Court Dismisses Lawsuit Filed by Youth Soccer Clubs Seeking Training Fees from MLS Players Union and Star Players

Apr 14, 2017

A federal judge in the Eastern District of Texas has dismissed the lawsuit of several youth clubs, which claimed they were entitled to collect training compensation and solidarity payments from the Major League Soccer Players Union as well as U.S. Men’s National Team stars DeAndre Yedlin, Clint Dempsey, and Michael Bradley.
The Dallas Texans Soccer Club, Crossfire Foundation, and Sockers FC Chicago claimed that regulations under FIFA, specifically the Regulations on the Status and Transfer of Players (RSTP), provided them with a mechanism for collected fees for developing the aforementioned players. They claimed that RSTP provides that training compensation is charged when a player signs his or her first pro contract and there is a change of national association. Solidarity payments, meanwhile, are collected when a player is transferred before the expiration of their contract, and there is a change of national association.
However, the USSF has refused to follow suit with the practice, claiming that implementing RSTP in the U.S. could result in a restraint of trade and violate U.S. antitrust law.
In so ruling, the court reasoned that it lacked personal jurisdiction over the MLSPU and specific jurisdiction over the players involved. It agreed that the union had minimal contacts in the state of Texas and had no offices there, and that its Collective Bargaining Agreement is with MLS and not any specific entity in Texas. “A defendant’s threat of litigation does not establish specific jurisdiction over the defendant in a declaratory judgment action,” the court wrote.
Relieved, MLS Players Union Executive Director Bob Foose issued the following comment:
“We have said consistently that training compensation and solidarity payments are bad for players, and would treat players differently than employees in any other industry, including sports. For example, it’s absurd to think that a business school could demand a fee from a company that hired one of its students. Yet, that’s the kind of payments the youth clubs seek.
“No player should have the market for his services adversely affected by these payments. This is not to say that players and the Players Union don’t believe in and support youth development. We do, but it should not be funded through a tax on randomly selected professional players’ contracts. We have said all along that we do not understand why the youth clubs sued players and their union, and we certainly do not believe that the suit was filed in the appropriate court. We’re very satisfied that the Court has agreed and brought this case to a close by dismissing it in its entirety.”
Dallas Texans Soccer Club, et al. v. MLS Players Union, et al., U.S. District Court, E.D. Texas, Case No. 4:16-CV-00464


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