Esports sector faces legal challenges

The esports industry is experiencing a period of consolidation, marked by the closure of some structures and legal actions taken collectively. Players whose clubs have gone bankrupt often rely on guarantees provided by the AGS (Agence de Gestion des Salarés) to recover unpaid wages, but this is only possible if the employment contract is recognized as valid.

Player's contract recognized by court

A professional video game player had a written fixed-term employment contract dated July 31, 2020, with a company operating an esports club. The contract included a net monthly salary of 3,200 euros and covered work performed from home. The player received pay slips starting July 15, 2020, and had a work certificate. After the club entered judicial liquidation, the player filed a claim with the Lyon Labor Court in February 2022 for unpaid wages and other compensation.

Court affirms contract validity

In a July 2023 ruling, the Lyon Labor Court confirmed the employment contract was real and rejected the AGS's claims about the contract being null or inopposable. The court ordered the liquidation to pay 14,184.36 euros for wages and paid leave, 4,469.86 euros for an end-of-contract indemnity, and two additional amounts of 3,200 euros for late delivery of documents. The AGS appealed the decision.

Legal principles on employment contracts

The court emphasized that an employment contract requires a worker to perform tasks under an employer's authority in exchange for pay. The burden of proof lies with the party contesting the contract's validity. In this case, the written contract, pay slips, and work certificate were sufficient to establish the employment relationship, placing the burden on the AGS to prove the contract was fictitious.

Multiple activities not incompatible with employment

The AGS argued the player had other activities, such as streaming and content creation, which could suggest self-employment. However, the court dismissed this, noting that the player’s other activities were limited in duration and did not interfere with his primary role as a professional esports player. The court also clarified that having multiple activities does not automatically negate an employment relationship.

Accreditation not a condition for employment

The AGS also claimed the club was not accredited under the 2016 Digital Republic law, which defines professional esports players. However, the court ruled that accreditation is not a prerequisite for an employment relationship. Even without accreditation, the club remained an employer, and the employment contract remained valid under common law.

Legal consequences of no accreditation

Without accreditation, the fixed-term employment contract (CDD) falls under general labor law and must meet specific criteria to be valid. If these are not met, the contract may be considered indefinite. This means the player could still claim an end-of-contract indemnity, though the amount may differ from what is provided under the special esports CDD regime.

AGS's arguments rejected by the court

The AGS attempted to argue that the contract was inopposable due to the club’s financial situation, but the court rejected this. It also tried to requalify the CDD as an indefinite contract (CDI) to avoid paying the end-of-contract indemnity, but the court ruled the AGS lacked the legal standing to make such a claim.

Late delivery of documents not justified

The court overturned the award of two 3,200 euro indemnities for late delivery of the contract and social documents, as the player did not prove any harm caused by the delay. The court followed jurisprudence that no longer requires proof of prejudice for such claims.

Legal clarity needed for esports

The Lyon court's ruling highlights the importance of proper documentation and adherence to labor law for both players and clubs. As the proposed law "for a responsible and attractive esports" moves forward, the sector must address legal uncertainties to ensure fair treatment of players and stability for clubs.