Agent defection creates nasty litigationMon May 17, 2010 @ 12:44PM PST
By Eriq Gardner
IMG Worldwide says that one of its former sports agents, Matthew Baldwin, who defected to CAA last month, destroyed key documents pertaining to clients and their salaries. The agency claims documents were deleted in order to interfere with its attempts to prove that Baldwin misappropriated trade secrets and violated a non-compete clause in his contract.
A key aspect of the case will be the forum of dispute, since California's rules on non-compete clauses are less generous to employers than Ohio's. Baldwin was the first to file his case, but on Wednesday, IMG moved to dismiss the California case, alleging he is an "admitted liar" who was "forum shopping."
To buttress its case against Baldwin, IMG has also introduced new claims in an amended complaint that says Baldwin destroyed evidence on his computer and violated the parties' standstill agreement. "The fact that most of the confidential information at issue in this lawsuit has a situs in this District nails the coffin shut on Defendant's venue argument," IMG argues in court papers.
Baldwin is represented by Adam Kaiser at Dewey & LeBoeuf. Kaiser says allegations that Baldwin destroyed evidence are false and that all the alleged spoilage is on the laptop that was turned over to IMG. Kaiser also argues that the idea that coaches' salaries are trade secrets is "preposterous," and that IMG is trying to avoid the 2007 outcome of a similar case involving another former IMG agent, Jay Danzi.
"If anyone is trying to forum shop, it's IMG," Kaiser says. "They saw how things went in the Danzi case and decided to file in Ohio in order to avoid a judgment about the non-enforceability of a restrictive covenant, even though a large part of their business in California regularly takes advantage of this."
It's rare that disputes over agent defections and client poaching get into the public eye because most go to arbitration. But in this instance, neither party seems interested in going that route. As a result, the case could provide a window into the sometimes shadowy world of agency employment. The Baldwin case could also mean something to corporate America at large, deciding what happens when an employee with a restrictive contract moves to California.