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Tuesday, April 08, 2008
 
Kansas, You Need to Play Hardball Now

It hasn't even been 24 hours since Kansas won the national championship and Bill Self is already talking about his contract situation -- and one that still has four years remaining on it! In an interview after the game last night, Self told ESPN that he wouldn't rule out listening to an offer from Oklahoma State: "That's my alma mater. I know people down there. But they haven't contacted me." Although Self signed a five-year contract extension last season that increased his annual compensation to more than $1.3 million with a chance to make another $350,000 each year if he meets incentives, Self told ESPN after the game that he needs to talk to KU athletic director Lew Perkins: "I want to visit with my athletic director. To be real honest with you, I love Kansas. I love my job here, and hopefully it will be a situation where I can spend a long time here. I'm certainly not looking to leave, but Lew and I got to visit. I'm sure that'll happen in the next couple days."

Enough is enough! It's time to play hardball, Lew. Tell Self that you're going to hold him to his 5 year commitment he signed last year. Tell him that if he leaves for OSU, a lawsuit will be immediately filed against both Self (for breach) and OSU (for interference with contractual relations) seeking a negative injunction preventing Self from signing with OSU. Having just won a national championship bolsters a claim of irreparable harm to KU necessary for injunctive relief, in other words, that money damages are inadequate and not ascertainable. Self may be feeling like he has a leg up on you because his contract doesn't contain a buyout provision. But ironically, the fact that Self's contract does not have a liquidated damages clause if he terminates would support a claim for injunctive relief. Moreover, courts are most likely not going to be sympathetic to Self who is already handsomely compensated. The timing is right, and KU is ideally situated, for an eager court to throw a wrench into this rapidly moving carousel of college coaches.





52 Comments:

Tell me you didn't just make the "handsomely compensated" argument?

Anonymous Anonymous -- 4/08/2008 10:57 AM  


If Kansas weren't paying slave wages he'd have no need to look elsewhere. :)

Blogger Mark -- 4/08/2008 11:04 AM  


Could not agree more with this post. Enough IS enough already. Will Kansas have enough guts, will its AD have enough guts....will its President have enough guts to say, "No."

Anonymous Anonymous -- 4/08/2008 12:26 PM  


The problems is that Kansas will not want to keep a coach that doesn't want to coach there, if that is the case. I understand you are just trying to make a point and may not actually advise them to follow through on an interference action, but it does not appear that OSU has committed any actual interference with the Self/Kansas contract. Even if Self does end up leaving, it sounds like it will be on his own accord. Also, isn't OSU allowed to merely offer a better option to Self?

Blogger cooleystudent333 -- 4/08/2008 12:59 PM  


You don't think that contract has a buyout? There won't be any lawsuit because if Self leaves Kansas for OSU, one of two things will happen:
1) Self's contract has an express buyout, OSU (via T. Boone Pickens) pays the buyout.
2) In the highly unlikely event that Self's contract has no provision for any sort of buyout, he'll leave, Kansas will threaten (maybe even file) a lawsuit, and Self will settle with Kansas and pay them a buyout (via T. Boone Pickens).

You want to stop the coaching carousel, the key is bigger buyouts that would make it financially impossible for coaches to leave prior to their contracts being up.

Anonymous Taco John -- 4/08/2008 2:58 PM  


Anon 10:57,

Nice catch! I was hoping somebody would notice that one.

Cooley,

You make a great point about keeping an "angry" coach. I just had this discussion with two of my colleagues. Do you really think that if Kansas threw another million at Self, he would perform his duties better than he otherwise would if Kansas doesn't pay him more? Would Self just not recruit as well this year? Would he slack off during March Madness next year? I just don't buy into any of that.

Regarding the interference claim, you're right that it's very fact intensive, and for purposes of this discussion it's all hypothetical. But I would add that there is precedent for establishing interference claims based on luring, i.e. making contractual offers to those under existing contract, and the claim can even be stronger when it involves a competitor entity. OSU, in the same conference with Kansas, obviously competes with Kansas.

