By Darren Heitner
(The following is an analysis by Darren Heiter, who has written extensively on the sports agent industry, of a recent arbitrator decision involving an agent and the athlete he represented. Heiter is the CEO of Dynasty Athlete Representation (www.dynastyreps.com).)
It is tough to find anybody in the sports agent profession who has not talked about Howard Beck’s New York Times story titled, “Tampering Leads to Rare Penalty Against Agent.” It is not such a hot topic because someone was actually convinced that an agent knowingly recruited another agent’s client. It was newsworthy because an arbitrator with authority decided that something should be done about it, and ordered Andy Miller to pay Keith Glass $40,000 in damages.
The amount of damages is not even all that important. What is important is that any guilt was proven, and that action was taken against an agent for stealing another agent’s client.
Some in the industry would call it “competition,” and claim that this type of ruling could create a slippery slope where even ethical recruiting practices are punished with the levying of damages. The worry is that this type of decision might open the floodgates for every disgruntled agent who has ever lost a player. No one wants to chill the open market of agents and players who switch agents for a variety of proper reasons. Others are extremely happy that justice might finally be served on those who ignore rules, regulations, and laws.
Will this decision set a precedent, or will it be a blip in the standard unregulated practice of agents stealing clients from one another? As Gabe Feldman points out in the Times article,
It’s rare for an agent to successfully sue another agent for client-poaching, or tampering, or tortious interference, or whatever you want to call it.
And the penalty levied on Andy Miller might also be a rarity, since he was an easier target as someone who has had to pay $4.6 million to his former employer after he took 16 clients with him when he left the firm.
Keith Glass overcame a burden to persuade the arbitrator that Andy Miller tortiously interfered with Glass’ client, a burden that is usually so difficult to overcome that many agents who feel that they have a claim prefer to not to bring their cases to court/arbitration.
The tortious interference claim, also known as an interfering with contractual relations claim, is something that I have written about extensively on SportsAgentBlog.com in the past. A recent case that caught my eye was Athletes Premier International, Inc. v. Hendricks Sports Management. High profile Cincinnati Reds pitcher Aroldis Chapman switched from API to Hendricks, and API immediately raised the idea that Hendricks tortiously interfered with API’s representation of Chapman. While most claims get settled before they ever make it to trial, some people were surprised that Hendricks settled with API for an undisclosed amount of money. They figured that based on never hearing about a plaintiff winning such a case in the world of athlete representation, Hendricks would be able to fight it and probably come out of it unscathed. After reading about the Keith Glass v. Andy Miller arbitration results, it looks like Hendricks might have made a prudent decision to settle.
The following are must reads if you wish to be brought up to speed on the interference with contractual relations discussion that occurred on SportsAgentBlog.com in the past: Sports Agents Interfering With Contractual Relations, Digging Deeper Into The Contractual Interference Claim, and The Interference With Contractual Relations Conversation Continues. I have gone through the three posts and scrapped out the essential elements that may have been applied by the arbitrator in the Glass v. Miller case.
If you have a legal contract with your client and the rival agent is the cause of your client breaking your contract, you may have a claim. Your client need not even sign with the rival agent who caused the split. You need to prove that the agent caused the interference, and it helps to show that the agent had a bad motive and interests adverse to yours (easy to show if he is a rival). But it is not enough if you aim to show that the rival agent signed the player after your client broke your contract.
A terminable at will contract may be terminated at the will of an athlete, but that still should not preclude an action based on interference with contractual relations, since that claim is based on the actions of a third party to the contract, not the athlete’s actions alone. In this type of case, but for the third party’s interference, the athlete presumably would not have terminated the agency contract.
Interference with a contract that is terminable at will, such as an employment contract, is actionable since such a contract, until it is terminated, is of value to the plaintiff and presumably will continue to be in effect.
Knowledge by the defendant of the existence of the plaintiff’s contract with another is a prerequisite to liability for interfering with the agreement. Furthermore, the cases almost uniformly require that the plaintiff show actual knowledge of the agreement by the defendant before the defendant will be held liable for interference.
