Brazilian labor court rules against Fluxo in case brought by coach Gafone

A Brazilian labor court has found that a League of Legends coach was an employee of Fluxo for seven weeks in 2024, even though no employment contract was ever signed. Sheep Esports reported on Thursday, August 13, 2026, that the ruling in the case brought by the coach Gafone had been upheld on appeal, and that Fluxo has been ordered to pay him compensation.

The decision came in two steps. The 34th Labor Court of São Paulo ruled first. Fluxo appealed to the Regional Labor Court of the 2nd Region, known in Brazil as TRT-2, which rejected the appeal and kept the first decision in place, according to Sheep Esports, which obtained access to the ruling.

The case is about a hiring that never became official. The courts recognized an employment relationship running from October 14 to December 2, 2024, the period in which Gafone worked on Fluxo's League of Legends project for the following season.

Sheep Esports, August 13, 2026, reporting the decisions of the 34th Labor Court of São Paulo and TRT-2; the seven weeks run from October 14 to December 2, 2024.

What the two courts decided

Gafone asked the court for several things at once, Sheep Esports reported. He wanted the employment relationship recognized, the payments a worker is owed when a job ends, deposits to the FGTS, which the outlet describes as Brazil's mandatory severance fund, and the fine set by Article 477 of the Consolidation of Labor Laws, the code of Brazilian employment law usually shortened to CLT. He also sought moral damages, and the ruling covered compensation for lost profits, which Fluxo later asked the appeal court to overturn.

The first-instance court granted most of it. It recognized the employment relationship and set the compensation provisionally at about US$48,000, plus US$960 in court costs, the outlet reported. The figures are given in US dollars in the Sheep Esports report.

On appeal, Fluxo asked the regional court to overturn the recognition of employment, the labor payments and the compensation for lost profits. TRT-2 rejected the appeal and upheld the first decision, according to the same report.

The ruling did not go Gafone's way on every point. His claim for moral damages was rejected. Sheep Esports writes that the court considered the frustrated contract and the material losses already covered by the financial award, and found no evidence of harm to his honor or image.

An offer made while he coached KaBuM

The story begins in October 2024. Gafone was the coach of KaBuM at the time, Sheep Esports writes, when Fluxo approached him about joining its League of Legends project for 2025.

According to the lawsuit, as the outlet reports it, Fluxo's manager at the time presented the proposal on October 14, 2024. It included access to the team's budget and pay of up to R$17,000 a month. A draft contract was also reportedly sent to the coach.

What followed was work, not only talks, according to the lawsuit and the testimony the outlet describes. Gafone took part in tryouts, the trial sessions in which a team tests the players it might sign, in building the roster and in evaluating players.

The two sides read that period differently. Fluxo argued in court that the parties had only been negotiating a possible hire and denied that Gafone had ever become its employee, Sheep Esports reported. The courts did not accept that reading.

December 2: the relationship ends

The relationship between the two sides ended on December 2, 2024, according to the report. Gafone's claim is that Fluxo used his work and then ended the project, leaving him unable to join another team. That date became the last day of the employment relationship the courts recognized.

The timing mattered to the decision. Testimony accepted by the court said the scene's transfer window ran from November to early December, so that signings outside it were practically impossible except in exceptional circumstances, Sheep Esports writes. The transfer window is the period in which teams sign players and staff for the coming season. The first-instance court found that the hiring process, after Gafone left KaBuM, prevented him from finding a new position at the same level.

Those circumstances, the same court found, amounted to a breach of the principle of objective good faith, according to the outlet.

The four elements the court found

The core of the ruling is the finding that an employment relationship existed without any formal paperwork. Sheep Esports reports that the court found four elements: subordination, personal service, compensation and non-occasional work.

Those elements come from the definition of an employee in the CLT itself. The code dates from 1943: it was enacted as Decree-Law 5,452 and published in Brazil's official gazette on August 9 of that year,. Article 3 of the code, in the text published by the Brazilian presidency, defines an employee as any natural person who provides services of a non-occasional nature to an employer, under that employer's dependence and in return for a wage. Article 2 defines the employer as the company, individual or collective, that takes on the risks of the economic activity.

Read side by side, the four findings track the words of that article: personal service for the natural person who does the work, non-occasional work for its regular nature, subordination for the employer's direction, and compensation for the wage. The court found each of them in the seven weeks Gafone spent on the project.

On appeal, TRT-2 made the same point in general terms. According to Sheep Esports, the regional court held that the absence of a formal employment registration does not prevent an employment relationship from being recognized, as long as the necessary elements are present.

The registration it refers to is a specific step in Brazilian law. Article 29 of the CLT, in the wording set by Law 13,874 of 2019, gives an employer five working days to record a newly hired worker in the CTPS, the work and social security card that documents a person's jobs. The regional court's holding, as Sheep Esports reports it, is that a missing record does not stand in the way once the four elements have been shown.

What was granted and what was refused

The decision covers several claims, and they did not all end the same way. The table sets out each one as Sheep Esports reports it.

The figure the court used as a base salary, US$2,305, is the reference for the calculation, the outlet writes. The offer described in the lawsuit, up to R$17,000 a month, is stated in Brazilian reais. The report gives the first in US dollars and the second in Brazilian reais, and it does not set one against the other.

An amount still to be set

The US$48,000 figure is not final. Sheep Esports reports that the exact amount will be determined in the liquidation phase, the stage of a Brazilian labor case in which the sums owed under a decision are calculated.

Several points remain outside the published account. The report does not give the dates on which the 34th Labor Court and TRT-2 issued their decisions, and it names neither judge. It does not say whether Fluxo intends to take the case further, and it quotes no public statement from Fluxo or from Gafone.

The two courts sit at different levels of the system. The 34th Labor Court of São Paulo is a first-instance court, where the case was heard and decided first. TRT-2 is the regional labor court that heard Fluxo's appeal against that decision and confirmed it.

Where a written contract is the rule

The Brazilian decision rests on the facts of the work. France, by contrast, has written the paperwork into a law made for esports players specifically.

The French rules, set out by the Directorate General for Enterprises of the French Ministry of the Economy on a page published on November 15, 2024, apply only to salaried players employed by approved teams: companies or associations whose purpose is to take part in video game competitions and that hold an approval from the minister in charge of digital affairs. The page does not mention coaches. They are a different system from the Brazilian one, and nothing in them applies to a case decided in São Paulo.

The two systems arrive at a similar place by different roads. The French text sanctions a contract that does not meet the required form. The Brazilian ruling, as Sheep Esports reports it, looked past the missing contract and the missing registration to the work that had been done, and treated it as a job.

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