At the 2009 Sports Lawyers Association conference, in response to a question (from me) about the possibility for agents sue players unions for failing to enforce their rules, Don Fehr, then executive director of the Major League Baseball Players’ Association (MLBPA), emerged from the hearing to declare that if the agents sued the union, it would CI would disband its agent certification program and negotiate any player contracts. There’s no indication the MLBPA is considering cutting agents, but it just decisively won a challenge from some potential agents.

Bad Bad Bunny and associates

Benito Martinez-Ocasio, better known as “Bad Bunny”, is a Puerto Rican rapper and one of the most popular artists in the world. In 2021, he and his partners – Jonathan Miranda and Noah Assad – sought to capitalize on this fame by co-founding a sports agency, Rimas Sports, to represent Latin American athletes.

However, the newcomers’ efforts ran into the MLBPA’s agent regulations. Pursuant to the National Labor Relations Act (NLRA), the MLBPA is the exclusive representative of players for purposes of negotiating wages, hours and terms of employment. The MLBPA exercises this authority by negotiating a comprehensive collective bargaining agreement (CBA) with Major League Baseball and its clubs. Yet the MLBPA also delegates to agents the authority to negotiate individual player contracts that are not inconsistent with the CBA through a certification process (and, as Fehr noted, it could withdraw this authority) .

In 2021, Miranda and Assad applied to become certified MLBPA agents. In doing so, they have certified that they have read and agreed to comply with the MLBPA regulations. Unfortunately for them, they did not comply.

Miranda failed the September 2021 agent exam while Assad skipped it. Nonetheless, they are committed to starting getting MLB player clients. To assist in their endeavor, they enlisted the services of William Arroyo, a certified agent with a long – but intermittent – ​​career in professional baseball. Assad and Miranda arranged for dozens of players who were not their clients to attend Bad Bunny concerts and a Phoenix Suns basketball game. They also sent players “care packages” containing various merchandise and employed uncertified personnel in an effort to recruit players. Finally, they arranged loans for the players, notably from a financial institution with which they had a close relationship.

All of these actions violated the MLBPA’s agent regulations which, among other things, prohibit offering money or valuables as an inducement for a player to become a customer, require loans to be reported and approved by the MLBPA, and prohibit agents from employing non-agents. certified personnel for the purposes of recruiting clients.

MLBPA investigates

Certified agents who had their clients poached by Rimas Sports quickly complained to the MLBPA. As of May 2022 alone, 21 players have signed with Arroyo as their agent.

The MLBPA investigated the case for nearly two years, gathering documents and interviewing those involved. However, Miranda, Assad, and Arroyo consistently failed to cooperate with the investigation by delaying their responses, refusing to provide certain information or documents, and providing inconsistent or misleading responses.

On April 10, 2024, the MLBPA issued a 61-page notice of discipline that revoked Arroyo’s certification and barred him from reapplying for five years and which also barred Assad and Miranda from reapplying for such certification for five years.

Rimas Sports returns – and misses

On April 15, 2024, Arroyo, Assad and Miranda appealed the MLBPA’s decision and asked the appointed arbitrator to issue an injunction preventing discipline pending the outcome of the appeal. The arbitrator refused, and on April 22, 2024, the MLBPA filed suit in federal court in New York to uphold the arbitrator’s decision.

May 16, 2024, Rimas Sports filed a complaint against the MLBPA in federal court in Puerto Rico. Rimas Sports argued that the MLBPA exceeded its authority under the NLRA and, in doing so, tortiously interfered with the agency’s contracts with its player-clients and agents. Specifically, Rimas Sports argued that the MLBPA has the authority to regulate individual agents to the extent they are involved in negotiating player contracts, but does not have the authority to regulate agents or agencies when they are involved in negotiating marketing and sponsorship deals on behalf of players. Nonetheless, they claimed that the disciplinary actions taken by the MLBPA effectively prevented Rimas Sports from also providing these services, a claim denied by the MLBPA.

In an August 15, 2024 Notice and Order, the District of Puerto Rico granted the MLBPA’s motion to compel the action to arbitration pursuant to the MLBPA’s regulations. The court recognized and ruled that the union’s bylaws could and did govern the agents’ business entity, a decision that separates from NFLPA agent regulation.

When Rimas Sports attempted to circumvent the MLBPA arbitration process by filing a different arbitration with the American Arbitration Association, the court ordered Rimas Sports to comply with its prior order and pay $10,797.45 of attorney fees accrued by the MLBPA to contest the case.

Meanwhile, on July 24, 2024, the Southern District of New York denied the MLBPA’s request to uphold the arbitrator’s order denying Arroyo, Assad and Miranda’s request to stay disciplinary action against them at the reason that the order was not sufficiently definitive for the federal government. court has jurisdiction.

Game Over (almost)

The court orders referred the matter to an arbitration process in which Arroyo, Assad and Miranda faced the prospect of convincing an arbitrator that the discipline imposed by the MLBPA was unreasonable, arbitrary or not supported by evidence .

After seven days of hearings in September and October that included testimony from seven witnesses and 228 exhibits, on October 30, 2024, an arbitrator ruled in favor of the MLBPA. In an 80-page decision, arbitrator Ruth Moscovitch detailed the three plaintiffs’ voluminous and essentially undisputed violations of the agent rules and concluded that the MLBPA’s investigation was fair and thorough. The arbitrator upheld the five-year bans imposed on Assad and Miranda, but reduced Arroyo’s ban to three years, finding that he had been placed in an “impossible position” because of the actions of Assad and Miranda. Miranda and their domination of the new company.

On November 12, 2024, the MLBPA filed a motion in a New York state court to confirm the arbitration award. Arbitral awards are only set aside in extraordinary circumstances, for example where the arbitrator was biased or clearly disregarded the relevant law, or where there was some other type of serious misconduct, none of which appears to be present in this case. Therefore, it is expected that the court will uphold the award, thus ending Assad, Miranda and Bad Bunny’s foray into the baseball player representation business (although they may provide other services, like marketing).

For the MLBPA, the result is a fierce and strong assertion of its authority over agents, its regulations and its investigative process. The results are likely to also discourage any agents who might consider a future legal challenge against the MLBPA, whether or not the MLBPA is interested in Fehr’s hypothetical response.