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“Any prospective agent whose application for certification is denied may appeal that denial by filing
a timely demand for arbitration . The arbitration procedure incorporates by reference the Voluntary Labor Arbitration Rules of the American Arbitration Association, and includes the right to be represented by counsel, to cross-examine the Committee’s witnesses, to present testimonial and documentary evidence and to receive a transcript . The arbitrator is empowered to order certification if he determines, based on the evidence, that the Committee did not meet its burden of establishing a basis for denying certification . The arbitrator’s decision is final and binding on all parties and is not subject to judicial review . The NBPA’s selected arbitrator, George Nicolau, is experienced and highly qualified in handling labor relations in the sports industry . He is currently the chairman of the arbitration panel for the Major League Baseball and the Major League Baseball Players Association and the contract arbitrator for the Major Indoor Soccer League and Major Indoor Soccer League Players Association . The NBPA player representatives of each NBA team approved the Regulations which became effective on March 7, 1986 .
After unilaterally promulgating the Regulations, the NBPA obtained, in arms length collective bargaining, the NBA’s agreement to prohibit all member teams from negotiating individual player salary contracts with any agent who was not certified by the NBPA .
Collins was an agent for several NBA players from 1974 until 1986 . Collins applied for and received certification in 1986 soon after the Regulations took effect . In late 1986 or early 1987, he voluntarily ceased functioning as a player agent because of a lawsuit filed against him by a former NBA player client, Kareem Abdul-Jabbar, the former center of the Los Angeles Lakers, but retained his certification . Collins said he would not resume agent activities until he was exonerated of all charges in the pending lawsuit . In that case, Abdul- Jabbar, together with Ain Jeem, Inc . a corporation Abdul-Jabbar had established, alleged that Collins had committed numerous serious breaches of the fiduciary duty he owed as an agent to Abdul-Jabbar .
The alleged breaches included mishandling of Abdul-Jabbar’s federal and state income tax returns which caused Abdul-Jabbar to pay approximately $300,000 in interest charges and late penalties; improvidently investing Abdul-Jabbar’s money; mismanaging Abdul-Jabbar’s assets; and transferring funds from Abdul-Jabbar’s accounts without permission to the accounts of other players who were also Collins’ clients . Collins’ certification was revoked because he failed to pay agent dues and failed to attend at least one agent seminar as required by the Regulations .
Collins submitted an application to be recertified as a player agent . His application noted that there was still pending against him another lawsuit filed by another NBA player, Lucius Allen, and that eight of his former player clients—Abdul-Jabbar, Alex English, Lucius Allen, Rickey Sobers, Terry Cummings, Ralph Sampson, Rudy Hackett and Brad Davis—had discharged him by the end of 1986 .
By letter dated December 14, 1990, the Committee issued its decision denying Collins certification as a player agent . The letter explained that based on the allegations against him by Abdul-Jabbar and the information gathered by the Committee, the Committee concluded that Collins was unfit to serve in a fiduciary capacity on behalf of NBA players and that he made false or misleading statements to the Committee concerning a relevant subject in connection with the investigation into his application . Specifically, the Committee found: (1) Collins violated fiduciary duties to his former client Kareem Abdul- Jabbar and Ain Jeem, Inc . in his preparation and filing of federal and state tax returns, causing penalties and interest in excess of $300,000 to be imposed on Mr . Abdul-Jabbar and the corporation . (2) In handling the financial and business affairs of Mr . Abdul-Jabbar and other players, Collins acknowledged commingling funds from one account to another without authorization and resulting in losses of over $200,000 to Mr . Abdul-Jabbar . (3) Collins ignored requests by Mr . Abdul-Jabbar to invest money in safe investments, and invested in speculative ventures, many of which produced negative investment results . (4) In December 1985, Collins converted a corporate indebtedness of approximately $290,000 into a personal obligation of Mr . Abdul-Jabbar’s without his approval . He also caused Mr . Abdul-Jabbar to execute loan documents relating to several investments making him jointly and severally liable for repaying loans . (5) Collins told the Committee that he had not filed his own Federal income taxes for the four year period 1986 through 1989 (even though he admitted earning over $300,000 in 1986) . (6) Collins falsely represented to the Committee that Mr . Abdul-Jabbar paid $300,000 of Collins indebtedness to the Bank of California in connection with settling a lawsuit filed by Mr . Abdul-Jabbar and Ain-Jeem against Collins .
