League of Legends: Brazilian court ruled against Fluxo in a labor dispute lawsuit filed by Gafone..

Sheep Esports exclusively reported on Wednesday that a Brazilian court ruled against the country's esports club Fluxo in a labor dispute lawsuit filed by League of Legends professional esports coach Gafone.

According to the report, the case involved the determination of an employment relationship, payment of severance benefits, the Brazilian Compulsory Severance Fund (FGTS), and a fine under Article 477 of the Brazilian Labor Code (CLT).

Gafone previously served as a coach for KaBuM before joining Fluxo.

On October 14, 2024, Carlito, then manager of Fluxo, which was then undergoing a merger and restructuring with W7M, reportedly proposed a plan for Gafone to join the 2025 project.

The project granted Gafone access to the team's budget, allowed him to participate in roster building, and discussed a salary of up to 17,000 reais per month.

Fluxo also sent the coach a draft contract at the time.

Following negotiations, Gafone ended his partnership with KaBuM and began working on the formation of Fluxo.

Before the project ended, the coach was involved in tryouts, roster building, player evaluations, and discussions regarding player availability and salary ranges.

Furthermore, Gafone, who had previously signed a contract with KaBuM, left his previous position at the invitation of Fluxo.

This led the court to rule that despite the contractual dispute between Gafone and his former employer, his employment relationship with Fluxo could still be established.

Court documents show that Gafone's partnership with Fluxo ended on December 2, 2024. In the lawsuit, Gafone claimed that Flux used his work to build the project and then terminated it, preventing him from joining other teams at that time.

The labor court considered the timing of the termination particularly important. According to testimony accepted as valid testimony, the esports transfer window runs from November to early December; therefore, unless there were exceptional circumstances, signing a contract outside this period was impossible.

The trial court found that the recruitment process hindered Gafone from finding a new position in the high-level esports scene after he left his previous position as coach at KaBuM. According to the ruling, this violated the principle of objective good faith.

Fluxo argued that the two parties were merely negotiating potential recruitment matters and denied that Gafone had actually become an employee of the organization.

However, the court reached a different conclusion. The ruling recognized the existence of a subordinate relationship, personal service, remuneration, and non-temporary work—elements used in Brazilian labor law to define an employment relationship.

The employment relationship was established between October 14 and December 2, 2024, with Gafone serving as a coach and receiving a basic salary of $2,305, which was used to calculate damages.

The ruling also held that evidence of service provision existed, and that even without formal employment registration, the establishment of an employment relationship should be recognized as long as the necessary elements were met.

Unhappy with the trial court's initial ruling, Fluxo appealed, attempting to overturn the establishment of an employment relationship, the payment of labor-related fees, and damages for lost profits. However, the appeals court ultimately dismissed the appeal and upheld the original judgment.

According to the ruling, Fluxo was ordered to pay $960 in legal costs, calculated based on a provisional amount of approximately $48,000. However, the claim for emotional distress damages was dismissed.

The court found that the damages for impaired contract performance and material losses had been compensated by the economic damages awarded in this case. The court also found no evidence that the League of Legends esports coach's reputation or image had been damaged.

Image source: Internet / Sheep Esports