By: Declan Andersen
In late August, Nerlens Noel filed a lawsuit against Richard “Rich” Paul and the larger agency of Klutch Sports Group, LLC (“Klutch”). Paul is the founder of Klutch, an agency group which rose to prominence through its representation of Lebron James. Noel was drafted 6th out of the University of Kentucky by the New Orleans Pelicans before being traded to the Philadelphia 76ers on draft night. Noel then moved to the Dallas Mavericks and the Oklahoma City Thunder before settling with the New York Knicks. After the 2016/17 season, Noel, a restricted free agent, was approached with an offer from the Dallas Mavericks that would pay him $70 million over the course of 4 years. Noel, who was represented by Happy Walters at the time, was willing to accept the deal until he was convinced by Paul to reject it. Noel was lured by Paul promising that he could ensure Noel a maximum contract, which would require Noel signing a shorter deal. Following a series of events that serve as the basis of this suit, Noel fired Paul in December 2020.
In the complaint, Noel alleges a breach of fiduciary duty, breach of contract, negligence, and gross negligence. Similar to Major League Baseball, the relationship between an NBA player and his agent is governed by a standard-form agreement, which is commonly referred to as a standard player agent contract (“SPAC”). Section 3(B)(12) of the National Basketball Players Association (NBPA) Regulation Governing Player Agents states that an agent is prohibited from “[c]oncealing material facts from any Player whom the Player Agent is representing which relate to the subject of the individual’s contract negotiation.” In the complaint, Noel alleges that during the 2019 offseason, Paul was unresponsive to a potential contract offer from the 76ers organization. Noel only later learned of the 76ers’ interest from a third party, which if true would certainty rise to level of concealment of a material fact by Paul.
Section 2 of the SPAC explicitly states that an agent owes the player a fiduciary duty. One of the duties included under the umbrella of a fiduciary relationship is that of undivided loyalty. While the prototypical example is avoiding an actual conflict of interest, such as representing a player and coach engaged in negotiations, a court may find that Paul breached this duty by failing to provide adequate services to his lower echelon clients. In the complaint Noel alleges that Paul and Klutch “had a history of . . . only focusing on serving their marquee clients.” Assuming that Noel is able to establish this at trial, it would certainly appear as if Paul breached his duty of undivided loyalty, as he was incapable of providing adequate services to all of his clients.
Globally, the professional sports landscape has become dominated by these “super agents.” While this list is not exhaustive, there is Mino Raiola (soccer), Scott Boras (baseball), Drew Rosenhaus (football), and finally Rich Paul (basketball). Of this list, Paul stands out as he is a relative newcomer, largely owing his popularity to his close relationship with Lebron James. The larger impact of this potential lawsuit is two-fold. First, it is a warning shot to other individuals hoping to follow Paul’s path. While Lebron James is a generational talent, it is not difficult to imagine a future NBA star placing his friend in the position to act as his agent. Further, if Noel is successful in this suit, it could lead to future judicial intervention into the largely untouched arena of sports agency.
 Darren Heitner, Nerlens Noel Blasts NBA Agent Rich Paul in New Lawsuit, Sports Agents Blog (Aug. 24, 2021), http://sportsagentblog.com/2021/08/24/nerlens-noel-blasts-nba-agent-rich-paul-in-new-lawsuit/.
 See Isaac Chotiner, Lebron James’s Agent is Transforming the Business of Basketball, The New Yorker (May 31, 2021), https://www.newyorker.com/magazine/2021/06/07/lebron-james-agent-is-transforming-the-business-of-basketball.
 Complaint at 2, Noel v. Paul (Tex. Dist. Aug. 23, 2021) (No. DC-21-11373).
 ESPN, https://www.espn.com/nba/player/bio/_/id/2991280/nerlens-noel (last visited Sept. 12, 2021).
 Complaint at 3.
 Id. at 4.
 Id. at 8.
 Id. at 9, 11.
 George Cohen, Ethics and the Representation of Professional Athletes, 4 Marq. Sports L.J. 149, 152 (1993).
 NBPA Regulations Governing Player Agents §3(B)(12) (2019). Available at https://cosmic-s3.imgix.net/fec8eea0-dbdc-11e9-a097-0b637a5431fa-Agent-Regulations–Final–2019.pdf.
 Complaint at 7.
 Id (stating that Brett Brown, then coach of the 76ers, told Noel that the 76ers’ front office had been trying to reach Noel about a potential contract offer).
 Complaint at 11.
 See Cohen, supra note 11 at 155.
 Complaint at 8.
 Id. (internal quotations omitted).
 Forbes, Mino Raiola, https://www.forbes.com/companies/mino-raiola/?sh=740f6b27dd1c (last visited Sept. 12, 2021).
 Forbes, Scott Boras, https://www.forbes.com/profile/scott-boras/?sh=6281ae736637 (last visited Sept. 12, 2021).
 Forbes, Drew Rosenhaus, https://www.forbes.com/profile/drew-rosenhaus/?sh=fa437a053f17 (last visited Sept. 12, 2021).
 Forbes, Rich Paul, https://www.forbes.com/profile/rich-paul/?sh=6675ce242d97 (last visited Sept. 12, 2021).
 See Chotiner, supra note 3 (stating that “[w]ith James as his star client, Paul has developed tremendous influence in the N.B.A).