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Boras loses grievance claim against Beltran

Posted by: Chad Jennings - Posted in Misc on Mar 27, 2014 Print This Post Print This Post | Email This Post Email This Post

From my Gannett colleagues Bob Nightengale and Jorge Ortiz over at USA Today: new Yankees right fielder Carlos Beltran won a grievance case filed by his former agent, Scott Boras. It could set precedent that impacts the player/agent relationship going forward. Here’s the story from Bob and Jorge.

Carlos BeltranPowerful agent Scott Boras lost a $1.3 million grievance claim against New York Yankees right fielder Carlos Beltran this month, establishing a precedent that Boras believes could have serious ramifications in the industry.

Boras was seeking damages against Beltran, who left his agency in October 2011 – four months before the expiration of his contract. Beltran signed a two-year, $26 million contract with the St. Louis Cardinals in December 2011, before receiving a three-year, $45 million contract this winter from the Yankees. Boras was seeking 5% of Beltran’s contract with St. Louis, citing a provision in their agreement that required payment if he prematurely terminated him.

While many agents, including Boras, have used the provision for years, it was ruled unenforceable by independent arbitrator Shyam Das, who sided with the players union. Former players’ association counsel Jeff Fannell represented Beltran.

“I felt like I had to win,” Beltran told USA TODAY Sports, “because he was basically suing me because I left him and he was trying to collect money without having done anything for me.

“It’s not the money. It’s the intention. Scott Boras had to do something that wasn’t right. If I haven’t done anything for you, haven’t negotiated your contract, how could I sue you and try to collect money because you left me and because you hired another agent? That didn’t make any sense to me.”

Boras believes the ruling could enable players to leave their agents at a moment’s notice with no repercussions, intensifying an already heated competition for clients among agents.

“It basically makes the agent an at-will employee. Is this what you want?” he said. “You should be responsible for the work you do. We need accountability on both sides.”
Boras, who has utilized the provision for nearly 15 years, fears the ruling could prompt agents to negotiate inferior contracts, simply to get their fees to protect themselves from players terminating an agreement.

“The understanding of this rule,” Boras said, “is that it now promotes the vast majority of agents to take any deal they can get. The agents’ conduct will be affected. This rule gives owners a lot more power. This is not in the best interest of major-league baseball players.

“Players know we stand by them. We give our players the best information so they have choices. We are not concerned with our interest of securing a fee at the expense of the player not receiving his fair market value.”

Boras also has an outstanding grievance against Chicago Cubs starter Edwin Jackson, who signed a four-year, $52 million contract after being previously represented by Boras.

“I never worried about it,” Jackson said. “Come on, you can’t have it both ways. You can’t take away guys from another agency, but when your guys leave, sue them.”

Robinson CanoBoras threatened recourse against Seattle Mariners second baseman Robinson Cano, who left Boras for Jay-Z and Roc Nation eight months before signing his 10-year, $240 million contract, but no grievance has yet been filed with the union.

“People (agents) are going to try one way or another to keep the players with them,” Beltran said, “but when you get to a point where you’re not happy with your representation, you need to look at this like a business. After all, he’s generating money from your money.

“Once you get to the point where you believe that representation is not working for you, there shouldn’t be any fear of changing agents. I think this case may help some young players realize that, yes, they can make a change and not get into trouble.”

Major League Players Association officials declined comment when asked about the grievance, and agents are prohibited from discussing the case.

“There’s a rule that you can hire an agent today, and fire him in the next two hours,” Cano said. “There’s a not a rule that you have give your agent 5%, no matter what. You can fire your agent whenever you want.”

When players hire an agent, they must sign a standard player-agent designation form, authorizing the agent to act on his behalf. There’s also a second document called the representation agreements, establishing the terms that include the compensation for negotiating the player’s baseball contract, along with endorsement deals and other services. The agreements expire every year and cannot be automatically renewed.

In Boras’ grievance against Beltran, he claimed he was entitled to a fee because of the specific language in his agreement that stipulated he would receive a 5% fee of the next contract if prematurely terminated. Boras, who negotiated a seven-year, $119 million contract after the 2004 season with the New York Mets, was preparing for Beltran’s next contract.

“You understand and agree that we invest substantial resources, time and effort in preparation for free-agent contract negotiations and salary arbitration hearings,” the provision in Beltran’s contract read. “Therefore, you agree that if you terminate our agency authorization during or after a championship season, and before the following championship season you sign a free-agent or arbitration-eligible contract (whether single- or multi-year), you agree to pay us 5% of the entire contract regardless of who negotiates it on your behalf.

Das ruled that when Beltran fired Boras, it effectively terminated the agreement, siding with Beltran and the union.

“This case is about what is or is not permissible under governing MLBPA regulations …” Das wrote. “The MLBPA, as the exclusive collecting bargaining representative, gets to decide what is in the best interests of the players it represents.”

This was the first grievance dealing specifically with the early termination provision, but Boras won a grievance hearing in 2008 against former Yankees outfielder Gary Sheffield. Sheffield left Boras after his agreement expired, and signed a three-year, $39 million deal with the Yankees. Yet, Boras successfully argued that he deserved to be paid for negotiating an out clause in Sheffield’s contract with the Los Angeles Dodgers, enabling him to become a free agent a year earlier. Boras won a $550,000 settlement.

Associated Press photos

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