On Monday, the New York Times reported that Major League Baseball super agent (and attorney) Scott Boras may have violated the MLB Players Association agent regulations. Allegedly, Boras loaned a total of $70,000 to teenage prospect Edward Salcedo of the Dominican Republic. Section 5(B)(5)(a) of the MLBPA regulations generally provides that agents are prohibited from making such loans to professional players represented by the agent unless the agent discloses the amount and terms of the loan to the MLBPA. While it is unclear whether Boras disclosed the loan to the MLBPA, he has admitted to “aiding players and families in the past,” and the player’s age at the time of the loan—he was only fifteen—and the amount of the loan raise serious ethical issues.
To be clear, I am not accusing Boras of anything. I cannot pretend to know the terms of the loan or the nature of his dealings with Salcedo. And even if Boras did violate the regulations, many believe there will be few repercussions. Supposing, however, that the allegations are true, and setting aside the violation of the MLBPA agency regulations, Boras’ actions probably run afoul of the ABA Model Rules of Professional Conduct for lawyers.
Specifically, Rule 1.8 provides that a “lawyer shall not enter into a business transaction with a client . . . unless:” (1) the transaction and terms are fair, reasonable, and transmitted in writing; (2) the lawyer advises the client in writing of the desirability of seeking independent counsel and provides the client with reasonable opportunity to do so; and (3) the client gives informed consent in a writing signed by the client. Assuming that nothing from this transaction was in writing, Boras’ loan was a clear violation of Rule 1.8 and created an impermissible conflict of interest between him and Salcedo.
By providing the loan, Boras took a financial position involving his client in which he had an adverse interest. Because of his legal skill and training (he is widely regarded as one of the best negotiators in baseball) and the relationship of trust between him and Salcedo, Boras had ample opportunity to take financial advantage of his client through the loan. Such conduct is exactly the type of conduct Rule 1.8 seeks to prevent with its writing requirements. Indeed, because of similar concerns, the MLBPA agent regulations partially mirror Rule 1.8 in that they require the terms of the loan to be in writing and approved by the MLBPA. Interestingly, Salcedo fired Boras as his agent, only to rehire him after a short period of time. Salcedo’s brother claims that Salcedo rehired Boras because he received pressure to repay the loans, which (at the time) he could not afford. Allegedly, rather than repaying, Salcedo agreed to let Boras represent him again. If these facts prove true, Boras unquestionably violated Rule 1.8 (not to mention his duty of loyalty) by placing his interests ahead of the interests of his client.
Unfortunately, Boras’ alleged actions perpetuate the stereotypes of the “sleazy lawyer” and “sleazy agent.” The relationship between lawyer and client is one of trust and confidence, and when the public hears such stories, it loses faith in a lawyer’s ability to perform in an advisory role. Admittedly, attorneys who are sports agents are in a relatively difficult position; while attorney-agents are subject to the Rules of Professional Conduct, nonattorney-agents are not bound by any such rules. As such, attorney-agents can be at a disadvantage when recruiting and interacting with clients. On the other hand, and rightly so, more agent associations (like the MLBPA) are cracking down on agent conduct and attempting to level the playing field between attorney-agents and nonattorney-agents. Attorney-agents now have more incentive to adhere to the professional rules like the Model Rules of Professional Conduct. Until an attorney-agent receives punishment for violating either a state’s rules of professional conduct or an agent association’s regulations, however, the public will not take seriously the attorney-agent’s duty to obey such rules and will continue question the integrity of the profession.