpersuasive to me.

Both sides were less than forthcoming during the discussions. Merhawi probably could have provided a "no reductions" statement on New Balance letterhead. Nike could have said, within the relevant time period, that it agreed to match New Balance's offer with no reductions, and could perhaps insist at some later point for proof to back up Merhawi's assertion that the New Balance offer included no reductions. Both sides were taking some risks to get what they wanted -- Merhawi wanted no matching offer from Nike, which wanted a contract with numerous reductions if Boris's promising but far from certain career didn't quite pan out.

I understand that one can argue that Merhawi violated the contractual covenant of good faith and fair dealing, but I don't believe that would be a correct interpretation of the implied covenant or its application here; I think that Nike's lengthy list of reductions in an allegedly matching offer is more illustrative of a breach of the implied covenant. All in all, I'm somewhat inclined to believe that Merhawi simply got the better of Nike, and I believe that the legal proceedings will play out reasonably well for Boris from this point forward. Whether things will play out well on the track is another matter; this legal dispute with Nike has surely been a distraction. It has probably also been a substantial expense for Boris, and I'm not aware of any "Attorney Fees" or "Prevailing Party" provision in his contract with Nike that will allow him to shift legal fees and costs to Nike.