When small companies compete against larger, more established companies working in the same space, they often rely on their unique selling points to set them apart from their competition and establish their own niche in the marketplace. But succeeding with that tactic becomes much more difficult if your competition starts using your own tactics against you.
According to a recent lawsuit against Ray Borg, the UFC flyweight allegedly stole trade secrets and took them to a competitor, broke his contract with a gym and a management company without warning, and committed fraud, among other things.
The lawsuit was filed by Wild Bunch Management, which is run by Tim Vaughn, who’s a team member of the gym, Fit NHB. According to the complaint, Borg was working out at Fit NHB and had a three-year contract with Wild Bunch in which the management company would arrange fights for Borg, as well as train and promote the fighter and manage the business side of his fighting career. For his end of the deal, Borg was allegedly supposed to pay Wild Bunch 20% of everything he earned in the cage up to $10,000, plus 10% of any bonuses of $10,000 or more. The contract also allegedly included a non-compete clause in which Borg agreed not to teach martial arts within 50 miles of Fit NHB for the first year after his contract with Wild Bunch had been terminated.
Wild Bunch had allegedly negotiated Borg’s five-fight contract with UFC when Borg allegedly broke off all ties with both the gym and the management company after just the first fight and without any warning. After that point, Borg allegedly switched to Jackson Wink MMA in Albuquerque, a direct competitor of Wild Bunch that’s located across town.
The lawsuit alleges fraud and breach of contract, both of which allegedly led to Wild Bunch suffering immediate injury and financial harm. The management company is seeking a percentage of the four fights on Borg’s contract for which he allegedly never paid Wild Bunch. As compensation, the management company is asking for consequential, actual, incidental and punitive damages, as well as double the damages the company allegedly incurred from the loss of their trade secrets to a direct competitor from Borg switching gyms, as well as attorney costs and legal fees.
Jason Bowles, the attorney representing Borg in the legal dispute, was pretty dismissive of the management company’s claims in a statement he released to the press. He implied that Fit NHB was just jealous that Borg switched to another, bigger, more successful gym because he wanted to become a better fighter. Because Fit NHB could not compete with the larger gym, according to Bowles, they decided to take what money they could from that gym’s fighters who were doing well for themselves.
From what he had seen of the case so far, Bowles said he didn’t see how Wild Bunch could have a claim against his client. He didn’t think a solid contract existed, but if one did, it will surely be one of the first pieces to make it into the discovery process.
Super Lawyers named Illinois commercial law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorneys Patrick Austermuehle and Andrew Murphy Rising Stars in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois business trial lawyers have over thirty years of experience in litigating complex class action, copyright, noncompete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes. Our Rolling Meadows and Schaumburg business dispute lawyers, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist Chicago and Oak Brook area businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0333 or our toll-free number (833) 306-4933. You can also contact us online here.