Detroit Pistons center Nerlens Noel must arbitrate his claims against his former agent, Rich Paul, a federal judge in Dallas ruled last Friday. Judge Jane Boyle dismissed Noel’s lawsuit, which asserts that Paul negligently advised him on contract offers. She concluded that Noel contractually assented to arbitration as part of his Standard Player Agent Contract (SPAC) with Paul and Klutch Sports Group.
Last year Noel sued Paul and Klutch for negligence and breaches of contract, fiduciary duty and fair dealing. Noel insists that Paul wrongfully advised him to reject a four-year, $70 million offer from the Dallas Mavericks in the summer of 2017. The now-28-year-old also maintains that Paul lost interest in him as a client in the aftermath of an injury-riddled 2017-18 season, going so far, Noel says, as failing to return phone calls from teams. The complaint essentially blames Paul for what Noel portrays as diminished earnings, with Noel earning $13 million over the same four years he could have earned $70 million.
Noel, who was drafted sixth in the 2013 NBA draft by the New Orleans Pelicans, is on his sixth NBA team (including the Pelicans, who traded him on draft night). Last season he averaged 3.4 points and 5.6 rebounds in 22.5 minutes per game for the New York Knicks, who in July traded the former Kentucky star and Alec Burks to the Pistons for a second-round pick and the draft rights to Nikola Radičević.
Paul, who represents LeBron James and other stars, firmly disputes Noel’s allegations. He also contends that Noel owes him a 4% agent commission on a one-year, $5 million contract Noel signed with the Knicks in November 2020.
In fact, before Noel sued Paul, Paul initiated the arbitration process provided for in the SPAC. As worded in the SPAC, “any and all disputes between the Player and the Agent involving the meaning, interpretation, application, or enforcement of this Agreement or the obligations of the parties under this Agreement shall be resolved exclusively through the Arbitration procedure set forth in Section 5 of the NBPA Regulations Governing Player Agents.”
The SPAC and its mandatory arbitration provision reflect a couple of legal dynamics.
First, the NBPA is the exclusive bargaining representative of NBA players. Any agent who wishes to negotiate on behalf of an NBA player must be certified by the NBPA and must adhere to NBPA regulations on agents. Players, by virtue of their membership in the NBPA, agree to this arrangement. That made it difficult for Noel to argue that he should be able to sidestep the arbitration provision and have his case heard in court.
Noel argued his claims involved facts that were outside the scope of the arbitration provision, but Doyle was unpersuaded, writing “each claim boils down to Noel’s general complaint that Paul and [Klutch] breached obligations or duties owed to Noel as a result of the player-agent relationship that was created by the SPAC.”
Second, it is common—and sensible—for players’ associations to rely on mandatory arbitration to resolve disputes between players and their agents. Unlike litigation, arbitration is conducted in private, and thus outside the reach of inquisitive journalists and curious fans. The NBPA also uses a seasoned expert on labor and sports law as the arbitrator; a judge, in contrast, might lack familiarity with the NBA agent industry or with norms in how NBA players and their agents interact.
Noel hasn’t necessarily lost; it’s possible he could prevail in arbitration. But if that happens, it will be behind closed doors.