May 27, 2013
In this second post on e-discovery in league sports, we look specifically at the relationship between players and agents and how the fiduciary duty affect discovery.
The player and his agent
A sports agent owes a fiduciary duty 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 acknowledged in the contract between player and agent.
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 litigation’s 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 may choose to sanction the player for failing to institute litigation holds. The player may then sue the agent for breaching its fiduciary duty – a claim that includes the possibility of punitive damages.
An agent cannot waive his or her fiduciary duty, but can lessen exposure by following two guidelines. First, both the agent and the player should be aware that documents and information in the agent’s possession are discoverable in litigation involving the player. A player should include current and former agents in any litigation hold. The agent should enforce the litigation hold.
Second, the agent should inform his or her clients in writing that their duty to preserve information may extend to information in the agent’s possession. The agent should then provide clients with a document preservation and destruction policy for their records. 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.