Nike Dispute With Runner Puts Penalty Clauses in Limelight
- Company drops Boris Berian lawsuit ahead of Olympic trials
- Berian won support of fellow runners in fighting Nike deal
Boris Berian of the United States competes at the IAAF World Indoor Championships at Oregon Convention Center in March 2016.
Photo by Christian Petersen/Getty Images for IAAFU.S. middle-distance runner Boris Berian is free to wear the shoes of his choosing at the Olympic trials next week, after Nike Inc. dropped a breach of contract lawsuit against the 800-meter star.
The case centered on clauses in sponsorship contracts that cut the base salaries of signed athletes if they’re injured. The practice, known as reduction, is standard in the industry, Nike said. Nike’s terms to match New Balance Inc.’s offer to Berian had several such reduction clauses, which would’ve cut Berian’s base salary by 20 percent to 50 percent were he to get injured, perform poorly or fail to wear Nike branding. New Balance didn’t have those terms.