## Facts

- William John Cunningham, a professional basketball player, was under contract with the NBA’s Philadelphia 76ers, including a reserve/option clause for a subsequent season.
- While Cunningham remained under that arrangement, the Carolina Cougars (an ABA team) negotiated with him knowing of the 76ers contract and option rights.
- On August 5, 1969, Cunningham signed ABA player contracts with the Cougars for three seasons beginning October 2, 1971 (after the relevant 76ers option period).
- The Cougars later underwent a franchise ownership transfer; The Munchak Corporation and RDG Corporation acquired the franchise assets, including Cunningham’s ABA contracts, and became the enforcing parties.
- Cunningham did not report to play for the Cougars and sought to play professional basketball for another team.
- The franchise owners sued for injunctive relief to prevent Cunningham from playing for any team other than the Cougars during the contract term, alleging his services were unique and damages were inadequate.

## Issues

1. Whether the franchise owners were barred from equitable relief by unclean hands based on negotiating with Cunningham while he was under an existing contract and option/reserve clause with another team.
2. Whether alleged breaches by the franchise owners were material enough to justify denying injunctive relief.
3. Whether Cunningham’s ABA player contract was assignable so that successor franchise owners could enforce it.
4. Whether a negative injunction is an appropriate remedy for breach of a professional athlete’s personal-services contract.

## Decision

- The Fourth Circuit reversed the district court’s denial of injunctive relief and remanded with instructions to enter an injunction.
- The court held the owners’ conduct did not amount to unclean hands sufficient to bar equity, because the ABA contract term began after the prior team’s option period and the conduct was not so wrongful as to forfeit enforcement.
- The court held any breach by the owners was too insubstantial to justify denying an injunction.
- The court rejected Cunningham’s nonassignability argument and permitted enforcement by the successor owners.
- The court directed entry of a negative injunction restraining Cunningham from playing for any professional basketball team other than the Cougars for the duration of his contract.

## Legal Principles

- Courts may enforce a personal-services contract for a uniquely skilled athlete through a negative injunction barring performance for competitors when legal damages are inadequate, even though courts will not compel affirmative performance.
- The equitable defense of unclean hands does not automatically apply merely because a team negotiated a later-starting contract with a player who was then under contract elsewhere; the conduct must be sufficiently wrongful and connected to the relief sought.
- Minor or technical breaches by a party seeking equitable enforcement do not necessarily bar injunctive relief; denial requires a breach substantial enough to make equitable enforcement unjust.
- Professional sports player contracts may be assignable with the sale of a franchise absent a contractual or legal bar, allowing successor owners to enforce the player’s obligations.

## Conclusion

The Fourth Circuit required enforcement of the ABA player contract by negative injunction, concluding that the player’s unique services justified equitable relief and that unclean-hands, material-breach, and nonassignability defenses did not defeat enforcement by successor franchise owners.


Munchak Corp. v. Cunningham, 457 F.2d 721 (4th Cir. 1972)