Illinois Becomes 43rd State to Pass Athlete-Agent Regulatory Legislation

After Governor Pat Quinn signed the Illinois Athlete Agents Act into law on July 14, Illinois became the 43rd state to adopt athlete-agent regulations. “This new law will protect young athletes as they move forward in their careers,” Governor Quinn said in a press release. “By working with the Uniform Law Commission on this legislation,” she continued, "we are making sure that our laws are consistent with those throughout the country.”

The new legislation comes at a time when agents are under increased scrutiny for a number of highly publicized and negative incidents involving student-athletes. Recently, during a press conference at the SEC Media Day, University of Alabama football coach Nick Saban characterized unscrupulous agents who prey on student-athletes as no better than “pimps.”

The Illinois Act

Like statutes in several other states, the Illinois Athlete Agents Act regulates registration and conduct of agents for athletes. Once the law goes into effect on January 1, 2011, athlete-agents in Illinois will have to register with the Department of Financial and Professional Regulation. The Department will be responsible for both licensing agents and investigating unlicensed activity.

The Act has several provisions that regulate an agent’s relationship with the student-athlete. Under the Act, agents are prohibited from inducing a student-athlete to enter into a contract by furnishing items of value to the student-athlete or the student-athlete’s family.

The Act also requires agents to notify student-athletes that signing an agency contract for a particular sport may jeopardize the student-athlete’s eligibility in that sport at the interscholastic level. Additionally, agents must inform student-athletes that he or she may cancel an agency contract within 14 days after signing it. Moreover, the Act also requires agents to notify the athlete’s school within 72 hours of signing an agency contract or before the athlete’s next athletic event.

Penalties

The Act carries stiff penalties for agents who fail to comply. First-time violators of the Act will be charged with a Class A criminal misdemeanor and subsequent offenses will constitute a Class 4 felony. A Class 4 felony conviction in Illinois is punishable by up to three years in prison.

Violators also face a civil penalty of up to $10,000.

The Act also provides a right of action for educational institutions that suffer damages as a result of the agent’s violation of the Act.

Uniform Athlete Agents Act

The Illinois Act is a variation of the Uniform Athlete Agents Act (“UAAA”) that has been implemented in 39 states. While the requirements of the legislation vary slightly by state, the UAAA provides important rules regarding agent licensing and conduct and outlines penalties for violators. The UAAA was drafted in the fall of 2000 by the National Conference of Commissioners on Uniform State Law with input from the National Collegiate Athletic Association. The push to adopt the UAAA in other states continues. Proposed legislation currently is pending in California and New Jersey.

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As the sports business continues to grow at unprecedented rates and as more and more athletes command multi-million dollar contracts and marketing deals, the role of the sports agent is likely to be under increased scrutiny. We expect more regulations on the conduct of sports agents and greater efforts to enforce existing state legislation.

Sports agents must be vigilant in their compliance with the myriad of state legislation. Jackson Lewis will continue to monitor the growing body of athlete-agent legislation and any developments in this increasingly complicated area of the law. We work with agencies to develop compliance programs that help their agents avoid the stiff penalties in the various statutes.