Hardly a transfer deal in professional football is concluded without the involvement of players' personal agents. Professionals in other areas of sport, and even lower-ranking athletes, are using the services of a "personal manager" too. These advisers, who are often called "managers" or, in team sport, "players' agents", represent their sports clients in negotiations with the clubs, promoters and sponsors. However, depending on the scope of their actions, the legality of what they do can be dubious. Whether and in what form the non-legal advising and placement of athletes is permissible depends, in essence, on compatibility with the following laws:
* Code of Social Law III (Sozialgesetzbuch, SGB III) (1)
* Act on Rendering Legal Advice (Rechtsberatungsgesetz, RBerG)
* Civil Code (Burgerliches Gesetzbuch, BGB), in particular [section][section] 312 and 355 ff. (2)
* Trade Regulations (Gewerbeordnung)
2 Licence to act as players' agent no longer required
The liberalisation of the labour market in 2002 also brought about considerable changes for the profession of players' agent.
According to [section] 291 Para. 1 SGB III old version, a licence was required for player agency unless one of the exceptions listed in [section] 291 Para. 2 applied. In the field of professional sport, player agency is the placement of those seeking work or employment. [section] 291 Para. 1 SGB III old version was abolished with effect from 27 March 2002.
Nowadays, any natural or legal person can set up as a private employment agent and offer the corresponding services without a special licence.
[section] 292 SGB III only provides for the possibility of introducing compulsory licensing in the area of international placement, whereby the Federal Ministry of Economic Affairs and Labour can decree by Statutory Order that international placement for certain professions and activities is the reserve of the federal labour office, the Bundesagentur fur Arbeit. The purpose of this authorisation by decree is to place restrictions on international placement when such restrictions are necessitated by labour market conditions.
Although the federal legislature has not yet made use of this authority. (3) Thus private employment agents no longer require a licence to engage in placement activities from and to other countries, which again is a far more liberal arrangement than under the old legal situation. According to [section] 292 Para. 2 SGB III old version, employment placement outside the European Union or an EMU contracting state required a special licence from the federal labour office, the Bundesanstalt fur Arbeit, which could only be issued subject to strict criteria. This licensing requirement was also abolished with effect from 27.03.2002.
However, compliance with the obligation pursuant to [section] 14 Trade Regulations (Gewerbeordnung) to notify the competent industrial inspection authority continues to be mandatory. Such notification is likewise required under [section] 14 Para. 1 (2) if the business is relocated, the object of the business is changed or the business is discontinued.
If the intended activity does not qualify as a trade (for instance in the case of job placement by public-law bodies without a profit motive (4)), no trade registration is required (5).
Sanctions may be imposed under the Trade Regulations (Gewerbeordnung). For particularly serious breaches of the rules on job placement, the most severe penalty is a prohibition of gainful economic activity, [section] 35 Gewerbeordnung.
A players' agent must be prohibited from engaging in gainful economic activity in the event of his untrustworthiness pursuant to [section] 35 Para. 1 Gewerbeordnung. The notion of untrustworthiness is a vague legal concept. If the trader is to be deemed untrustworthy, the competent authority no longer has any discretionary authority and the trader must be banned from gainful economic activity. …