30/04/2024
FEATURE BY MAX NOBLE
For those with a particular taste in humour (Monty Python not being a bad start point), the Robot Chicken Star Wars trilogy is a delight of modern humour. For others not so much... from a certain point of view.
During one episode there happens to be a musical number sung by Obi Wan and Yoda to Luke attempting to explain what's going on. Admittedly, an acquired taste, yet as many of our readers enjoy 60 laps with no overtaking, I think some of you are of the right mind to either (a) already know and love Robot Chicken, or (b) might (might) gain something from watching the song on YouTube.
From a certain point of view is just what one needs when dealing with Formula One contracts. V. Max is tied to Red Bull... from a certain point of view. All contracts have a variety of clauses. Bernie's used to run to a few words and a handshake... it kept things simple, got things done, and got them done quickly.
From a certain point of view Adrian could beat V. Max to the exit. Those of us on the outside will simply have to wait and see. What your scribe can do for you is muse for a moment on the delights of contract law... which can be fun, from a certain point of view...
Obviously "What are you going to pay me?" Is a key definition within any driving contract, usually paired with "How long for?", and "What are my renewal options?" So far, so good. Then we dive into modern complexities, all because... well because people find the strangest ways in which to disagree. "I'm winning more. Pay me more." Is a reasonably simple one usually addressed via a "dollars per point/win" approach. Something both sides can usually live with.
Then we have the slightly more complex, "This season your car is crap, I want out early." Again in the old days people would shake hands. The team would stop paying the driver, and he would walk down the pit lane and start driving for someone else. These days it is all a bit more testy. So performance clauses can trigger in both directions. Drivers can be dropped for not scoring, teams can be left because the car cannot score. Again nothing too complex on the surface... until one has to define what is "not performing"? I've scored half the points of the current season leader? Half the points of my team mate? Only 10% more than Haas? 5% less than this time last year?
It is when one tries to give explicit definitions, with precise legal meaning that can be easily assessed that the trouble starts. "I'm not under-scoring, your car has gone backwards compared to last year." Or, as in Daniel's case right now, "Give me a new chassis, this one doesn't work."
Then we dive into the murky world of grandfather clauses, and break clauses. This is where the real adventure commences! As we used to say in the Defence Industry, "No one cares about the contract until we all fall out." Which is to say, as long as everyone feels it is going well, no one bothers with the precise detail of the contract. Then, when the parties fall out... well each side awakes the Kraken which is the corporate lawyer, and bloody battle commences.
All of a sudden paper trails of who delivered what, when, for how much, and to what standard, become gut punches, wild swings in the air, and much sabre rattling from a safe distance. In the first instance the sides exchange letters, a nod to trying to sort it out in a mildly polite manner. My feeling is this is the phase which is drawing to a close right now at Red Bull. Everyone has tried to crawl back to positions they can all live with, and the feeling on the outside is that they are failing.
The have argued over differing views, interpretation of contract definitions, and what it might take to simply "Shake hands and make up." This is where the wider press is missing the mark. V. Max is not "locked-in until 2028". He has a current contract that runs until 2028, which would have very specific break clauses in it. Assuming V. Max wants out, the issue is, "Have any break clauses been triggered"? If the answer is no, one then looks at how contract disputes are handled.
In international contract law one often has to work through several courts to get to an outcome. Because two, or more, countries can be involved the contact should state the escalation pathway, or a single international court, such as the International Court of Sports Arbitration, based in Lausanne Switzerland. The contract will state something along the lines of "...if no agreement can be reached, each party shall lodge formal arguments with CSA in English and French within 60 days of formally setting the date on which an agreement could not be reached". Other terms and conditions within the contract would state how each party agrees to be bound by the outcome of any CSA decision.
Alternately, parties might agree to a specific court in each of their home countries. For example Red Bull might elect the high court in the UK or one in Austria. Followed by, say, a French court for disagreements with the FIA (HQ in Paris), or Washington DC for disagreements with Liberty Media (US company). Or possibly a court in Monaco, as many driver's reside there. No matter, the reader should be getting the idea that a contract is never watertight. It will always explain how you go about disagreeing, and working to a termination. At this point we note two specific things about contracts. First you cannot have clauses in a contract which are illegal if enforced. Some years back we had a supplier put a clause in their contract stating that if we were late returning loan equipment they reserved the right to break into our offices and steal their items back. I showed this to our corporate lawyer and he laughed. "No issue signing!" he smiled, "Once they break into our office, their criminal activity trumps a commercial contract. The clause is unenforceable as it is basically illegal. Sign away!"
The second is it must be fair and reasonable. A clause such as, "You can never ever work for anyone else in the history of history, unless I say so", is also basically unenforceable as it is restrictive, anti-competitive and verging on slavery. This is why gardening leave is so interesting to enforce. I'm sure if someone challenged a team in court on it, that the amount of time required would be greatly reduced. Three to six months might well be considered reasonable, 12 months is a push, and anything beyond that one could argue the team is trying to stop a person from earning a reasonable living via their profession. I'm sure this is a topic that both Adrian's and V. Max's lawyers are exploring with Red Bull right now. Gardening leave works because everyone (a bit like driving on the left in the UK, and Australia, and the right in the USA) simply agrees it is a good idea. There is no rule in Australia stating you must drive on the left. If you insist on driving on the right... you will be charged with dangerous driving, driving without due care and attention, reckless driving, etc. You will not be charged with "not driving on the left" as that law does not exist.
So! If... if... Adrian is looking to walk, the legal arguments will boil down to, how much to break early, how soon to commence working for another? It is not "impossible" it just needs to be worked out.
Same for V. Max. Want to leave early? OK, let's work out what that's going to cost you.
I'm assuming neither of them have break clauses that have triggered. On track the team is doing the usual amazing job. Hence, it will all be boiling down to which court they need to go to for the argument to continue, or to privately generate an agreement both sides can live with. Clearly the most fascinating, unknown, aspect of this for us on the outside is; is Adrian, or V. Max saying to the team "either Christian goes, or I go". Then angle for a breach of good faith, stating the work environment is harmful/toxic/bad for mental health and thus not a safe work environment. That would be a fascinating angle to work through. From a certain point of view.
So dear reader, no contract anywhere ever, is "water tight" - whatever that really means, just ask Titanic.
All implausible tabloid gossip with no chance of either leaving? Yes, from a certain point of view.
All happening via frantic emails, texts, and hushed conversations for one, or both parties? Maybe, from a certain point of view.
Guaranteed to have lawyers on all sides calling their favoured car dealer and pulling forward the order on that limited edition they simply have, to have? Oh dear reader! From every point of view!
Max Noble
Learn more about Max and check out his previous features, here