Taco John,

I don't think there is a buyout in the contract (unless they added it in the amendment last season because I know there isn't one in the original contract). But I don't completely disagree with what you are saying. In my post last week, I discussed whether large buyouts will keep coaches from jumping ship, and I said at some point the economics become such that a large enough buyout will prevent the coach from jumping. And there's no question that Kansas, in your hypothetical, could obviously choose to settle a lawsuit if it files one. So in essence the settlement ends up being the equivalent of a buyout, but maybe Kansas would demand too much and Self (i.e. T. Boone Pickens) wouldn't pay that amount. In which case the court grants the injunction and Self stays at KU bound by his 5 year deal.

Blogger Rick Karcher -- 4/08/2008 3:16 PM  


Just to play devil's advocate...why should Coach Self be punished for accepting a more financially lucrative job when the very players he coaches do the exact same thing when someone whispers in their ear that they will be a first round draft pick if they declare themselves eligible? Many players turn their backs on their team at the first sign of green paper.

That argument aside, it is often necessary for coaching contracts to be structured in such a way that when a player signs with a university he is given assurance that his coach will be there for four seasons. In other words, it is rare (I think) for a coaching contract ever to have less than four years remaining on it. Renegotiations happen frequently for recruiting purposes more than anything, even though players are supposed to be committing to a program....not a coach. If coaches don't agree to extensions, and allow their contracts to slip under four years remaining, they may run the risk of hurting their recruiting efforts.

Like the players they coach, coaches should be free to seek employment with any university they so desire. If OSU wants to overpay....and I mean way overpay....Coach Self, then so be it. Put yourself in Coach Self's shoes. If another school offered you almost 5x the money you are making now, would you let an employment contract stand in your way? Maybe...if the buyout clause was outrageous I suppose.

Anonymous Anonymous -- 4/08/2008 4:12 PM  


Bill Self basically recruited Illinois' entire team that Bruce Webber took to the championship game in 2005. He has some coaching skills, and should be applauded.
http://chicago-sportschat.blogspot.com/

Anonymous Terry -- 4/08/2008 4:38 PM  


Everyone really ought to stop arguing morality here. This is a contract issue. The reason that college coaching salaries are completely out of control is that no university or athletic director has any guts at all to put their own neck on the line (other than WVU it appears). It is much easier to fire a coach (but paying them hundreds of thousands of dollars for, let's say, the next five years). For that matter, faculty are powerless (so it seems) and the AD runs a ship separate from the university entirely (talking about the bigger programs). Myles Brand hides behind the "we are voluntary, non-profit organization" while coaches are laughing at everyone. Karcher is right: someone end the March Madness, so to speak, and someone take charge because the NCAA and its member institutions (as a whole) cannot control themselves from themselves.

Anonymous Anonymous -- 4/08/2008 5:00 PM  


Anon 4:12,

I don't understand the analogy to college players at all. College players sign letter of intent that serve as one year contracts, and they are bound by NCAA transfer rules that are essentially incorporated into the LOI. I hope you're not suggesting that the NBA tortiously interferes with a scholarship when the player gets drafted.

But the answer to your question as to why a coach shouldn't just be free to go to the highest bidder is simple -- it's based on contract law principles. The coach is bound for a term of years, and he's liable for breach of contract if he terminates early. If the contract has a liquidated damages clause (i.e. a buyout), the coach and the school have simply agreed at the outset what the damages will be in the event the coach breaches. If there is no buyout, then it's just a question of how much the damages are. If the school can prove that money damages are inadequate, then the school is entitled to injunctive relief to prevent the coach from signing with another school.

This isn't a matter of putting yourself in anybody's shoes. I'm merely suggesting that Kansas hold Self to his contract. The only argument I've heard thus far that anybody has presented for Kansas not holding him to his current contract is the "angry coach" concern -- which isn't very compelling to me.

Blogger Rick Karcher -- 4/08/2008 5:56 PM  


Rick,

I think the other thing stopping them is what stops a lot of other folks in the athletic (and other) business enterprises. If they play hardball, then they won't be able to go poach coaches themselves when they need them.

If every coach were theoretically forced to honor his/her contract in full, then the only coaching changes these schools (or pro teams) could make would be finding someone who wasn't currently a head coach.

Kansas took Self away from his previous job at Illinois. They'll want to keep that option open for their football and other programs as well. If they hold his feet to the fire, they're opening themselves up to hypocrisy and potential blackballing.

