Category: maritime law

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A Sailor’s Salary: $300,000, If He Works for Larry Ellison

Lawsuit sheds light on America’s Cup spending by Oracle founder

Oracle Team USA during the 2013 America's Cup, which it won in a dramatic comeback.
Oracle Team USA during the 2013 America’s Cup, which it won in a dramatic comeback. PHOTO: GETTY IMAGES
By

STU WOO and
AARON KURILOFF

A lawsuit against Larry Ellison ’s sailing squad, which has led to the seizure of one of his million-dollar boats, is also revealing how much the Oracle Corp. founder is willing to spend to win the America’s Cup: $300,000 a year for a rank-and-file sailor.

The litigation is the latest in a series of legal battles that have surrounded the billionaire’s sailing successes.

On Monday morning, two federal marshals walked into the San Francisco waterfront base of the sailing squad, Oracle Team USA, and seized three gray, whale-size containers holding the disassembled parts of a 45-foot-long, seven-story-tall yacht called an AC45, according to the plaintiff’s lawyer and a U.S. Marshals spokesman.

The marshals tagged the three containers, which can’t be moved until a judge issues a ruling on the seizure or allows the team to post a bond on the boat. The vessel, a smaller version of Oracle’s victorious 72-foot-long boat in the 2013 America’s Cup, is being held as a lien, or collateral, in the case. The plaintiff asked for the seizure.

The plaintiff is Joe Spooner, who spent a decade as an Oracle sailor until the team dismissed him in January. A 41-year-old New Zealand native, Spooner in February sued the team for $725,000 in wages over a 2½-year span, as well as double-wage penalties, punitive damages and legal fees, alleging the squad wrongfully discharged him without cause.

Larry Ellison in September 2013 after winning the America’s Cup.Larry Ellison in September 2013 after winning the America’s Cup. PHOTO: REUTERS

A team Oracle spokesman declined to comment, citing pending litigation. A spokeswoman for Ellison, who is Oracle Corp.’s executive chairman, also declined to comment.

“It is a match race and Spooner has the lead at the first mark!!!!!” Patricia Barlow, Spooner’s lawyer, said in a statement shortly after Monday’s arrest of the Oracle yacht. A match race is a head-to-head contest between two competitors.

Court filings show that Spooner signed a contract with the Oracle team that would have paid him $25,000 a month, which equates to $300,000 a year, from July 2014 to the end of the next America’s Cup, the world’s most prestigious yacht race, which is scheduled to be held in Bermuda in 2017.

In Spooner’s termination letter, team Oracle general manager Grant Simmer said Spooner asked for raise to $38,000 a month to relocate from San Francisco to Bermuda. Simmer said in the letter that the team wasn’t prepared to modify the squad’s relocation policy specifically for Spooner, and that the team also declined to increase his pay.

“For these reasons, and in the light of the stated position that you will not otherwise relocate to Bermuda, this letter constitutes prior written notice of termination” of Spooner’s contract, Simmer wrote.

Spooner was one of six grinders on the 11-man Oracle team that won the 2013 America’s Cup. In sailing, grinders are the equivalent of football offensive linemen, cranking hand-powered winches to power a boat’s hydraulics system. They are typically the lowest-paid members of a sailing team; the people who adjust the sails and helm the wheel can get paid double, or even more.

Larry Ellison, center, congratulates members of Oracle Team USA after winning the America’s Cup.
Larry Ellison, center, congratulates members of Oracle Team USA after winning the America’s Cup. PHOTO: REUTERS

Oracle is the world’s top sailing squad, having won the past two America’s Cup contests, and Ellison has spent lavishly to retain the world’s best yachtsmen. The managing director of Emirates Team New Zealand, the runner-up in the 2013 Cup, has estimated that his sailors got paid half as much as Oracle’s, an appraisal that other sailing experts this week said sounded accurate.

Ellison spent at least $115 million overall on his team’s 2013 America’s Cup campaign, the Oracle team’s chief executive has said.

