The legal battle between basketball agent Dan Fegan and full-service sports agency Independent Sports & Entertainment (ISE) has shifted to arbitration. Yesterday, it was revealed that the federal court that had presided over litigation between the parties decided to kick it back to state court, and a source has stated that the state court case will soon be dropped in favor of proceeding in arbitration.
Additionally, the arbitrator assigned to the case has furnished a favorable opinion for Fegan by way of a denial of ISE’s request that Fegan be preliminarily enjoined from competing against ISE. The actual arbitrator’s order has not been seen, but Fegan’s team has disseminated a press release that takes pride in the decision.
“Based on the arbitrator’s ruling, Mr. Fegan is free to continue providing representation and counsel to current and future NBA players, and has no restrictions on establishing his own business regardless of whether it competes with ISE,” states the release.
Meanwhile, an ISE spokesperson has confirmed that ISE will continue to vigorously fight Fegan in the arbitration proceeding. Thus, even though the preliminary injunction was not granted, ISE takes the position that the arbitrator may ultimately still decide that a more permanent injunction be imposed after the parties have a hearing.
“Dan Fegan’s suggestion that he is now ‘free to compete’ with ISE is nonsense, as is his suggestion that he ‘won’ anything on the merits,” says the ISE spokesperson. “On the contrary, the arbitrator expressly said that he had ‘serious questions’ about Mr. Fegan’s conduct and held that ISE’s non-compete agreement is fully enforceable and that ISE can recover damages for any breach of that agreement by Mr. Fegan. Regardless of any injunction, any action Mr. Fegan takes in breach of ISE’s agreement he takes at his own risk and at the risk of anyone who interferes with ISE’s contractual rights. Mr. Fegan’s bluster and smear tactics will not change these simple facts, and ISE will vigorously enforce its rights against Mr. Fegan in the upcoming arbitration proceeding and will seek all damages caused by Mr. Fegan’s outrageous behavior toward ISE and the agents that were under his supervision.”
ISE’s legal spat with Fegan was founded in March based on Fegan’s departure from ISE (formerly known as Relativity Sports ). ISE attacked Fegan with allegations that he unfairly competed with ISE while he was employed and attempted to turn ISE’s own employees against it.
The war of words between ISE and Fegan intensified one month later when each side submitted sworn declarations. The declarations delivered by ISE were brutal, with accusations that Fegan consistently tried to get ISE agents to leave the company with him, paid individuals under a side business in competition with ISE and told ISE employees to refrain from signing long-term deals with the company.
Fegan’s declarations focused on his extensive career as a basketball agent as well as the National Basketball Players Association’s position that a court of law should not be in a position to limit Fegan’s ability to practice as a basketball agent. An arbitrator may ultimately disagree with Fegan’s position, but for now the arbitrator believes it would be premature to preclude Fegan from competing as a basketball agent.
Darren Heitner the Founder of South Florida-based HEITNER LEGAL, P.L.L.C. and Sports Agent Blog. He authored the book, How to Play the Game: What Every Sports Attorney Needs to Know.