Anonymous Law Student -- 4/08/2008 10:31 PM  


If the NCAA truly viewed this as a problem it could implement something similar to NFL which requires compensation if a head coach under contract leaves to take another job. Instead of compensation however it could require the school signing the coach to forfeit scholarships. If OSU was required to lose 3 scholarships for a period of 4 years there is no way Self would take the job. Coaches value having a full contingent of scholarships as much as they value money. Just like with NFL however, if an assistant leaves to take a head coaching job then there is no compensation/punishment.

Blogger wayne -- 4/08/2008 11:04 PM  


I understand your point, but I couldn't disagree more. If someone wants to leave, they set a bad precedent for themselves by keeping them there. You would have:
1) A coach who may not have his heart in the job, and is almost guaranteed to leave at the end of his contract.
2) Hampered recruiting in the later years, because the players know the coach will not be there after 1-2 years, and most players pick their school b/c of the coach.
3) A disincentive to keep the APR score above the limit to keep all 12 scholarships, because they'd be gone before it really happened.
4) A negative influence on possible future coaches. A school with Kansas's rep may be able to get away with it, but a mid-tier school (and bad power conference schools) would have a lot tougher time getting coaches to take their jobs.
5) A nasty PR battle that the media pundits would spin as a negative against Kansas (who do you think that Digger, Dickie V, Bob Knight, etc. would back up? I'm guessing their coaching pal).

Looking at all of the evidence, there's a reason why no college (before WVU) has really tried to fight their coach for leaving. It's a losing battle, PR wise and team wise.

Anonymous Anonymous -- 4/09/2008 12:13 AM  


This comment has been removed by the author.

Blogger Rick Karcher -- 4/09/2008 6:28 AM  


Wayne,

Good suggestion. But that would most likely be viewed as a restraint on trade and Law v. NCAA wouldn't permit it.

Law Student and Anon 12:13,

Hypocrisy or blackballing? Setting bad precedent? I don't understand your point. If Kansas were to refuse to negotiate with Self right now, there's no hypocrisy if Kansas were to sign somebody to fill a head coaching position in another sport for which it has an opening -- AND paying top dollar for that coach. That's called competition. But if the coach that Kansas wants is currently under contract, and that contract does not have a buyout clause, that coach's school can do one of two things: 1. Throw more money at him; or 2. Hold him to his contract.

The notion that the coach "may not have his heart in the job" or might be "angry" if the school elects number 2 is just not persuasive. You mention a concern that, if the coach is "angry", recruits are going to think the coach is going to leave the following year. Think about the irony here. The situation you have now is that recruits have no idea when a coach is coming or going. You're advocating that coaches not be held to their contracts. But if they ARE held to their contracts, then the coach is LESS LIKELY to be leaving for greener pastures anytime soon.

Another concern mentioned is that the coach would be guaranteed to leave at the end of his contract if the school doesn't do number 1. This sounds very similar to the angry coach concern, in other words, that the coach is going to hold it against the school years from now for not renegotiating right now. You're assuming that, years from now when that time comes, the coach is going to be as desirable or marketable (or possibly more desirable or marketable) than he is today. There is a very good chance that he won't be, but if he is, at that point you pay the guy what he's worth (or even slightly above market), in which case he's not going anywhere else. If he does go elsewhere, so be it.

Bad PR if the school doesn't renegotiate? -- give me a break! Why would there be bad PR for refusing to throw more money at a coach? Digger, Dick V. and Knight are not going to say, "that mean and nasty school wouldn't renegotiate." And if they do, who cares? These days, the PR is bad no matter what you do, so you can't make decisions based upon what the press and commentators may or may not say. I actually think the school looks better if it doesn't renegotiate -- shows that it honors commitments, has principles, and demonstrates fiscal responsibility.

Finally, you're mistaken about your last statement regarding WVU. WVU is in a unique situation because the buyout simply isn't being paid. When a coach leaves and the buyout is paid (which usually happens), the school has no claim.

And it's not a losing battle (as you suggest) -- because you can't lose a battle if you choose not to fight to begin with. Maybe if schools starting fighting, they would win the battle.

Blogger Rick Karcher -- 4/09/2008 6:31 AM  


College coaches and their agents are loving all of this. Until someone says enough is enough (including faculty who have been nullified in this whole process) the numbers will keep going up and up and decades from now we will still be told, "it's an arms race" but no one will do anything about it.

