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USPS sues Lance Armstrong, seeks repayment of sponsor dollars

April 25, 2013

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USPS vs. Lance Armstrong: tensions mount

When an organization chooses to publicly sponsor someone in a marketing campaign or for a public event, there is a certain amount of risk involved. If done right, the positive performance and reputation of the person sponsored reflects well on the sponsor; but if the person that they choose violates a rule or law, or does something deemed offensive by the general public, that negativity can hurt a brand’s reputation.

Such is the case brought forth by the United States Postal Service on Tuesday; USPS filed a lawsuit against Lance Armstrong citing that the cyclist was “unjustly enriched” while competing for his Tour de France titles. Government officials decided to move forward with a lawsuit because Armstrong and his teammates knowingly used banned substances, and did so in a way to help avoid detection.

In order to win this argument, the government will have to prove that USPS was defrauded and damaged as a result of Armstrong’s actions.

Lawsuit called “opportunistic”

In the official filed complaint, officials state: “Riders on the USPS-sponsored team, including Armstrong, knowingly caused material violations of the sponsorship agreements by regularly and systematically employing banned substances and methods to enhance their performance,” the complaint says.”

For these reasons, USPS argues that Armstrong and his teammates thereby violate their right to receive payments and benefits associated with the sponsorship. According to the filing, USPS paid Armstrong $17 million beginning in 1998 through 2004. Armstrong’s attorney sees the lawsuit as “opportunistic” and argues that USPS was not defrauded.

Armstrong admitted to using drugs in January, years after his teammate Floyd Landis tested positive for performance enhancers, and both were stripped of their titles. During the years that Armstrong competed in the Tour de France, he was highly revered for his story of triumph and his team was preferable for sponsorship.

The USPS argues that because the cyclists violated completion rules, they should thereby forfeit any payments or benefits obtained as a result of the sponsorship.

Destiny Bennett is a journalist who has earned double communications' degrees in Journalism and Public Relations, as well as a certification in Business from The University of Texas at Austin. She has written stories for AustinWoman Magazine as well as various University of Texas publications and enjoys the art of telling a story. Her interests include finance, technology, social media...and watching HGTV religiously.

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