Former Employee Sues Tapout for Wrongful Termination, Defamation, Emotional Distress

By Tracey Lesetar Feb 1, 2011
A former Vice President of Sales for Tapout filed suit in Los Angeles Superior Court on Monday, alleging claims that include wrongful termination, fraudulent misrepresentation, failure to pay wages, defamation, intentional infliction of emotional distress, and a litany of negligence claims.

Not only does Lee Lemon target Tapout as a defendant, but also Zuffa, LLC (parent company of the UFC), MMA Authentics, MMA Holdings, LLC, Authentic Brands Group, LLC, Daniel "Punkass" Caldwell, and even the estate of the late Charles "Mask" Lewis.

Most of Lemon's allegations are focused on former Tapout President Marc Kreiner, who Lemon claims abused the sales staff, allegedly calling them "f--kng worthless" and telling Lemon that he was "stupid, incompetent, and ignorant," and that Kreiner could "hire a monkey to do his job." Lemon also alleges that he was promised $400,000 per year in pay, but was never paid that amount. Instead, he argues, he was not paid the commissions he was owed, was berated constantly, falsely accused of firing employees without approval, blamed for salary cuts, and then directed to "defraud investors ... by inflating the sales numbers and at the same time hiding accounts, to engage in thefts from licenses" before he was "constructively terminated" in May of 2010. (Under California law, constructive termination essentially requires the plaintiff to show that they resigned or quit because their working conditions were so intolerable that no reasonable person could be expected to endure them.)

According to Lemon, Tapout gave him a settlement at the time he left the company, through which he was promised money (including the sales commissions he was allegedly owed) in exchange for a "release," or a guarantee that he would not bring certain future legal claims against the company. Such agreements are usually permissible and not uncommon when employees leave their employer. (But as a side note, this contributor notes that in California, employers are generally not allowed to withhold money that is already owed to the employee in exchange for a future release of claims.)

Although Lemon signed the agreement, he argues that it was null and void for three reasons. First, he claims that he was under severe duress when he signed the agreement. Second, Lemon says that he was falsely told that the release was only for any legal claims related to his sales commissions, when in reality, it was a roadblock barring all future legal claims. And third, Lemon states that the defendants generally failed to hold up their end of the agreement by not paying him the money he was promised. In fact, Lemon asserts in the complaint that he has contacted the defendants over 80 times via e-mail or phone in an attempt to recover the money, to no avail. Because he presumably believes that his original promise not to sue is now null and void, Lemon initiated this lawsuit.

At this point in employment litigation, defendants usually respond by filing an answer to the complaint or offering the court a reason why they should be dismissed from the litigation altogether. With all of the defendants in this case -- eight total -- we can expect to see a mix of both types of responses.

Incidentally, this lawsuit comes on the heels of a $3.2 million jury victory last week against Tapout in the same court, reported by MMAPayout and the Beverly Hills Courier.

Tracey Lesetar, an attorney at the global law firm Orrick, Herrington & Sutcliffe, is experienced in various matters related to the business of MMA. A more detailed background regarding her experience is available through her lawyer profile at www.orrick.com. This article does not provide legal advice, and any opinions expressed in this article are solely those of the author and do not reflect the views of her law firm. Lesetar can be reached at tlesetar@sherdog.com. J.R. Riddell (jriddell@sherdog.com) also contributed to this article.
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