Anonymous Anonymous -- 4/09/2008 7:31 AM  


I can hear Vitale's incoherent rant about this in my head right now--"Oh. come on Kansas, He's a great coach! He's got to be able to get more money, Baby! You shouldn't stop him from doing that, Baby!" (never mind that his annual salary is higher than that of, say, the entire English department).

So, KU would lose the battle with Vitale and his ilk, who worship at the altar of the coach. But I think the rest of commentariat would loudly applaud.

Blogger Howard Wasserman -- 4/09/2008 7:38 AM  


"never mind that his annual salary is higher than that of, say, the entire English department"...you mean the entire college of education, including the Dean.

Anonymous Anonymous -- 4/09/2008 7:50 AM  


No court is going to force an employee to remain employed if he doesn't want to be. A term agreement primarily protects the employee, not the school. If you know a case, after the Dredd Scott decision, where an employee was enjoined from quitting from his job, please direct us to it.

I just don;t understand the outrage here. Had Kansas missed the tournament this year, you can bet Kansas would have fired him and would be trying everything to get out of paying him (see, e.g., Jessie Evans at USF).

Anonymous Anonymous -- 4/09/2008 9:32 AM  


Anon 9:32

I don't think anyone is arguing that a court would force him to remain at the job. If you re-read the initial post and commentary, the argument is for a negative injunction precluding/preventing him from signing with another school. Like it or not, that is a legitimate remedy available.

And, are you really arguing that a school isn't protected by signing a coach to a long term deal. By inking such a deal, the school is buying their security that they will have a well qualified coach in place without worrying about whether a coach will or won't leave at the end of the year (not that we aren't in that spot with the way things currently stand).

Anonymous Anonymous -- 4/09/2008 10:28 AM  


....and the salary of the President and Provost of the University, too.....

Anonymous Anonymous -- 4/09/2008 11:50 AM  


Anon 9:32,

There's no "outrage" here. And this isn't a debate about how much a coach should get paid, or freedom to work for a willing employer, or anything along those lines. It's about the fact that these coaches are not at-will employees; if they were, we wouldn't be having this discussion. An employment contract doesn't work one way -- it has mutual obligations. The coach is obligated to work for the school for the term of the contract. That may SEEM strange, and that's probably because we are so brainwashed by the current environment in which everyday we read about a coach leaving for a more lucrative deal.

If Kansas fired Self for not making the tournament (as you suggested), Kansas would be breaching the contract and Self would have a remedy in accordance with the parties agreement in the event the school terminates him without cause. But to make a more appropriate analogy. When the coach has a bad year, what if the school said to the coach, "let's talk about a reduction in your compensation because I received an offer from another coach at a different school." Now it's on the other foot. Should the coach renegotiate in that situation? Absolutely not.

Coach and School sign a five year deal, with annual compensation that increases each year, and which even contemplates payment of a HUGE bonus for winning a national championship during the term. Team wins a national championship in the first year of the contract, School pays HUGE bonus, and Coach after the game says "we need to talk about a renegotiation." Shouldn't the natural response here be that the coach and the school have already agreed that the coach would be compensated for winning a national championship, including exactly how much he would be compensated?

Blogger Rick Karcher -- 4/09/2008 1:00 PM  


How exactly does "taking a stand" and going through legal action HELP the university of Kansas? More often than not, he was going to be given a raise anyway...that is just how big-time sports work, regardless of whether that is right or wrong. Bill Self also went on to say that he was looking for "years" which leads me to believe that he isn't looking for money. He wants job security in writing.

Anonymous Anonymous -- 4/09/2008 1:01 PM  


I just don't see the irreperable harm to Kansas that would justify injunctive relief. They have the right to provable damages, that's about it. I'm not aware of any court that issued injunctive relief to prevent someone from working just because they signed a term agreement with another employer. If there is such a case, please direct us to it.

Similarly, if Kansas breached the agreement by firing Self, he would likely have little successgetting injunctive relief preventing the university from hiring another coach.

Blogger John R. -- 4/09/2008 1:15 PM  


All it takes is ONE just ONE A.D. or University to say "enough is enough" and that the coach must honor his or her contract. Have faith: that will send shock waves throughout the system and coaches might actually feel that signing a contract actually matters. The college Presidents need to take control of this rather than cater to Boosters like Phil Knight, T-Boone, etc.

