posted on Monday, April 23, 2007 9:23 AM
by
Lou Michels
No Good Deed Goes Unpunished, Even for Unions
I'm an NFL Players Association certified agent and, because of that fact, take a certain amount of interest in sports law situations. Most of these revolve around some type of an employee/employer relationship or even union relationship that goes awry. While these cases are often typical employee discipline cases, or hiring and firing matters, the high-profile nature of the people involved leads to some interesting results.
Case in point-in an effort to deal with instances of incredibly bad judgment by its members, along with the never-ending problem of scam artists who target professional athletes, the Players Association set up a certification process for financial planners in 2002. The idea was simple and a clear benefit to the players-the NFLPA would determine who could be recommended to handle the millions of dollars that players can earn over the course of their playing careers.
Unfortunately, a company headed up by two NFLPA certified financial planners, International Management Associates, collapsed in 2006, leaving more than 500 investors with losses totaling somewhere in the vicinity of $185 million. Among the group that lost money are several NFL players and former players. They are now suing the union, and the NFL, for gross negligence in failing to uncover the fact that the financial planners in question were not registered as financial advisors in any state or federal jurisdiction, and for failing to determine that one of the principals of IMA had several state and federal judgments and tax liens against him.
The case got past the Association's and League's motion to dismiss and is now headed into discovery, which should prove to be interesting. At least one of the players who is suing was a former employee of IMA, and the NFLPA is arguing that an arbitration clause in the collective bargaining agreement precludes any type of court action on these kinds of issues. That issue will surface again when the case goes to summary judgment, but for now there should be some notable revelations about how the financial certification process went forward and whether the NFL has a separate duty to check the credentials of people certified by the union.
But I'm sure there are people in the union asking why they are getting sued when all they were doing was trying to set up a system that would give more information to the players and their agents about the people who want to handle their money. Allow me to introduce you to the Michels' Iron Law of the Workplace--no good deed goes unpunished.