• Dante Camilli

Nerlens Noel's Lawsuit: A Textbook Case of Player MISrepresentation


[1]


New York Knicks center Nerlens Noel has just filed a $58M lawsuit against his former agent, Rich Paul. [2] Noel filed this suit in response to Paul filing a grievance with the National Basketball Players Association for $200,000 of unpaid commission.[3] The $200,000 Paul seeks is his commission from Noel’s $5,000,000 contract that he helped negotiate for the 2020-2021 season with the New York Knicks.[4] Paul is rightfully due that $200,000 from the former sixth-overall pick, as NBA agents can earn up to 4% of non-minimum contracts negotiated for their clients, but Noel is bringing this suit regarding the money that Paul didn’t earn for his client over the past 4 seasons.[5]


Rich Paul, founder of Klutch Sports Group, is one of the most powerful agents in the NBA, representing stars like LeBron James, John Wall, Anthony Davis, and Ben Simmons.[6] Paul has earned his players collectively about $372,496,340 in salary for the 2021-22 NBA season, the second-highest negotiated total among NBA agents.[7] Despite Paul’s track record for getting his clients paid, Noel brought suit against him for his failure to fulfill a promise made at the beginning of their four-year relationship.[8]


The Complaint filed by Noel claims that Rich Paul induced Noel to terminate his agent agreement with Happy Walters while at a birthday party for Noel’s teammate and Paul’s client, Ben Simmons.[9] Paul allegedly suggested to Noel that he “was a $100 million man” and that Paul could get Noel a max deal.[10] Noel, on the back of this promise, left his old representation and joined Klutch Sports and Rich Paul.[11] The following offseason, where Noel was a restricted free agent, he received a 4 Year, $70 million offer from the Dallas Mavericks, but Paul insisted that wasn’t enough and that Noel could actually earn more on the market the following year.[12] As a result, Noel instead signed the $4.1 million qualifying offer with the Mavericks.[13] As we have seen recently in the NBA with Dennis Schroder, sometimes betting on yourself is the worst decision to make.[14]


The table below shows the contracts that Noel signed with Paul as his agent, followed by his most recent deal with the Knicks after he terminated his relationship with Klutch Sports:[15]


The lawsuit Noel filed is for a total of $58 million, the difference between the $12,838,474 Noel earned through his four years with Rich Paul as his agent and the $70 million offer from the Mavericks Noel turned down relying on Paul’s promises.[16]


As this case proceeds the contract theory of reliance may be heavily used against the promises of earnings that Paul made, but the suit also cites Paul’s negligence in not responsibly fulfilling his duties as Noel’s agent.[17] As a representative for a player, an agent is supposed to act in the best interest of their client, fielding offers from teams, considering those offers financially, and evaluating how their client may fit on the court with those teams. It was brought to Noel’s attention by former 76ers coach Brett Brown that Paul had refused to take calls from the team’s front offices during the 2018 offseason [18], a year in which the Sixers had $25 million in estimated cap room heading into the offseason.[19] It is uncertain how much the Sixers would have ultimately offered Noel, but it almost certainly would have been larger than the minimum contract that he ultimately signed with the Oklahoma City Thunder after lackluster strategy and advocacy from Paul left Noel scrapping to sign somewhere after the market had dried up.[20]


It remains to be seen how the court will approach the lawsuit and eventually rule, but this lawsuit raises another question – could Rich Paul be suspended by the NBPA and no longer be able to represent NBA players?


The NBPA’s regulations governing player agents present guidelines for the conduct and responsibilities of NBA player agents.[21] Besides outlining maximum fees and arbitration procedures, the regulations also provide “Prohibited Conduct Subject to Discipline.”[22]


On point with Rich Paul’s representation of Nerlens Noel is Section 3 B(4) which states that player agents are prohibited from “[p]roviding materially false or misleading information to any Player . . . in the context of seeking to be selected as a Player Agent for that individual or in the course of representing that Player as his Player Agent.”[23] This falls directly in line with the misrepresentations made to Noel that he was a “$100 million man” – a figure that he did not come close to eclipsing in his years while represented by Paul.[24]


Further, player agents are prohibited from “concealing material facts from any Player whom the Player Agent is representing which relate to the subject of the individual’s contract negotiation.”[25] With Paul not only withholding from Noel that certain teams were inquiring about him, but also ignoring these calls, it is clear that another regulation was violated.[26]


It would be an incredible fall from grace for one of the league’s highest earning agents to lose his license, and it is also unknown at this stage whether Noel’s claims are accurate. Testimony from league officials and team employees may shed light on Paul’s potential misconduct, and ultimately Nerlens Noel’s lost earnings could be restored.




References:



[1] NBC Sports, https://nba.nbcsports.com/2021/08/02/reports-knicks-keep-rim-protector-nerlens-noel-guard-alec-burks/


[2] Brian Windhorst, New York Knicks' Nerlens Noel sues Rich Paul, Klutch Sports; claims $58M loss in potential salary, ESPN (August 24, 2021), https://www.espn.com/nba/story/_/id/32079344/new-york-knicks-nerlens-noel-sues-rich-paul-klutch-claiming-loss-58m-potential-salary


[3] Id.


[4] Id.


[5] National Basketball Players Association, NBPA Regulations Governing Player Agents, NBPA (June 2019), https://cosmic-s3.imgix.net/fec8eea0-dbdc-11e9-a097-0b637a5431fa-Agent-Regulations--Final--2019.pdf


[6] RealGM, Rich Paul Client List, realgm.com (n.d.), https://basketball.realgm.com/info/agent-client-list/Rich-Paul/258


[7] HoopsHype, NBA Agents, hoopshype.com (n.d.), https://hoopshype.com/reps/


[8] Darren Heitner, Nerlens Noel Blasts NBA Agent Rich Paul in New Lawsuit, sportsagentblog.com (August 24, 2021), http://sportsagentblog.com/2021/08/24/nerlens-noel-blasts-nba-agent-rich-paul-in-new-lawsuit/


[9] Id.


[10] Id.


[11] Id.


[12] Id.


[13] Id.


[14] Fox Sports, Dennis Schroder’s Bet on Himself Proved Costly in the End, foxsports.com (August 11, 2021), https://www.foxsports.com/stories/nba/dennis-schroder-contract-los-angeles-lakers-boston-celtics


[15] Spotrac, Nerlens Noel, spotrac.com (n.d.), https://www.spotrac.com/nba/new-york-knicks/nerlens-noel-13319/


[16] Id.


[17] Windhorst, supra.


[18] Heitner, supra.


[19] Luke Adams, 2018 NBA Offseason Salary Cap Digest: Philadelphia 76ers, hoopsrumors.com (May 23, 2018), https://www.hoopsrumors.com/2018/05/2018-nba-offseason-salary-cap-digest-philadelphia-76ers.html


[20] Heitner, supra.


[21] NBPA, supra.


[22] Id.


[23] Id.


[24] Heitner, supra.


[25] NBPA, supra.


[26] Heitner, supra.