Anonymous Anonymous -- 4/09/2008 1:20 PM  


John R.

What are the "provable" damages that the school would suffer. Seems that there is a great unknown in proving what those damages would/will be? Should the school fire Self, however, seems that his damages are readily provable. Hence, there could very easily be a different outcome depending on who was seeking an injunction.

Perhaps, KU could just go out and hire the great coach for an amount above and beyond what they pay Self and then seek to hold Self liable for this extra amount? Might be a mitigation argument, but Self is now arguably one of the best coaches out there. To replace him would require Kansas to pay dearly for a same/similar coach. Perhaps this might be a reason to want to "buyout" clause if you are a coach.

Anonymous Anonymous -- 4/09/2008 1:37 PM  


Anon (1:37 PM) --

You are exactly right. For the school to prove damages in these cases is all but impossible. That's why these contracts contain buy-out provisions. As any employment lawyer will tell you, "term agreements" are primarily to the benefit of the employee, not the employer for this very reason. Courts are not going to enjoin the employee from quitting and taking another job, and establishing damages is very difficult.

That being said, I wouldn't feel too badly for these schools. The vast majority of these coaching contracts are heavily slanted in the school's favor. If they fire the coach without cause, the coach only gets a fraction of his income for the rest of the term, and he is required to mitigate. And their "for cause" definitions are getting increasingly broad.

Blogger John R. -- 4/09/2008 1:50 PM  


What about the idea of nicluding a non-compete agreement in coaches contracts?A broad one might be arguably unenforceable depending on what state you are in. But lets assume that you are in a major conference and would want to prevent a coach from hopping to another conference school? Perhaps this might be narrow enough for even the most stringent states to enforce this provision?

Anonymous Anonymous -- 4/09/2008 2:02 PM  


John R,

There's a lot of confusion here. The negative injunction does not prevent the employee from quitting. He's not being required to work; he just can't go work for the competitor.

You are mistaken about injunctive relief in the sports arena. There are numerous cases in which courts have granted injunctions preventing players from jumping ship on the grounds that they have special and unique skill. The same argument would be made with coaches, and if you want a specific case, see New England Patriots Football Club, Inc. v. Univ. of Colorado, 592 F.2d 1196 (1st Cir. 1979).

The reason a coach is not entitled to injunctive relief when the school breaches is because there is no irreparable injury/inadequate remedy at law -- the coach gets the amount he would otherwise be paid for the remainder of the contract term. If the coach breaches, the key question is whether the school can show irreparable injury/inadequate remedy at law. The "difficulty" in determining damages is not the issue -- juries decide that all the time. The irreparable injury element is met in personal service contracts when the employee breaches by establishing that "the same service could not easily be otained from others." Philadelphia Ball Club v. Lajoie.

Also, when the coach is fired without cause, coaches contracts often provide that the coach gets his salary for the remainder of the term. I'm not sure of the basis for your statement that "the vast majority of these coaching contracts are heavily slanted in the school's favor."

Blogger Rick Karcher -- 4/09/2008 2:34 PM  


No confusion. Just no guts. Who will be the first to have guts and say, "no".?....sadly, probably nobody...

Anonymous Anonymous -- 4/09/2008 2:44 PM  


The basis is that I actually negotiate these contracts for a living. And I will tell you that the compensation in these contracts is tiered into different levels: salary, media appearances, appearances, endorsement income. The salary piece is only a small piece of the overall salary, but that is all the school is on the hook for in most of these contracts. And again, the "for cause" definition has become broad enough that these have become almost "at will" agreements.

I'm not aware of any cases in which a school was able to show irreparable injury when a coach quits. And how would your plan work anyway -- a court would never force the coach to remain employed (as you admit). So, the school would get an injunction prohibiting him from taking another job, and then would hire a new head coach. Would they keep paying the coach a salary for not coaching? If not, then he is getting no pay and is not able to work to support himself. And if they would pay him for not coaching, how many schools would really do that -- particularly someone at Bill Self's salary level?

Blogger John R. -- 4/09/2008 2:55 PM  


Might Self choose to continue coaching Kansas if he were enjoined from going elsewhere? Really, that is all KU would be looking for him to do--honor his obligation to them. If KU gets the injunction, it is not looking to terminate Self (and the contract) which would make the injunction inappropriate.

