A Win For Zion

The United States Court of Appeals for the Fourth Circuit affirmed rulings in favor of a high-profile athlete sued by his former agent. 

In this case, we interpret the North Carolina Uniform Athlete Agents Act, which governs contracts between student-athletes and their agents. Prime Sports Marketing, LLC, and Gina Ford argue that their former client, Zion Williamson, wasn’t a “student athlete” when he contracted with them, so he can’t benefit from the Act’s protections.

The district court rejected that argument. It also granted summary judgment to Williamson on Prime’s contract and tort claims.

Because Williamson was engaged in an intercollegiate sport while on the Duke University men’s basketball team, and was thus a “student-athlete,” we agree with the district court that Prime’s failure to comply with the Act’s requirements voided the contract. We also affirm the district court’s grant of summary judgment on Prime’s contract and tort claims.

The dispute

Williamson’s talents generated interest not just from basketball fans, but from agents eager to represent him. During his freshman year, Williamson began to communicate with Gina Ford, a marketing agent and Prime’s president. Ford met with Williamson and his mother and stepfather several times to discuss Prime representing Williamson as his marketing agent when he turned pro.

After Williamson played his last game at Duke (but before being drafted), he hired Prime as his marketing agent. Under the agreement, the parties could terminate the contract only after five years, and then, only for cause.

For a few weeks, all seemed well. Ford secured a cover shoot and article about Williamson for Slam Magazine. She also sent Williamson two “Partnership Summaries,” which contained a compilation of one-page offers purportedly made to Williamson by various companies, J.A. 1849–97, 1965, as well as a “Brand Management Strategy,” which discussed Williamson’s brand and identified “potential brand partnerships,” J.A. 1426–45.

But the day after receiving the strategy document, Williamson’s mother and stepfather told Ford that Williamson was terminating the Prime contract and instructed her to stop negotiating with third parties on Williamson’s behalf. Unbeknownst to Ford, Williamson’s parents also forwarded the strategy document and Partnership Summaries to agents from Creative Artists Agency (“CAA”), a competitor agency that Williamson had retained as his player agent.

Student-athlete status

We agree with Williamson. If a student is engaged in an intercollegiate sport when he signs an agency contract, he is a student-athlete subject to the Act. The permanent ineligibility clause doesn’t apply to Williamson, who was engaged in a single sport.

In our view, the legislature included the Act’s second definitional sentence of “student-athlete” to protect two-sport athletes, and Prime’s interpretation runs contrary to that purpose. While the second sentence might suggest that a student-athlete who violates NCAA rules can’t benefit from the Act’s protections, that construction works only if we ignore the first sentence. As was decidedly not the case with Williamson, an athlete who is “permanently ineligible” to compete is, by definition, not “engage[d] in, eligible to engage in, or potentially eligible to engage in an intercollegiate sport.”

Contract void

Now that we’ve determined that the Act applies to the Prime contract, we must decide whether the statute voids the contract. It does.

Prime concedes that Ford wasn’t registered as an agent in North Carolina, and under the Act, any agency contract between a student-athlete and an agent who fails to register in North Carolina is automatically void. N.C. Gen. Stat. § 78C-88(d). Likewise, it’s undisputed that the Prime contract didn’t contain the requisite warnings. So even if the contract weren’t already void, Williamson was free to void it, see N.C. Gen. Stat. § 78C94(d), which he did both via email and through counsel.

Because the contract was void, the district court correctly granted Williamson’s motion for judgment on the pleadings. And since we can’t make a retroactive determination about Williamson’s permanent ineligibility to compete, we agree with the district court that any motion to amend Prime’s complaint with other evidence of Williamson’s rule violations would be futile.

The court affirmed the rejection of counts alleging fraud and misappropriation of trade secrets. (Mike Frisch)