The Mets, Brodie Van Wagenen, and When Agents Join Front Offices

According to Joel Sherman and Mark Feinsand, the next general manager of the New York Mets will be agent Brodie Van Wagenen.

Sources: Terms have been agreed to between Brodie Van Wagenen and #Mets. If contract language can be finalized a deal will be completed as early as today for him to be run baseball operations.

— Joel Sherman (@Joelsherman1) October 27, 2018

Van Wagenen, who unlike most sports agents is not an attorney, is part of the sports division of Creative Artists Agency, which represents athletes, actors, and other artists. Van Wagenen, it should be noted, is co-head of CAA Sports, the agency’s athletic representation arm. But Van Wagenen is more than just an ordinary baseball agent; he negotiated Robinson Cano‘s 10-year megadeal with the Seattle Mariners, Ryan Zimmerman’s nine-figure pact with Washington, and Yoenis Cespedes‘ current deal with the Mets. In other words, Van Wagenen represents some of the sport’s biggest stars.

There’s little doubt that Van Wagenen’s experience negotiating some of the sport’s largest contracts gives him a significant amount of experience that will serve him well in his new role. Van Wagenen has also garnered a reputation as one of the most player-friendly voices in the industry, which makes this move perhaps all the more surprising. For instance, during the famously slow 2017-18 offseason, he accused MLB owners of collusion and threatened that players would boycott spring training. He also has demanded trades for players who don’t receive contract extensions.

More from Van Wagenen: “If the Mets don’t share same interest, we believe their best course of action is to seriously consider trade opportunities now.
The inertia of current situation could complicate Jacob’s relationship with the club and creates an atmosphere of indecision.”

— Ken Rosenthal (@Ken_Rosenthal) July 16, 2018

On the surface, it seems as though the addition of a player agent to a major-league front office could represent a boon for the union.

On the other hand, it isn’t Van Wagenen’s experience about which many in the industry are concerned.

Scott Boras is the best. Great quote here. https://t.co/Kcr5mF84xv via @nypostsports

— Andrew Marchand (@AndrewMarchand) October 23, 2018

In which the ?@MLB_PLAYERS? and Scott Boras weigh in on the soon-to-be new GM of the Mets in a less-than-enthused manner.https://t.co/uzohqxk5Bk

— Denis Gorman (@DenisGorman) October 27, 2018

For Scott Boras, the concern is the inevitable conflicts of interest that will arise for an agent who has switched sides to work for a front office.

Scott Boras, the highest-profile agent in baseball, said he has been approached by teams about a similar position and has turned down every opportunity to interview. He said the conflicts of interest could be unavoidable.

“If someone came to my son and made a commitment to him, and said I want to care about your interests, and then he took all that information that my son had given him over time, and then he went to work for a team and used that to negotiate against me, I would be very upset,” Boras told the Los Angeles Times on Friday.

And Tony Clark, head of the Major League Baseball Players Association, voiced similar reservations.

The prospect of the New York Mets hiring agent Brodie Van Wagenen as general manager has alarmed a number of players, according to players’ association executive director Tony Clark.

“I won’t tell you how many calls or how many texts I have gotten,” Clark said Friday before Game 3 of the World Series in Los Angeles. “I will simply suggest to you that our membership is paying attention.”

So let’s examine what Boras and Clark are talking about.

We begin with the rules governing baseball’s player agents. Those Rules are written and enforced by the MLBPA, and essentially exist to protect players and govern agent conduct. Rule 5(B)(12), which defines conflicts of interest, prohibits both actual and potential or apparent conflicts. With regard to what situations are regarded as conflicts of interest, the Rule says this:

§5(B)(12)(b) – Being employed by, or in any capacity representing, or soliciting or accepting money or any thing of value from, or providing or causing money or any thing of value to be provided to Major League Baseball or any of its affiliated entities, any Major or Minor League Club, any other employer of professional baseball players, or any employee or official of them, including scouts or individuals acting in the capacity of a scout, unless previously authorized in writing by the MLBPA to do so in accordance with any specified conditions (e.g., notice to clients, client waivers, etc.);…

Accepting a job offer from a team is almost certainly a per se violation of this Rule. That’s particularly true in Van Wagenen’s case, given the number of Mets players he represents — which is what separates Van Wagenen from Dave Stewart, for example, who was working as an agent before assuming the GM role with Arizona in 2014. Stewart wasn’t directly linked to any D-backs players. Among Van Wagenen’s clients, however, is not only Cespedes but a collection of other Mets, including Jacob deGrom, Todd Frazier, Noah Syndergaard, and Tim Tebow. In other words, unless Van Wagenen got prior permission from the MLBPA, plus also gave notice and received permission in writing from each of his affected clients — all of which is possible but seems unlikely given Tony Clark’s response to the move — he’s in violation of the Rule.