Blogger Howard Wasserman -- 4/09/2008 3:10 PM  


I'm sorry but in the real world the school is not going to get an injunction. Coaches leave schools all the time for better jobs. Almost all of them had years left on their agreement when they resigfned. And yet, when was the last time a school successfully enjoined a coach from taking another job? Why do you think that is?

Think about it this way -- if I'm a high school teacher who has a multi-year agreeent with a school but I have to move to another state for personal reasons (family sickness, spouse got another job, etc.), are you really saying the school could successfully enjoin the teacher from getting another job until the contract ran out?

Blogger John R. -- 4/09/2008 3:18 PM  


John R,

With all due respect, the fact that you negotiate these contracts for a living doesn't provide a basis for WHY you believe they are heavily slanted in favor of the school. A broad for cause definition, if ambiguously drafted, could actually work to the detriment of the school. And I'm not sure that we can make generalizations that all coaches contracts are slanted in favor of either side.

Again with all due respect, this isn't "my plan". I didn't create the jurisprudence that outlines the elements for negative injunctions involving breaches by the employee in professional service contracts. But I said, see the Patriots case in which Univ. of Colorado was enjoined from hiring the Patriots' coach, Chuck Fairbanks. And the whole point here is that, if schools stuck to their guns and used the existing law as leverage when the coach goes to the A.D. demanding more money, you don't even get to court.

Blogger Rick Karcher -- 4/09/2008 3:20 PM  


John R,

There are multiple reasons why the teacher would not be enjoined. For one, the irreparable harm element is lacking. The other elements for a negative injunction (which we have not discussed) would not be met in the teacher example as well. I would discuss this issue more, but I need to go to my 5th grader's baseball game now because I'm expecting a full ride scholarship some day, and then a multi-million dollar salary so that I can retire and don't have to argue with people on blogs :)

Blogger Rick Karcher -- 4/09/2008 3:28 PM  


I believe I said the "vast majority" of coaches contracts are more favorable to the school than the coach. I don't see how an ambiguous cluase benefits anyone but the lawyers, but even if that's true, the coach would still have to sue the school to get his money and that can be a hardship. But of course, I didn't say the clause are ambiguous, I said they are broad.

I also didn't say "all" coaches contracts are slanted in favor of the schools -- please don't mischaracterize my comments. But I stand by the statement that most are.

I think the irreparable harm element will be difficult to show for the school, and in fact would be fatal to their argument. That's why you don't see coaches being enjoined. It's not that schools haven't thought of it, or are afraid to take coaches on.

Blogger John R. -- 4/09/2008 3:58 PM  


John R.

I would disagree that a vast majority of coaches' contracts are favorable to the school. In terms of liquidated damages when terminated without cause, most coaches are given very close too or more than what was promised to them under the salary, depending on the years remaining. What is more, most contracts do not require the coach to mitigate. When a coach terminates without cause, most liquidated damages provisions require the coach to pay far less than what is required to be paid by the university.

On your point about the broad "for cause" provisions, I would also disagree. They are simply becoming more detailed. This is a result of cases such as O'Brien v. Ohio St. Univ, where the for cause provision was too ambiguous, and it ended up costing the University a lot of money. Most for cause provisions include (1) major NCAA violations or a series of secondary violations by coach or he knew or reasonably should have known about the violations committed by his players or staff, (2) will and continuous breach of terms of agreement, (3) conviction of felony or crime involving moral turpitude or some other conduct bringing the school into public disrepute, (4) physical or mental incapacity or death. Most for cause provisions contain some variation of those terms, and I don't think they are any more broad than necessary.

Nevertheless, while I have not seen Self's newest contract, his contract last signed in 2006 did not contain a buyout clause, but did have a retention agreement and incentive bonuses, which only vested upon reaching certain years. His retention bonus, which was payable in 2011, was over $1M , and is forfeited if he is not the coach in 2011. As such, think a court would consider this bargained for and contemplated in regard to the coach leaving the university, and would find the parties chose the retention bonus in lieu of a liquidated damages buyout provision.

