On March 23, 2012, National Basketball Players Association (NBPA) certified player-agent Aaron Mintz resigned from Priority Sports & Entertainment. Soon thereafter, Mintz signed an employment agreement with rival Creative Artists Agency (CAA). I had reported that Mintz seemed extremely excited about the change of employment.
A Complaint was filed by Mintz against Mark Bartelstein & Associates, Inc., d/b/a Priority Sports & Entertainment on the same day that Mintz resigned from the company. The Complaint for Declaratory Relief was filed in Federal Court in California by the law firm of Proskauer Rose LLP.
Mintz’s main claim is that his employment agreement with Priority Sports & Entertainment included a two-year non-compete clause (barring Mintz from directly or indirectly representing anyone who is a Priority Sports & Entertainment client) and that California (pursuant to California Business and Professions Code Section 16600) does not recognize such restrictive covenants. Mintz has resided and worked in California for all 11 years of working for Priority Sports & Entertainment; however, what this case may come down to is whether the Court will allow Section VI of Mintz’s employment contract with Priority to come into play. Section VI(C) says that disputes arising under the agreement will be governed by the laws of the State of Illinois and Section VI(D) states that the parties consent to the jurisdiction of the state courts of Cook County, Illinois, and further agree to waive any objection that they may have to the jurisdiction of venue of such courts to adjudicate any dispute arising under this Agreement. Without a doubt, Bartelstein will attempt to use this clause to his advantage to have the case dismissed based on jurisdiction and also as an affirmative defense to Mintz’s claim that California will not permit non-competes.
Mintz’s rebuttal will be that the choice of law in the employment agreement does not control. He will likely say that what must be looked at is the effect of the non-compete, which would restrict him from competing with Priority Sports & Entertainment in the State of California – where Mintz lives and intends to continue to practice his trade. Further, Priority Sports & Entertainment will not be able to contend that it does not do business in the State of California. The big issue is whether those arguments will be given more weight than the choice of law and venue clauses within the employment agreement.
Mintz also claims that Bartelstein had the ability to terminate Mintz’s employment without notice, but Mintz had to provide at least fourteen day notice, and that the unilateral notice period also restrained Mintz’s ability to compete. This argument, on the surface, appears to be less attractive.