Group Created with Sketch.
Volume 26 No. 227
  • Created with Sketch.
  • Created with Sketch.
  • Created with Sketch.

Federal Court Rules Against Fegan In Fight With ISE, Sends Case Back To State Court

An L.A. federal court judge yesterday ruled against NBA agent Dan Fegan and in favor of his former employer, Independent Sports & Entertainment, sending the bitter legal battle back to state court. Judge Andre Birotte Jr. denied Fegan's motion to dismiss ISE's legal action against him. Birotte also granted ISE's motion to remand the matter to state court. ISE in March fired Fegan, the president of its NBA player practice division. The agency is expected to ask a state court judge to place a preliminary injunction on Fegan, which would prevent him from competing in the sports business. Fegan had been under a state court temporary restraining order, but the agent moved the legal action to U.S. District Court, arguing it was a federal matter because only the NBPA could stop an agent from working in the sports business under federal labor law. ISE argued that its employment agreement with Fegan, which included a provision that he not compete with the agency during the term of the deal, was a state court matter. Birotte noted that although the injunction ISE is seeking could hurt his ability to act as an agent, Fegan did not make the case that the federal law trumps state law. "It does appear likely that enforcing the non-competition agreement would hamstring Fegan’s ability to carry out his duties as an agent," Birotte wrote in his decision. "But this does not change the fact that ISE’s claim against Fegan is founded on ISE’s state law contractual rights." Birotte noted that the federal labor law Fegan was citing was only relevant if the legal issue was founded directly on the rights created by a CBA. "Here, the right ISE is suing upon -- Fegan’s promise, in [his agreement with ISE] to not compete with ISE in specified ways -- does not exist as a result of the CBA," Birotte wrote. A spokesperson for Fegan would not comment on whether Fegan would appeal the decision. The matter is now expected to be heard by California Superior Court Judge Amy Hogue, although a hearing date had not been set. ISE is also pursuing its other claims against Fegan in two separate arbitrations, as required by his employment agreement.