In one sense, such a violation would have little practical consequence for Van Wagenen: the loss of his agent certification wouldn’t have any bearing on his role as general manager. And because he isn’t an attorney, the Rule governing attorney conflicts of interest doesn’t apply. On the other hand, though, it still gives rise to some potential legal problems.

Remember when we discussed player-agent conflicts of interest? Among their duties, player agents owe a fiduciary duty of loyalty to the players they represent — to the exclusion of everyone else. As attorney Robert Kutcher explains,

[w]henever 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.

This relationship prohibits the agent from doing anything against the interests of the players they represent. But it also means that the agent can’t become an agent of an adverse party (like a team) during the course of that representation. For this, we’ll look at a text called the Restatement (Second) of Agency, Section 394, where it says this:

Unless otherwise agreed, an agent is subject to a duty not to act or agree to act during the period of his agency for persons whose interests conflict with those of the principal in matters in which the agent is employed.

For an agent such as Van Wagenen to become the general manager of a club that employs his clients would certainly appear to violate this rule. In theory, if his clients on the Mets don’t sign off on the addition of Van Wagenen to the front office, they have a legal right to stop it — and they stand a good chance of winning whatever suit they file.

Under a case called Detroit Lions v. Argovitz, a breach of an agent’s fiduciary duty can actually result in rescission (a court undoing) of the acts that breached the duty. An agent’s fiduciary duty under Argovitz is multifaceted. First, the agent can’t have a conflict of interest; in other words, if Scott Boras was a part-owner of the Yankees, any contract to which he agreed with the Steinbrenners or Brian Cashman would be presumptively fraudulent and voidable by the player on whose behalf he was acting. Second, even if the agent reaches a deal that is fair to the player, if he fails to place the player’s best interests first as defined by the player, the contract is presumptively fraudulent and voidable by the player.

From Argovitz:

The question, therefore, does not relate to the mala fides [bad intent] of the agent nor to whether or not a greater sum might have been procured for the property, nor even to whether or not the vendor received full value therefor. The self-interest of the agent is considered a vice which renders the transaction voidable at the election of the principal without looking into the matter further than to ascertain that the interest of the agent exists.

Remember that an agent knows a player’s motivations, salary expectations, and health status better than the team does. That’s to be expected: you don’t tell your employer what your bottom-line figure is when you’re negotiating a salary. Van Wagenen now brings all that information to his new role, where he can theoretically use it to his former clients’ detriment. So even if Van Wagenen has no ill intent at all, he still likely breached his fiduciary duty merely by interviewing for the Mets’ job.

And arguably, the Mets committed unlawful acts, too. The law prohibits a third party from inducing a party to a contract into breaching that contract. That’s called “tortious interference with contract” or “tortious interference with prospective economic advantage.” (They’re technically different causes of action, but they’re close enough for our purposes that we can consider them together.) Here, the Mets knew Van Wagenen had a contract with his clients and made him a job offer anyway that would require him to breach that contract.

Now, you might be wondering how the Mets can induce Van Wagenen to breach a contract with his clients if that contract is terminable at will; after all, a player can generally fire an agent at any time. But this isn’t an ordinary agency contract: agents are fiduciaries, and that adds an additional layer of protection. Just because a player can leave an agent doesn’t mean the agent has equal right to leave the player.

In other words, the Mets are potentially liable for something lawyers call “culpable participation.” As a Texas court explained in a case called Rhymes v. Filter Resources Inc., “When a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such.” This is the majority rule across most jurisdictions.

It’s possible, of course, that Van Wagenen did cover his tracks here. Maybe he and CAA obtained signed informed consent waivers from all of his clients. Maybe the MLBPA signed off on this beforehand, though that seems unlikely given Clark’s comments. And even if he didn’t, New York has a heightened pleading standard for tortious interference claims that may well insulate the Mets, aside from the labor-law preemption issues blocking any player from suing a team. And yet, despite all that, it’s really hard to say that Van Wagenen becoming a front-office executive is legally kosher. Whether Van Wagenen’s clients elect to do anything about it is another matter.