Zion Williamson Beats Former Marketing Agent in Court Spat
While his team was recently swept out of the first round of the NBA playoffs by the Oklahoma City Thunder, New Orleans Pelicans forward Zion Williamson is at least a winner in court.
The U.S. Court of Appeals for the Fourth Circuit Monday affirmed Williamson’s trial court victory against his former marketing agency, Prime Sports Marketing, and its president, Gina Ford. The case concerns whether Williamson, who was selected first overall in the 2019 NBA draft, counted as a student-athlete for purposes of the North Carolina Uniform Athlete Agents Act when he signed a five-year marketing representation contract with Prime as a Duke freshman in April 2019.
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Writing for a unanimous three-judge panel, Judge Albert Diaz concluded Williamson, who had already declared for the draft, was a student-athlete. That designation meant Prime was obligated under state law to include a warning in the contract that Williamson would lose eligibility to compete as a student-athlete by signing. Since the contract failed to include that warning, Williamson was authorized to void the contract. U.S. District Judge Loretta Copeland Biggs reached the same conclusion in 2022, when she granted summary judgment to Williamson.
Prime’s appeal, Diaz explained, essentially boiled down to one question: Who counts as a “student-athlete” under North Carolina law? The state’s law defines a student-athlete as:
An individual who engages in, is eligible to engage in or may be eligible to engage in any intercollegiate sport. If an individual is permanently ineligible to participate in a particular intercollegiate sport, the individual is not a student-athlete for the purposes of that sport.
Prime maintained Williamson failed to meet these standards because even though he was “engaged in” an intercollegiate sport, he should have been deemed “permanently ineligible.” Williamson allegedly violated NCAA rules concerning pay-for-play payments by signing with an unauthorized agent.
Among the problems with Prime’s interpretation, Diaz explained, is that the second sentence of the definition concerns athletes engaged in two sports, which was not true of Williamson and thus didn’t apply to him.
Diaz was also unpersuaded by Prime’s arguments that Williamson’s rule violations would have rendered him “permanently” ineligible to play at Duke. For one, he was eligible. For another, even if the NCAA investigated and found that Williamson broke rules, there’s no guarantee the NCAA would have permanently banned him.
“Prime,” Diaz stressed, “ignores that the NCAA eligibility requirements are discretionary.” In other words, even if the NCAA determined that Williamson violated rules, it might have deemed him temporarily ineligible—which, for purposes of North Carolina’s law, would have still protected him.
Diaz was similarly unmoved by Prime’s claims that Williamson engaged in fraud and misappropriated trade secrets.
The fraud claim stemmed from Williamson allegedly concealing that he “planned to send copies of Prime’s marketing strategy to CAA,” whom Williamson would later hire as his representation. Prime maintained Williamson had a fiduciary duty to reveal this plan. Diaz disagreed, stressing the agency relationship between Williamson and Prime was void. The judge also wrote there’s no case precedent that would have compelled Williamson “to disclose that he’s negotiating with a third party in a commercial transaction” when “the underlying relationship between the parties is illegal.”
Diaz also rejected the trade secrets claim. Prime argued it shared with Williamson its plan that he be pitched as “the First Zion Williamson” rather than “the next LeBron James.” It also developed what it termed a “1+1=3” formula wherein marketing opportunities for Williamson should yield triple the value. In her 2022 ruling, Judge Biggs didn’t find these concepts so innovative that they warranted trade secret status. Diaz expressed a similar viewpoint, adding much of what was shared could have been found independent of Prime.
The ruling is a win for attorney Zack Tripp and his colleagues from Weil, Gotshal & Manges LLP as they represented Williamson in the litigation.
In a separate case in Miami-Dade County Circuit Court, Prime is suing Williamson for breach of contract, tortious interference and other claims that allegedly caused $100 million in damages. Last year, Judge Alan Fine granted Williamson summary judgment.
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