There are numerous occupations that have developed to include professional agents to negotiate contracts and generally represent someone’s interests in their working relationships. These include athletes, musicians, actors, writers and others.
The legal relationships between entertainers and their agents have become extremely complex over the years, especially as the money involved in sports and entertainment has expanded so significantly.
A recent case
According to Sports Illustrated online, Nicks player Nerlens Noel brought a lawsuit against agent Rich Paul in August of 2021.
The lawsuit alleges that Paul gave him bad counsel regarding his contract with NBA’s Dallas Mavericks, and then was disengaged in representing him. Specifically, Paul advised Noel to cease negotiating his free agent contract with the Mavericks, when he was seeking to be among the highest players. Noel ended up accepting a much lower, one-year contract, and then his agent allegedly offered no specific plans for obtaining a better long-term deal.
Fiduciary duty
A sports or entertainment agent, whether this person is a lawyer or not, is a fiduciary who must always act in the best interest of the principal.
Some examples of fiduciary breach can include:
- Violating promises: If an agent lies to a client or violates clauses in contractual agreements, this could be a breach of fiduciary duty.
- Fraud, theft or embezzlement: Obviously, white collar theft crimes committed against the athlete or entertainer an agent is representing creates a clear breach of fiduciary duty.
- Bad counsel: When an agent gives a client professional career advise that does not turn out to be in the client’s best interest, it could be a case of fiduciary breach.
- Missing opportunities: If an agent is not “on the ball” in returning calls to potential sponsors, teams, record companies, movie studios and the like, or if the agent simply fails to recognize available opportunities, it could be a result of breach.
The last two items on the list represent a gray area.
Navigating the gray areas of fiduciary breach
While violating a clear written clause in a contract or instances of theft are obvious violations of breach, the others are not as clear.
Take an instance of bad counsel in negotiating a contract, as in the Noel-Paul lawsuit. Professional sports and entertainment contracts exist in a very speculative, unstable market. There is no real way to know how good of a contract a team might be willing to give a player. Similarly, negotiating tactics vary and there’s no way to know what might be successful.
It is difficult to determine when a poor outcome is unavoidable and when it represents breach on the part of the agent, because not every poor outcome rises to the level of fiduciary breach. It is important to work with an experienced attorney who understands the legal landscape of sports and entertainment representation, to determine whether you have a case.