During Ellison’s recent Cup victories, his lawyers have taken the field almost as often as his sailors. He first captured the 2010 Cup after a 2½-year legal battle over the competition’s rules. Among other accusations, the Swiss team Alinghi alleged it caught a man who was hired by Ellison’s crew to spy on Alinghi operations. An Oracle spokesman said at the time that those were trumped-up allegations that had nothing to do with the legal matter at hand.

Another team Oracle grinder, Matt Mitchell, has sued the team for $68,000 in legal fees that he said he accumulated while fighting allegations that he helped alter an Oracle racing boat in preliminary competition before the 2013 Cup. An Oracle team spokesman declined to comment.

An international jury had concluded that Oracle was guilty of making illegal modifications to the boat and forced the team to start the first-to-nine-wins 2013 Cup races with negative-two victories. On the brink of defeat, Oracle ended up winning the final eight races of the 2013 contest to stage one of the most dramatic comebacks in sports history.

AMERICA’S CUP AND MARITIME LAW

AC45

Marshals seize America’s Cup champ’s boat in contract spat

(March 9, 2015) – Federal marshals seized America’s Cup champion Oracle Team USA’s prototype boat in San Francisco on Monday, before it could be shipped out of the country, in response to a lien filed by a fired sailor. Marshals went to the team’s base at Pier 80 and determined that the souped-up, 45-foot catamaran and its various components and wing sail were in three shipping containers the team was preparing to send to Bermuda.

Marshals Service spokesman Frank Conroy said the containers were stickered and locked. In maritime law terms, the boat was arrested. Conroy said marshals believe the confiscated boat is the catamaran known as 4 Oracle Team USA. He said marshals had a “very pleasant exchange” with syndicate members. “We didn’t get the feeling of anyone trying to hide anything from us,” Conroy said.

In a filing Friday, Oracle attorney David E. Russo said the boat that fired sailor Joe Spooner wants confiscated to satisfy the lien was sold to a French syndicate in December. However, a photo taken shortly after Team France took possession of that boat shows it has hull No. 5. The boat sought by Spooner has the hull No. 4.

In an earlier filing, Oracle contended boat No. 4 hadn’t been launched during Spooner’s tenure with the team. Oracle argued that the boat was mismarked and although it said 4 on the hull, it was actually boat No. 5. Spooner provided evidence showing him sailing and repairing the vessel in question.

The dispute will return to federal court, where Spooner is seeking at least $725,000 in a wrongful termination suit. “It is a match race and we have the lead at the first mark,” Spooner’s attorney, Patricia Barlow, said in an email to The Associated Press.

The catamaran was built to foil, or ride up on hydrofoils once it reaches a certain speed. Oracle tested the boat on San Francisco Bay in February as it prepares to build a 62-foot catamaran that will be used to defend the America’s Cup in 2017 in Bermuda. Foiling 72-foot catamarans were used in the America’s Cup in 2013, when Oracle Team USA rallied from an 8-1 deficit to win eight straight races and defeat Emirates Team New Zealand.

Spooner, a New Zealander, sued Oracle Team USA last month, saying his contract for $25,000 a month was terminated without cause in January. He was a grinder with Oracle Team USA during its America’s Cup victories in 2010 and 2013.

Chief Magistrate Joseph Spero denied Spooner’s initial complaint on Feb. 23, but said he could file an amended complaint. Barlow filed an amended complaint Friday and clerk Richard Wieking issued a warrant later that day. Barlow said Spooner had obtained a visa that required him to be working under a fixed-term contract, and that Oracle argued that the sailor had an at-will contract.

Besides the visa issue, Spooner’s complaint alleges that Oracle Team USA retaliated against him for asking if his monthly salary could be raised to $38,000 to cover the expense of relocating his family from New Zealand to Bermuda. Spooner was offered a $4,000 a month relocation housing allowance, but said it would cost around $7,500 a month for suitable housing for his family, as well as other expenses to live on the island for the America’s Cup cycle.

Oracle Team USA is owned by software billionaire Larry Ellison, who is not named in Spooner’s suit. Marshals said this was the second time an America’s Cup catamaran was “arrested” in San Francisco. In 2012, marshals seized a French team’s cat during a dispute over a salvage claim after the boat broke free from its mooring.