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BTBS Exclusive: A look at Bob Garber’s contract with J.D. Martinez

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Bob Garber’s lawsuit against J.D. Martinez’s former financial advisor has given us a rare look into the business of baseball.

J.D. Martinez
Keith Allison from Hanover, MD, USA [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)]

Earlier this month, I wrote about a lawsuit agent Robert Garber had filed against former Merrill Lynch employee Bruce Lee, alleging that Lee had tortiously interfered with Garber’s agency contract with slugger extraordinaire J.D. Martinez by inducing him to leave Garber and sign with Boras instead.

Wendy Thurm also wrote about the case for the Athletic, and her write-up is well worth a read also. (As I wrote before, I tend to take a dimmer view of Garber’s chances than does Wendy, for the simple fact that I don't think Garber’s complaint is sufficient under Illinois pleading standards and tortious interference law. Still, the beauty of the law is that it’s all about opinions, and I’m looking forward to seeing who’s right.)

In any event, Garber and Lee probably aren't all that thrilled to be involved in litigation, but the case does present a rare opportunity for the rest of us. That’s because of a provision in the Illinois Code of Civil Procedure—735 ILCS 5/2-606, for the lawyers and nerds among us—that requires that if a claim is based on a “written instrument,” you have to attach it to your complaint.

In other words, Section 606 is a fancy way of saying that if you sue for breach of contract, you have to show everybody the contract by including it in your lawsuit. Thanks to Section 5/2-606 and Illinois fact-pleading rules, Garber’s lawyers were required to include his contract with J.D. Martinez in his lawsuit. And now, Beyond the Box Score has it too.

Here it is: JDM K (1).pdf. It’s the very first exhibit to the complaint. Let’s take a look!

The first thing to notice is just how short this contract is. There are a few reasons for that, most notably that most of the relationship between player and agent is regulated by the MLBPA’s Regulations Governing Player Agents, but a two-page contract for a relationship which could generate millions of dollars is still shorter than you might expect. If you want to compare, here’s a version of the NBA’s player agent contract.

As for those Regulations, Section 6 governs contracts between players and agents (the regulations call them “Player Agent Representation Agreements”). And Section 6 includes some requirements that explain a few of the provisions in the agreement. For example, Section 6(F) says that the contract must be between the player and the agent’s company, not the agent personally, so Martinez’s contract is with “RMG Baseball, LLC,” an Illinois Limited Liability Company.

But now we’re getting into some problems. According to the Illinois Secretary of State, RMG Baseball LLC was involuntarily dissolved back in 2012. Under the Illinois Limited Liability Company Act, a dissolved LLC can only do limited types of business, and only for five years after dissolution. Garber’s lawyers brought the suit under a different name, RMG Sports Group, LLC, a Florida limited liability company, which doesn’t have “RMG Baseball” as an assumed name. So it’s a legitimate question whether Garber’s contract names the right entity. There is no “RMG Sports Group, LLC” registered to do business in Illinois; the Illinois Secretary of State doesn’t have any record of that company existing.

Garber did have another Illinois company, RMG Sports Management, Inc., but that was dissolved back in 2013. The Florida Secretary of State also doesn’t show “RMG Baseball” as a valid assumed or business name for RMG Sports Group. Now, let’s be clear: that doesn’t necessarily mean Martinez’s contract isn’t valid or that Garber violated the MLBPA regulations, but what it does mean is that there is a legitimate question regarding whether the legal entity suing Lee is the same as the legal entity that entered into the contract with Martinez.

Section 6(G) states that no agent representation agreement can be longer than one year, so right in Section 1 of the contract we see the designated duration of the contract as one year from April 13, 2017. But then, the contract also says that Martinez isn’t allowed to hire any other agent without first terminating Garber, and that might not be permissible. That’s because Section 6(K) says this:

Except as provided in Section 6(L), a Player may revoke a Player Agent Designation at any time by providing the MLBPA, or the Player Agent(s) or Applicant(s) designated therein, a written notice revoking the Player’s current Designation, or terminating the Player’s agency relationship with the Player Agent(s) or Applicant(s) designated therein. The signing and filing of a new Player Agent Designation form which does not designate a Player Agent who was designated on the immediately prior Designation form filed with the MLBPA by that same Player also shall effectively revoke that Agent’s Designation. An effective revocation of a Player Agent Designation terminates a Player Agent’s authority thereafter to represent that Player notwithstanding any provision of a Player Agent Representation Agreement that is or may appear to be in conflict with this Section 6(K). The MLBPA shall notify a Player Agent or Applicant whenever it learns that a Player Agent Designation designating that Player Agent or Applicant is revoked.

