Employment & Labor Insider

EDITOR’S NOTE: A version of this article was previously published on Forbes.com.

Last week, the Major League Baseball Players Association decertified long-time agent Jim Murray for at least four years for having communicated sensitive information to Major League Baseball during the contentious labor negotiations in 2020 amid the COVID-19 pandemic.  

The case is a lesson in understanding the multiple layers of obligations that sports agents have and the punishment that can result from failing to abide by those obligations.

Unions and agent regulation

Mr. Murray is a prominent agent, having previously worked at WME Sports and Excel Sports Management, two major firms, and having represented Ian Happ, Adam Ottavino, Anthony Volpe, and Andy Pettitte in his career.

To understand Mr. Murray’s transgression, it is important to first understand the authority of the Players Association over him.

Under the National Labor Relations Act, a union is “the exclusive representative of all of the employees in [the employee] unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment.” In other words, both employees and employers are prohibited from negotiating the terms of an employee’s employment without the involvement or permission of the union.

In professional sports, the union’s exclusive authority under the NLRA means, for example, that the MLB Players Association has the right to negotiate all of the contracts of the approximate 800 players on MLB rosters. Such a workload is impractical, so the Players Association and the other unions in professional sports effectively delegate some of that negotiating authority to agents under a certification process.

In their collective bargaining agreement, MLB and the Players Association negotiate provisions relating to player employment, including minimum salaries, the terms of the uniform player contract, dispute resolution, benefits, work schedules, and more. But there is still a considerable amount of room left for negotiation between the individual player and his agent, on the one hand, and the team, on the other. Typically, these individual negotiations pertain to the player’s annual salary and the length of his contract.

The union certification process varies across the unions but generally requires an extensive background check, sometimes an exam, and the agreement to abide by the union’s agent regulations. The regulations are extensive and intended to ensure that agents represent players competently, zealously, and ethically. The unions’ authority is further cemented as part of the collective bargaining agreements, in which the teams agree not to negotiate player contracts with agents who have not been certified by the relevant union.

Agent of whom?

The common understanding of the word “agent,” as in a sports agent, is one who acts as a representative of an athlete in negotiating with a team or for endorsement deals. This understanding is consistent with agency law, in which someone (an agent) is authorized to act for, or in place of, another (the principal). 

Importantly, an agent has a fiduciary obligation to the principal, which means that the agent must look out for the principal’s best interests and avoid conflicts of interest.

Yet, a sports agent is also an agent of the union that certified him or her. As described above, the agent’s authority comes from the union because of the authority granted to the union under the NLRA. Sports agents exist only because the unions believe them to be desirable in carrying out the union’s purpose, which is to represent and protect their members’ interests with regard to the terms and conditions of employment.

To this end, the regulations of both the MLB Players Association and the National Football League Players Association declare that agents have fiduciary obligations on behalf of players in general. In other words, those obligations are not limited to the agents’ individual clients.

Agency in practice

Mr. Murray is not the first agent to run afoul of these broader obligations.

In 1967, hockey agent Alan Eagleson helped form the National Hockey League Players Association and was its first Executive Director. During approximately the next 25 years, in both official and unofficial roles, Mr. Eagleson become one of the most powerful figures in hockey, engaging in various business ventures while also representing NHL players. Mr. Eagleson maintained strong relationships with many NHL club owners and rebuffed players’ insistence on free agency rights and more aggressive negotiations with the NHL. Eventually, Mr. Eagleson was forced out of the Players Association amid increasing complaints that he was too friendly with the NHL owners and that he had violated his duties to the players in various other ways. In 1998, he was convicted of crimes related to embezzling union funds, among other misconduct, and served a short prison sentence.

In 2004, the NFL Players Association suspended agent Neil Cornrich for one year after he testified as an expert witness on behalf of General Motors in a wrongful death lawsuit brought by the estate of former Kansas City Chiefs linebacker Derrick Thomas. Mr. Cornrich was paid $1,000 per hour as an expert witness for GM to testify regarding the earnings potential of an NFL player if GM were found liable. GM prevailed at trial, making the damages issue moot, but an arbitrator ruled that Mr. Cornrich had violated his obligations to the union and all of its members by testifying in a capacity that was adverse to an NFL player.

All of which brings us back to Jim Murray. In Mr. Murray’s case, according to The Athletic, he is alleged to have “revealed confidential union information to the league office and helped MLB craft proposals as the union and commissioner’s office fought over” how to play the 2020 season amid the COVID-19 pandemic. Text messages show Mr. Murray in regular contact with MLB Commissioner Rob Manfred and his deputies during contentious negotiations, and providing them with advice and information.

Mr. Murray may have thought he was advancing players’ interests by working toward a resolution of the labor dispute, but he clearly violated his obligations to the Players Association and the players by assisting MLB, their adversary in negotiations. Mr. Murray agreed to the four-year suspension rather than being permanently decertified and agreed to pay a $100,000 fine and a $150,000 application fee should he wish to be recertified.

Mr. Murray’s violations are among the many that pervade the sports agency business. The discipline of Mr. Murray comes about a year after the MLB Players Association decertified agents associated with the rapper Bad Bunny and defended its authority and process in federal court. Meanwhile, NFL agents are still waiting for discipline to be imposed on agent Todd France after multiple rounds of litigation and arbitration indicated that he allegedly stole a rival agent’s client and then lied about it.