Following its failure to qualify for the League of Legends (LoL) Worlds 2024 for the first time since 2016, the e-sports organization Cloud9 has once again stirred up the LoL scene by unexpectedly terminating the contract of Joseph Joon “Jojopyun” Pyun, a player signed as recently as November 2023. The reason behind the termination is reportedly Jojopyun’s tardiness to training sessions, workouts, and meetings on at least 43 occasions.
Jojopyun is considered one of North America’s greatest LoL talents in recent years and the highest-paid LoL player in the region. Consequently, there are rumors within the scene that Jojopyun is being made the scapegoat for Cloud9’s disastrous season and that the organization is merely attempting to escape his highly lucrative contract.
The following will briefly outline whether such a termination, based on the known facts, would be permissible under German law.
I. Legal Right to Extraordinary Termination, Sec. 626 BGB
First, an extraordinary and immediate termination under Sec. 626 of the German Civil Code (“BGB”) could be considered.
1. Existence of Good Cause
The first requirement is the existence of good cause. Good cause for an extraordinary termination exists if, considering all the circumstances of the individual case, it is unreasonable for Cloud9 to continue the employment or service relationship with Jojopyun at all (even for the duration of the regular notice period or the contract term).
Such a reason could be seen in Jojopyun’s repeated tardiness.
2. Weighing of Interests
Moreover, every extraordinary termination requires a comprehensive balancing of interests. The employer’s interest in terminating the employment or service relationship must be weighed against the employee’s interest in maintaining it. The employer must have no reasonable alternative but to terminate the relationship, as all milder options must be unfeasible (the principle of ultima ratio). On the employee’s side, it must be considered whether the conduct was foreseeable and whether the employee could expect the employer’s tolerance of such behavior.
According to the Federal Labor Court (BAG), repeated tardiness only justifies an extraordinary and immediate termination if it reaches the level and impact of a persistent refusal to fulfill work duties (BAG judgment of March 17, 1988 – 2 AZR 576/87). In this case, 43 instances of tardiness could be seen as a “persistent” breach of duty by Jojopyun. A persistent violation of contractual obligations occurs especially when a breach is repeated despite warnings, indicating the employee’s intent to disregard contractual duties. In the cited BAG decision, the court found a persistent breach of duty where an employee had been tardy 104 times over 1.5 years and had received 6 warnings.
However, the Regional Labor Court Rheinland-Pfalz (LAG Rheinland-Pfalz) deemed an extraordinary and immediate termination invalid, even though the employee had been tardy several times a week over a 5-month period, receiving 3 written warnings and further verbal reprimands (LAG Rheinland-Pfalz, judgment of December 8, 2016 – 2 Sa 188/16). The court held that it was reasonable for the employer to wait for the regular notice period to expire, and thus an ordinary termination should have been issued instead as a milder measure.
In this case, it is unclear whether Cloud9 terminated Jojopyun’s contract with or without notice. Moreover, it is not known whether Jojopyun had been warned by Cloud9 about his tardiness. Under German law, if Cloud9 had not previously issued a warning, the extraordinary termination would be invalid. Even if a warning had been issued, the question would arise whether it was valid, as under German law, very stringent requirements are imposed on the validity of warnings to ensure they serve their purpose of providing notice and warning.
In conclusion, an extraordinary and immediate termination would likely be invalid unless Jojopyun had signaled to Cloud9 that he no longer wished to play for or work with the team and intended to continue being tardy.
II. Ordinary Termination
With respect to ordinary termination of the employment relationship, it is important to note that contracts between e-sports organizations and players are typically fixed-term employment or service contracts.
In the case of an employment relationship, the German Dismissal Protection Act (KSchG) applies if the employment relationship has lasted for 6 months and the e-sports organization employs 10 or more people, Secs. 1 para. 1, 23 para. 1 of the Dismissal Protection Act. If these conditions are met, the employer needs a valid reason to issue an ordinary termination. Such reasons may be personal, operational, or, as in this case, behavioral. However, in the case of behavioral grounds, a warning must be issued before the termination can be valid, giving the employee the opportunity to change their behavior. Only if the employee is late again, depending on the severity (e.g., only a few minutes), can a further warning or an ordinary termination be issued.
Additionally, for fixed-term contracts, Sec. 15 para. 4 of the German Law on part-time working and fixed-term contracts (TzBfG) must be considered, as ordinary termination of a fixed-term contract is only permissible if it has been agreed upon in the employment contract.
However, if the player is hired as a freelancer in a service relationship with the e-sports organization, they cannot invoke protection against dismissal, and the contractually agreed notice periods apply.
III. Procedure to contest the termination as an employee
Should Jojopyun wish to contest the termination, under German law, he would need to file a dismissal protection claim within 3 weeks of receiving the written notice of termination, provided he is an employee and not a freelancer.
Although the Protection Against Dismissal Act only applies to employees, it is common for employees to be mistakenly classified as freelancers, even when they have actually established an employment relationship (pseudo-self-employment). In such cases, the 3-week deadline also applies to these individuals.
IV. Procedure for Termination by Employer
In principle, it depends on the specific circumstances of each individual case whether an extraordinary and immediate termination due to repeated tardiness is effective. Therefore, a general statement cannot be made as to when such an extraordinary termination would be valid.
In any case, it is advisable for employers to thoroughly document all instances of tardiness. On the one hand, this serves as evidence in the event of a potential legal dispute, and on the other hand, it can demonstrate the severity of the tardiness. The more significant the delays are, the more likely it is that a court will consider the extraordinary termination to be effective.