Scott Boras and the New York Times: why conflicts of interest matter

Superagent Scott Boras needs no introduction.

Scott Boras is the United States’ most powerful agent and is revered as one of the world’s top negotiators, with more than $2.3 billion in current major league baseball contracts under management as of Forbes’ 2019 agents list. He has negotiated 11 contracts worth more than $100 million—more than any other agent—including Bryce Harper’s $330 million deal with the Philadelphia Phillies and Max Scherzer’s $210 million deal with the Washington Nationals. Boras, a lawyer by trade, lends his name to the renowned Boras Corporation, the world’s top baseball representation agency.

Of course, Boras added to his ledger the record nine-figure deals for Anthony Rendon, Gerrit Cole, and Stephen Strasburg this past offseason. When he talks, the baseball world listens. So that’s why his op-ed last week in the New York Times, calling for a return of baseball before a vaccine for the ongoing COVID-19 pandemic has been created, was so disconcerting.

It is time again for baseball to serve. The political universe, including President Trump; the Senate majority leader, Mitch McConnell; Gov. Andrew Cuomo of New York; Gov. J.B. Pritzker of Illinois; and Mayor Lori Lightfoot of Chicago, have voiced an interest in the return of the game this summer when the time is right. Dr. Anthony Fauci, channeling the sentiment that President Roosevelt expressed in 1942, said in a recent interview that having “the great American pastime be seen” would help the mental health of the country.

* * *

The first step is to return the players to spring training-style camps as soon as possible. Players want to be with their teams now, safely preparing for the season by using established processes and procedures approved by public health officials. However, this would be a spring training unlike any other. Players would have to be in a “functional isolation,” separated from the public and their families as they prepare.

Players must feel safe when they return, and they understand that they would be in a controlled environment where they could be evaluated by the medical staff each day. The numerous medical experts I have spoken to recommend clubhouses be sanitized daily, and that masks, latex gloves and hand sanitizer should be standard in each one. Major League Baseball, with the understanding that the medical needs of our country’s population comes first, will need to contract with a testing company to make this all safe for approximately 1,600 players, plus coaching staffs, groundskeepers, umpires and other officials.

It will be challenging to do this all at once, but it can be accomplished with staggered reporting dates. Pitchers and catchers would report first, then the position players would come in the next wave, followed days later by the prospects and depth players.

Boras then doubled down on this sentiment in an interview with CNBC.

“I’m not waiting for big pharma,” Boras told CNBC in an interview this week. “While pharma is working on vaccines, we need to advance earlier.”

Boras has spent his days in isolation consulting with immunologists and medical experts around the world, and he said this elite class of professional baseball players, made up of young healthy athletes, are the perfect subjects to get America running again if done properly.

Here, then, is an attorney and agent offering up his clients to be separated from their families and used as de facto lab rats. The reason he offers is America’s mental health. But if we’re being honest, there’s another incentive for play to return: Boras’ commission.

According to Forbes, his agency, the Boras Corporation, generated almost $120 million in commissions in 2019. Assuming an industry-standard five percent commission, Boras himself stands to make $27 million in commissions in 2020, which would make him the fifth-highest paid player in Major League Baseball.

And honestly, that’s concerning. Under a case called Detroit Lions v. Argovitz, sports agents are fiduciaries who owe a duty of loyalty to the beneficiary — to the exclusion of everyone else. As attorney Robert Kutcher explains,

Whenever one party places trust and confidence in a second person with that second person’s knowledge, it is possible that a fiduciary relationship is created. Such a relationship imposes on the fiduciary the duty to act in the best interest of the person who has placed his or her trust and confidence in the fiduciary. As a result, the fiduciary may not simply deal with that party at arm’s length, guided only by the morals of the marketplace.

So our first question, then, has to be to figure out what a conflict of interest is. If you’re looking for a very technical answer, this article by Arthur Laby from the American University Law Review is a good introduction to conflicts of interest in fiduciary relationships generally. But we’re looking for something a bit quicker, so we’ll return to our old friends, the Restatements. For this, we’ll look at a book called the Restatement (Second) of Agency, Section 394, where it says this:

Unless otherwise agreed, an agent is subject to a duty not to act or agree to act during the period of his agency for persons whose interests conflict with those of the principal in matters in which the agent is employed.

The MLBPA has also given us some guidance in its Rules governing player agents:

§5(B)(12) – Actual or Potential Conflicts of Interest – No Player Agent, Expert Agent Advisor or Applicant shall engage in any conduct which, in the MLBPA’s reasonable judgment, may create an actual or potential conflict of interest with the effective representation of players, or the appearance of such a conflict, provided that the simultaneous representation of two or more players on any one Club shall not, standing alone, constitute a per se violation of this provision.

There’s also the additional factor that Boras is an attorney, and the Rules of Professional Conduct, which govern attorneys, generally prohibit an attorney from actual or apparent conflicts of interest in representation. These Rules vary slightly from state to state, so for our purposes we’ll use the American Bar Association’s Model Rules. Model Rule 1.7 governs conflicts of interest.

(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:

(1) the representation of one client will be directly adverse to another client; or

(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:

(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;

(2) the representation is not prohibited by law;

(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and

(4) each affected client gives informed consent, confirmed in writing.

Here, there is at the very least an apparent conflict. Scott Boras is openly lobbying across multiple media outlets for the immediate return of baseball. He is doing so ostensibly for the public mental health, despite a very real personal financial incentive. And he is advocating for very real detriment to his clients, including sequestration and possible exposure to a deadly viral plague. The optics of this are bad, to say the least.

Now, it’s entirely possible that Boras is in earnest, and genuinely does believe that baseball would be good for the nation’s soul. It’s also possible that Boras did what the Rules require and obtain a written conflict waiver from all of his clients. But even then, Boras’ duty as a fiduciary isn’t clear cut. For some players, undoubtedly the financial loss is such that returning to baseball is their primary goal. For other players with partners or families, or who have underlying health conditions, it’s likely that playing is at the bottom of their list of goals right now. As such, Boras’ op-ed is almost certainly a conflict of interest no matter how you slice it, with the superagent placing his own financial incentives above those of his clients.

The other problem for Boras is that this isn’t new.

As I’ve written before, Boras has a reputation for skirting the line between duty to his clients and self-enrichment.

As a preliminary matter, Boras has suffered embarrassing, if scarcely reported, losses before. In a grievance Boras filed against Carlos Beltran, for example, arbitrator Shyam Das once voided a clause in his agency contracts entirely for violating the MLBPA regulations governing agents. (That clause penalized players for leaving his agency.) He’s also taken or threatened to take legal action against Robinson Cano, Edwin Jackson, and others for leaving his agency, and made the rather bizarre legal argument that if players were allowed to leave his agency without penalty it would incentivize agents to negotiate lesser contracts for them. (Nothing ended up coming from it except a rivalry with Jay-Z.)

So if I were a client of Boras, I might be concerned right now — especially if I didn’t have prior notice or warning of his current pro-play media blitz. I might think that Boras is willing to risk my health for his commission. That would be a very poor quality for a fiduciary to have. It would also be, in all likelihood, illegal.

Sheryl Ring is a litigation attorney and Legal Director at Open Communities, a non-profit legal aid agency in the Chicago suburbs. You can reach her on twitter at @Ring_Sheryl. The opinions expressed here are solely the author’s. This post is intended for informational purposes only and is not intended as legal advice.