In other words, the Regulations allow a player to go ahead and hire a new agent, and thereby implicitly revoke the previous agency relationship. It’s not clear-cut, but Garber’s contract language, saying that he must be terminated first, would seem to contradict this.

I did reach out to Daniel Konicek and Peter LeGrand, Garber’s attorneys at Konicek & Dillon, P.C., multiple times for comment about this contract, the case generally, and the corporate name issues I noted above. As of now, I haven’t received any response.

Section 6 also contains a number of provisions stating what a player-agent contract must include. For example, Section 6(C) says this:

§6(C) – Player Agent Representation Agreement. A Player Agent or Applicant who is granted a General Certification to represent a Player as described in Section 3(A) must, in addition to being certified by the MLBPA to the Major League Clubs as a Player Agent for that Player, enter into a written Player Agent Representation Agreement with that Player in plain language that specifies:

§6(C)(1) – the services to be provided to the Player;

§6(C)(2) – the fees to be charged for those services; and

§6(C)(3) – the expenses, if any, to be reimbursed.

So where are these things in Garber’s contract with Martinez? We see the services to be provided in Section 2, where Martinez agrees to designate Garber’s firm, RMG, as “his exclusive single representative for all baseball related matters including, but not limited to, contract negotiations, salary arbitration, trades, free agency, grievances, suspensions, injuries, etc.” As a side note, including “etc.” in a legal contract is generally bad practice because it’s not really possible to define what “etc.” means, and it’s rather remarkable to find that sort of language here.

The fees Garber charges Martinez are contained in Section 3, the longest single section of the contract. Garber charged Martinez five percent of his “gross baseball related income,” defined as the slugger’s pre-tax income. Interestingly, the contract also included the caveat that the player couldn’t receive as his net take-home pay, after the deduction of agent commissions, less than the major league minimum salary. That’s pursuant to Section 6(I) of the MLBPA’s regulations. Expenses are covered by Section 7; Garber says his company will cover most of its own expenses.

Now here is where things get interesting. Section 5 of the Contract states this:

That’s presumably the part of the contract which gives rise to Garber’s claim that he’s owed money for Martinez terminating his representation and joining Boras. Yet there are a couple of catches. First, this contract complies with MLBPA regulations saying that disputes arising under the contract are subject to arbitration through the union—that means you can’t sue for them. (Section 8 of the Contract includes language required by the MLBPA regulations reinforcing this requirement.) Arguably, this language means that this action should be in front of an arbitrator, not a court.

Second, the MLBPA rules state that if a pending free agent fires an agent between October 15 and February 22—i.e., the offseason—the player has to first consult with the union. That’s in Section 6(L):

A Player with Major League service in the immediately preceding season who is unsigned for the following Major League Baseball season may not revoke a Player Agent Designation or terminate a Player Agent Representation Agreement after October 15th of any year or the fifth day after the last day of the Player’s season, whichever is later, and before February 22nd of the next year, unless the Player first consults with the MLBPA. Any revocation of a Player Agent Designation or termination of a Player Agent Representation Agreement during the applicable period will not be accepted by the MLBPA until this consultation requirement is fulfilled.

Why does this matter? While we don’t know for sure, Martinez’s agency switch—reported on November 1, 2017—seems to have occurred during that period when he would have had to get union approval. That also means that if Garber was already negotiating with a team, he either was doing so with the Diamondbacks during the exclusive negotiation window, or he was negotiating while his player was still technically under contract, which isn’t allowed. In any event, it seems hard, based on this timeline, to believe that the $110 million contract Martinez eventually received from the Red Sox was the result of pre-termination negotiations by Garber.

It’s worth noting that Section 6(N) of the MLBPA Regulations authorizes the union to create a uniform, standardized player agent representation agreement. Garber, for whatever reasons, opted not to use that standardized contract. So while this is a look at what Garber used, it’s a fair bet that other agents have used other contract forms, whether their own or the union’s standardized version. Still, this is a fascinating look at the business side of baseball that we, as fans, don’t usually get. Litigation does have its perquisites.