The Law v. FaZe Clan: A Look at the Esports’ Organization’s Recent Legal Headaches

picture of gaming keyboard to acompany post about FaZe Clan legal troubles
FaZe Clan — the high-profile esports organization — is currently riding a rough legal wave. One of the team’s top players blindsided the crew with a lawsuit that caught the world’s attention; former office mates slapped the collective with a trade secret suit; and now, people are loudly questioning whether or not FaZe Clan’s signing of an underage player was above board.

Does the gaming collective deserve all this legal heat? And what are the chances of FaZe Clan emerging unscathed from these battles?

Esports Players’ Rights: Tfue v. FaZe Clan

FaZe Clan’s biggest legal headache is the confrontation with one of its star players, Turner “Tfue” Tenney. Several weeks back, the Fortnite talent slapped his collective with a lawsuit. He claimed that FaZe Clan:

  • Made him sign an outrageously unfair contract that gave it the right to collect 80% of his earnings;
  • Operated outside established laws;
  • Encouraged an inappropriate atmosphere on occasion; and
  • Had management problems.

Tfue’s Esports Contract Lawsuit Ballooned into Big News

The lawsuit roared onto the scene. Everyone — from esports blogs to ESPN to the Wall Street Journal — weighed in on the case. Most analysts believe the suit is an inflection point for the industry, specifically professional gamers.

Word on the esports gossip curb is that Tfue may be thinking about starting his own team. If true, he first needs a judge to declare his FaZe Clan contract null and void — especially since it included a six-month non-compete clause.

Banks Calls Contract “Horrible”

Since news of the suit broke, FaZe Clan co-founder Richard “Banks” Bengston has admitted that Tfue’s contract was “horrible.” In a Twitter confessional, he lamented:

“Listen obviously Turners initial contract was horrible. Nobody ever disagreed with that. But over the last year we have offered him so many new ones, solutions. 0% splits. Honest and MORE THAN FAIR ways to solve the issue.”

He’s also publicly said:

“This was never about money. We never expected this to happen and over the last year have only collected $60k from $300k in brand deals WE BROUGHT HIM. (20%) That’s the absolute total. This wasn’t about money, ever. Or an unfair contract.

“We’ve solved those issues & are trying our best. The contract was trash. There’s no denying that.”

What’s the Deal with H1ghsky1: Potential Child Labor Concerns?

To bolster his lawsuit, Tfue included claims about FaZe Clan’s alleged misdeeds. One piece of evidence involved the signing of Fortnite phenom H1ghsky1. When he first joined the MCN, some reports claimed that H1ghsky1 was 13 years old.

Not accurate.

Turns out he was eleven. And when word broke, Twitter and Twitch immediately suspended his accounts because their terms of service agreements explicitly forbid users under 13. (Currently, H1ghsky1 streams on YouTube with a parent or guardian present.)

Though a formal action isn’t attached to this accusation, it mushroomed into another negative legal headline for the organization. To quell chatter, Banks once again stepped up to the digital podium and assured fans and followers that no laws were broken with regards to H1ghsky1. He also explained that the team had nothing to do with H1ghsky1’s decision to use Twitch and that his parents will decide whether or not to let their son participate in the WorldCup.

Based on the available facts, the likelihood of this issue morphing into a claim seems unlikely. Neither H1ghsky1, nor his parents, appear to be complaining. But you never know. Like the rest of the esports universe, we’ll be keeping an eye on how all of FaZe Clan’s legal woes develop.

The Hubrick Case: Wilding Out?

The Tfue lawsuit also called attention to another FaZe Clan-adjacent legal scrap currently making its way through the courts.

To catch you up: Hubrick, a now defunct social media company founded in 2014, allegedly helped FaZe Clan get off the ground. The two companies were tight and shared an office.

For reasons, things didn’t work out for Hubrick, and the company recently shuttered. But according to principals, their former friends at FaZe Clan marked the unfortunate folding by taking “dozens of computers and gaming stations, some of the office furniture, all of the data available to it on the computers, and left it ransacked as little more than piles of empty boxes of expensive electronics and cleared-off desks.”

To shorten a long story, Hubrick sued FaZe Clan for “intentional interference with prospective advantage and misappropriation of trade secrets.” The lawsuit also characterized FaZe Clan’s alleged actions as “a case of unabashed theft of a business by a group of its employees, officers, directors and joint venture partners…in what amounts to an overnight corporate raid.”

The Hubrick claim will likely take several months to resolve. And if they settle, we may never hear a peep about it again. A public relations professional may even suggest to the high-profile esports club that now is the time to lay low, cut PR loses, and get back to the thing that matters most: gaming and winning tournaments.

Connect with an Esports Attorney

The Gordon Law Group works with professional esports athletes, teams, MCNs, sponsors, tournament organizers, and industry suppliers on everything from contract negotiations to tax positioning. If you’ve got a legal matter related to the esports industry, we’ve got your back.

Get in touch today to begin the conversation.

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