E-Discovery in League Sports (Part 2 of 4)

E-Discovery in League Sports — Players and Agents

by Daniel B. Garrie the  Senior Managing Partner  at Law & Forensics LLC. He focuses on e-discovery, digital forensics, cyber security and warfare, data privacy, and predictive coding working with law firms, governments, companies, and non-profits globally.

Part 2 of 4: In this second installment of this blog series, E-Discovery in League Sports — Players and Agents, we look specifically at relationship between players and agents.

The Player and his Agent.

A sports agent owes a fiduciary duty of undivided loyalty to the player he represents. The agent must “step into the shoes” of the player, and place the player’s interests above his own. This duty is often expressly acknowledged in the contract between player and agent. This language from an NBA Player-Agent contract is fairly typical.

Commencing on the date of this Agreement, the Agent agrees to represent the Player – to the extent requested by the Player – in conducting individual compensation negotiations for the performance of the Player’s services as a professional basketball player with the Player’s NBA club. After a contract with the Players’ club is executed, the Agent agrees to continue to assist, advise and counsel the Player in enforcing his rights under that contract.

In performing these services the Agent is the NBPA’s delegated representative and is acting in a fiduciary capacity on behalf of the Player. In no event shall the Agent have the authority to bind or commit the Player in any manner without the express prior consent of the Player and in no event shall the Agent execute a player contract on behalf of the Player.

This fiduciary duty extends to the documents and information the agency keeps on behalf of its clients, and likely requires an agent to preserve documents related to potential or existing litigations involving both present and former clients. An agent’s failure to preserve those documents, however unintentional, may open the player up to litigation sanctions, and open the agent up to liability, for breaching his or her fiduciary duty as agent to the player.

It is well-settled that, where a principal-agent relationship exists, the principal (here, the player) “controls” any of his information that may be in the physical possession of his agent. Thus, if the agent destroys information under his control, a court or arbitrator may choose to sanction the player for failing to timely institute written litigation holds. The player may then sue the agent for breached its fiduciary duty – a tort/malpractice claim that includes the possibility of punitive damages.

An agent cannot waive its fiduciary duty, but it can lessen its exposure and protect its clients. First, both the agent and the player should be aware that relevant documents and information in the agent’s possession are potentially discoverable in any litigation involving the player. A player should include agents and former agents in any litigation hold, and an agent should enforce the litigation hold.

Second, the agent should proactively inform its clients in writing that the client’s duty to preserve information as part of a legal dispute may extend to information in the agent’s possession. The agent should then provide its clients with a copy of the agents’ usual and customary document preservation and destruction policy. For example, if the agent has a policy of destroying all emails older than six months, or destroying all information older than two years, except for tax return information, it should inform its clients, so there are no misunderstandings later. Of course, the agent should strictly adhere to any information retention and destruction policy in the absence of a litigation hold.

By informing clients in advance, the agent fulfills its fiduciary duty to them and protects him or herself in the event a player neglects to timely inform the agent of a legal dispute involving information in the agent’s possession.

The rest of this blog series explores three specific scenarios involving e-discovery in league sports and provides some practice insights. In the next installment I will discuss the legal relationship between players and agents and how this impacts e-discovery