By Darren Heitner, Chief Vision Officer at HEITNER LEGAL, P.L.L.C.
NBA rookie and former Duke basketball player Zion Williamson is in the middle of two lawsuits that concern his former marketing agents. Those agents want a commission from Williamson’s marketing deals, even after their contract was terminated, based on a claim that Williamson did not have cause to bring the business relationship to an early end.
Williamson’s strongest argument against his former marketing agents’ claims is that the marketing agreement he signed with his former agents is void as a matter of law and that he has no obligation to remit any commissions. Williamson largely bases his argument on a claim that his former agents were not registered as athlete agents in the State of North Carolina at the time that the agency contract was entered into and that, because the agents were not licensed then, as a matter of law under North Carolina’s Uniform Athlete Agents Act the agency contract must then have no legal effect.
A dispute between baseball agent David Sloane and current Seattle Mariners pitcher Justus Sheffield could serve as persuasive precedent on the issue.
In 2014, Sloane and his company Taurus Sports filed a Complaint against Sheffield in Arizona state court. Sloane argued that Sheffield shorted him on the commission that was due on Sheffield’s signing bonus. Sheffield paid sloan a 3% comission on his professional contract and Sloane demanded 5%. The dispute was over a balance of $33,000.
Sloane lost the case because he was not properly licensed under the state’s athlete agent law. Sports lawyer Gregg Clifton represented Sheffield, the prevailing party, in the case.
“The law in Arizona at the time of the Sheffield signing, as in most states that have specific agent laws, was very clear,” said Clifton. “You must be registered with the state in order to work as an agent and any agreement that an agent enters into with an amateur athlete must be in writing and contains very specific, statutorily mandated provisions in order to be enforceable.”
Sloane’s loss contributed to his decision to leave the business of representing professional baseball players. The penalties imposed on him as a byproduct of filing the Complaint in Arizona likely played a role as well.
The State of Tennessee learned about Sloane’s failure to be properly licensed when he signed Sheffield to an agency contract and decided to fine him in the amount of $50,740, which was later reduced to $10,740. All Sloane did was fail to register with the state, and that caused him to lose his case for fees he would have otherwise received from Sheffield. It also would have precluded the State of Tennessee from imposing a fine on him.
Sloane was a Florida-based sports agent, as are the current agents who seek fees from Williamson. Tennessee’s Secretary of State fined Sloane because he did not register before representing a Tennessee prospect. Will North Carolina’s Secretary of State do the same to Williamson’s agents, and will the agents’ fate be the same as Sloane’s in the pending civil litigation?
