Faze Clan is being sued by one of its top Fortnite players over 'oppressive and predatory' contracts

Image source: Faze Clan

Turner "Tfue" Tenney of Faze Clan is one of the biggest Fortnite streamers on the scene right now—he recently earned a spot in the Fortnite World Cup finals—which is why his lawsuit against Faze Clan, the esports organization he plays for, is very big news. Via The Hollywood Reporter, Tenney says his contract with Faze violates California law by limiting his self-promotional opportunities and failing to pay him his fair share of earnings. 

Tenney claims in the lawsuit that he's lost out on significant income as a result of the Gamer Agreement he signed in April 2018, because it prevents him from taking part in promotional opportunities without the involvement of Faze Clan. But when Faze Clans negotiates sponsorships featuring Tenney and other members of its team, it's purportedly entitled to 80 percent of revenues earned as "commission for sourcing the deal," which for someone with more than ten million YouTube subscribers is potentially a huge chunk of change to be missing. He's also required to pay Faze Clan 50 percent of revenues earned through "appearances, touring, and similar activities."

"That Gamer Agreement is grossly oppressive, onerous, and one-sided," the lawsuit states. "Faze Clan uses its illegal Gamer Contracts to limit Tenney to deals sourced exclusively by Faze Clan and to prevent Tenney from exploring deals presented by others; deals that are potentially superior to deals procured by Faze Clan; and deals that are not saddled with an eighty percent (80%) finder's fee." 

Tenney apparently tried to get out of the contract in September 2018, but Faze contended that he's still bound by its terms. The lawsuit thus asks the court to declare the contract terminated, and also seeks "fair payment for his services" as well as profits and punitive damages. 

Without naming names, Tenney expressed his thoughts on unfair esports contracts while streaming on Twitch a few days ago:

But the lawsuit goes deeper than just Tenney's individual claim: It also alleges that, because it represents him and others in the esports field, Faze should be licensed by the labor commissioner, as required by California's Talent Agency Act. Currently it is not, and if the court finds in Tenney's favor it could have a much broader impact on the industry as a whole.

"Under Faze Clan's illegal Gamer Agreements, Faze Clan secures the purported right to procure employment or engagements for young artists like Tenney. To that end, Faze Clan's primary and essential function is to promote and sell Tenney's artistic services and procure sponsorship deals  which feature those services. Sponsors pay for Tenney to perform in and create online content and/or to model apparel featuring the sponsors' brands. Faze Clan then retains a grossly unconscionable commission for sourcing the deal," the suit says in its summary of the contravening behavior. 

"Because Faze Clan is unlicensed, it has avoided regulation by California's Labor Commissioner. The need for licensure and regulation, however, is dire. Not only does Faze Clan take advantage of these young artists, it jeopardizes their health, safety and welfare in violation of the Talent Agency Act."

Tenney says in the suit that he was pressured to live in a Faze Clan house with other members of the organization's roster, where booze-fueled parties were "frequently" held. "Even though Tenney was underage until he turned twenty-one in January 2019, Face Clan would furnish and encourage Tenney to consume alcohol," the suit states. "Additionally, Faze Clan would encourage Tenney and others to illegally gamble at the 'Clout House' or 'Faze House.'"   

Faze also allegedly pressured Tenney and others into performing "dangerous stunts" for videos: He claims he was hit by a car while skateboarding for one video, and suffered "permanent disfigurement" after injuring his arm during another. "Following the injury, Faze Clan did not even seek appropriate medical attention," the suit says. 

Bryan Freedman of law firm Freedman and Taitelman, which is representing Tenney, told The Hollywood Reporter that he is "sending a message" with the lawsuit. 

"The time is now for content creators, gamers and streamers to stop being taken advantage of through oppressive, unfair and illegal agreements. The significant legal actions taken today will be a wake up call that this behavior will no longer be tolerated," he said. "The gaming community deserves a safe environment that allows gamers the freedom to control their own careers." 

Faze Clan chief operating officer Ricky Banks said on Twitter that the complaint is "pretty unbelievable." The lawsuit does not actually allege that Faze claims 80 percent of prize money, however, but of revenues earned through promotional streaming.

Update: Faze Clan itself has now issued a statement denying all of Tenney's claims regarding his earnings.

"We're shocked and disappointed to see the news of Tfue's press article and lawsuit. Over the course of our partnership with him, which began in April 2018, Faze Clan has collected:

$0 - Tournament Winnings

$0 - Twitch Revenue

$0 - YouTube Revenue

$0 - from any social platform

In fact, we have only collected a total of $60,000 from our partnership, while Tfue has earned millions as a member of Faze Clan. While contracts are different with each player, all of them - including Tfue's - have a maximum of 20% to Faze Clan in both tournament winnings as well as content revenue, with 80% to the player. In Turner's case, neither of those have been collected by Faze Clan. 

We're proud of what we've accomplished together of the past year with Turner and will continue to support him."