Last week, I wrote about fiduciary relationships in the context of Scott Boras and Jayson Werth, citing the seminal case of Detroit Lions v. Argovitz as a model to better understand an agent’s responsibilities to his client. (If you didn’t read that piece, you should, because it’s the prerequisite for everything which follows.)
Anyway, a number of commenters asked me to look at a slightly different configuration of the sports-agent fiduciary problem: what happens when an agent potentially has a conflict of interest which results from representing more than one player?
Before we answer, a few caveats. First, we are not analyzing actual situations here. This is not a guide on how to avoid disciplinary action by your state’s bar or your league’s player union. Second, this is a bird’s-eye view from about 50,000 feet, which is to say that we are oversimplifying things greatly. There is a lot more to it than what you see here, but submitting 20,000 words to my editor on conflicts of interest in fiduciary relationships (which is surprisingly possible) would likely draw his ire. Third, this is a broad overview based on American law. This is actually an international issue, which means that Canada and Australia, for example, have different rules. Finally, please don’t start a sports agency based on what you see here.
Now, moving on. There’s a couple of different ways to analyze the question posed above. On the surface, it may seem that having a multiple clients is not, in and of itself, a conflict of interest. And while that’s frequently the case, remember that a fiduciary owes a duty of loyalty to the beneficiary — to the exclusion of everyone else. As attorney Robert Kutcher explains,
Whenever one party places trust and confidence in a second person with that second person’s knowledge, it is possible that a fiduciary relationship is created. Such a relationship imposes on the fiduciary the duty to act in the best interest of the person who has placed his or her trust and confidence in the fiduciary. As a result, the fiduciary may not simply deal with that party at arm’s length, guided only by the morals of the marketplace.
It’s also possible to go to the other extreme. Since sports agents are fiduciaries, you could also argue that taking on more than one client is an inherent conflict of interest, because every minute dedicated to one player’s case is a minute not dedicated to another’s, to whom a fiduciary duty is owed. But that can’t be right either, because Scott Boras, for instance, has lots of clients. Most agents have multiple clients.
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