Mendenhall v. Hanesbrands, Inc.
2012 U.S. Dist. LEXIS 51664
M.D.N.C.2012Background
- Mendenhall, an NFL running back, signed a May 2008 Talent Agreement with Hanesbrands to promote Champion.
- An August 2010 Extension Agreement extended the term to April 30, 2015 and modified Section 17(a).
- Section 17(a) originally allowed termination for felonies or crimes involving moral turpitude; the Extension broadened it to acts that bring Mendenhall into public disrepute or offend the public or any protected class, with Hanesbrands’ decision deemed conclusive.
- Beginning January 2011, Mendenhall used Twitter to express controversial views; Hanesbrands did not publicly object at that time.
- In May 2011, after tweets about Osama bin Laden and related topics, Hanesbrands terminated the Talent Agreement under Section 17(a) and issued public statements; Mendenhall disputed the basis and sought damages for breach.
- Plaintiff filed suit July 2011 alleging breach of contract, wrongful termination, and related claims; Hanesbrands moved for judgment on the pleadings, arguing conclusive termination authority under Section 17(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mendenhall pleads a breach of contract claim. | Mendenhall alleges termination under Section 17(a) was improper. | Hanesbrands had conclusive termination rights under Section 17(a). | Denial: factual issues preclude dismissal on pleadings. |
| Whether Hanesbrands breached the implied covenant of good faith and fair dealing. | Termination must be reasonable and not arbitrary. | Discretion under Section 17(a) may be exercised within good-faith limits. | Denial: dispute exists about reasonableness and motives; not appropriate for judgment on the pleadings. |
| Whether the court should apply New York law to interpret the contract. | Choice of law provision points to New York law. | New York law applies per contract clause; court should follow it. | New York law applies; contract interpreted under New York standards. |
| Whether news reports attached to the Answer may be considered on a Rule 12(c) motion. | News reports should be disregarded as unauthenticated. | News reports show public reaction supporting termination. | Not considered; not properly before the court on pleadings; motion not converted to summary judgment. |
Key Cases Cited
- Dalton v. Educ. Testing Serv., 87 N.Y.2d 384 (N.Y. 1995) (good-faith covenant limits discretion in contract performance)
- Fishoff v. Coty Inc., 634 F.3d 647 (2d Cir. 2011) (good-faith and fair-dealing require reasonable, proper motives)
- Sveaas v. Christie’s Inc., 452 Fed.Appx. 63 (2d Cir. 2011) (covenant extends to discretionary actions in contracts)
- Smith v. McDonald, 562 F.Supp. 829 (M.D.N.C. 1983) (judgment on pleadings standards in contract cases)
- Med-Trans Corp. v. Benton, 581 F.Supp.2d 721 (E.D.N.C. 2008) (pleadings stage; factual disputes preclude dismissal)