IMG suing former junior agent who defected to CAA (WSJ)

By Nancy Tartaglione

Highlighting California's unique and long-established judicial stance against contracts that limit an employee's ability to compete against a former employer is a court case involving CAA and IMG Worldwide over a sports agent's defection from the latter to the former. The litigation came about when a $90,000-a-year junior agent named Matthew Baldwin left for CAA last month, explains The Wall Street Journal. IMG alleges in its suit against Baldwin that not only is he violating a non-compete clause, but that he took some 7,000 confidential files.

CAA, says the Journal, has "raided IMG of agents and top executives in an effort to challenge IMG's primacy in sports." In the process, stars have followed.

IMG lost Derek Jeter when agent Casey Close jumped ship and moved to CAA. It also lost football's Tony Gonzalez and LaDanian Tomlinson when agent Tom Condon moved to CAA from IMG.

Baldwin denies IMG's allegations, contending that what he took from his laptop was personal. Further, Baldwin, who was part of IMG's team in Minneapolis, has moved to California, where he says state law makes IMG's non-compete clause unenforceable.

IMG says it's suing to mitigate the damage from the loss of trade secrets and proprietary information. "If they want to be in the businesses we are in they should start their own," Jim Gallagher, a spokesman for IMG, told the paper "They can't hire our junior agents in an attempt to steal our clients, our trade secrets and our clients' confidential information."

Jeffrey Kessler, a lawyer for CAA, told the paper that the agency has the right to hire at will and that California law doesn't allow employers to prevent their former employees from making a living in whatever industries they choose. CAA itself is not named in the litigation.

The early language of the California statutes preventing restraints on employment dates to the 19th century. Should Baldwin prevail in the case, CAA - or any company - would have a playbook to follow when hiring a rival's employee and trying to negate non-competition provisions in a contract, notes the Journal.

The Journal has more on the ins and outs of the case.