Blogger Adam -- 4/09/2008 7:03 PM  


Buyout clauses...liquidated damages....injunctions.....none of it matters when you have boosters who say, "Don't worry, I'll pay for it"...and they get out their checkbook. And once again, the coaches and agents laugh all the way to the bank while faculty and fans alike scratch their heads and say, "this is not right" or "this is unethical." All of this really addresses issues long overdue: Who runs the university, what is the role of the faculty (basically they are completely irrelevant) and most importantly who is in charge of the athletic department?

Anonymous Anonymous -- 4/09/2008 7:15 PM  


I don't think I made my earlier point clear. Understanding of course that schools or businesses have no obligation to be consistent in their positions.

But if Kansas were to hold Self to his contract, thereby taking the stand that "this deal is ironclad", and they are taking that position only a few years after luring him away from a contract he was already in, they're not really taking the stand that contracts are ironclad. Only select ones are. Ones signed with other schools? Not so much if we can get that coach in here.

Again, it's not a legal argument, more of a business/PR positioning. Take a hard line all the time, or none of the time. Not selectively. They've already chosen their viewpoint as it regards coaching contracts. They took him out of one. Hard to tell him they're not letting him out of one. At least with a straight face.

Anonymous law student -- 4/09/2008 9:41 PM  


Maybe there is hope that colleges, college Presidents, and others will take charge after all? http://cspinet.org/new/200804091.html

Anonymous Anonymous -- 4/10/2008 7:16 AM  


I'm going to try to bring this back to the point I'm trying to make with my original post. Let's say one of the boosters has a timber business and he has a 5 year contract to purchase timber from Bill for a certain price. After year one, the market price of timber increases and Bill can sell his timber to one of the booster's competitors at a higher price. If Bill went to the booster and said "we need to renegotiate our contract," the booster would stick to his guns and say no way. If Bill breached and sold his timber to the competitor, booster would get his money damages (and would not be entitled to an injunction) by way of a lawsuit or most likely settlement. One thing is for certain, there's not a snows chance in hell that booster would throw more money at Bill just because the market price for his timber went up.

If the same situation involved a contract for a piece of land, booster might say money damages doesn't make him whole. He might say I want the land because there is no other piece of land similar to the one I have a contract to buy from Bill -- this land is "unique" and so I'm going to try to get equitable relief to keep Bill from selling the land to a third party at a higher price. Again, we know for certain that booster isn't going to renegotiate the deal just because the market price went up and Bill can sell to a third party at that higher price.

The main issue isn't money damages vs. an injunction. However, I'm fairly confident that the court would grant a negative injunction, John R, because most courts would agree that a coach's services are "unique" -- there is precedent for it already. But the main question is this, why does booster (or this industry for that matter) not treat a contract with a coach the way he treats other contracts that made him a successful business man? For some reason, booster thinks he needs to pay coach market value (or whatever a competitor would pay for his services) after year one, when his contract with coach simply doesn't provide for that. My guess is that booster tends to think one or more of the following:

1. That's just the way this business/industry works (which strikes me as an odd justification because it doesn't provide either a business or legal justification); or

2. The coach will be "angry" if we don't throw more money at him (which I've already explained why I don't think it's a compelling reason at all); or

3. That the school can't legally prevent the coach from going to a competitor school (which is not true, but for some reason the school and booster elect not to pursue this route or, at a minimum, decide not to raise it with the coach as a probable course of action when the coach demands more money).

Blogger Rick Karcher -- 4/10/2008 11:04 AM  


The answer, of course, is #3. It would be very hard for a school to prove that the coach's services are "unique." The Lajoie case you cited earlier involved an athlete, that has always been treated differently by the courts (and of course the lajoie case involved a non-compete clause).

And keep in mind that even in the unlikely event that Kansas won the injunction, they would have to hire a new head coach -- and they would be doing so by hiring someone else in the middle of a term agreement. Do they really want to set the precedent of preventing coaches from leaving to take a better job?

In response to Adam, the O'Brien case was not a result of the for cause definition being too ambiguous -- it wasn;t ambiguous at all. The school could terminate him if he was founf to violate NCAA rules, they fired him before the NCAA made a determination. So, they breached the contract. And that case is one of the reasons schools are using broader for cause definitions. And as for mitigation -- every single coaching contract in pros and in college requires the coach to mitigate if he's terminated without cause, and the school is permitted to offset any other earning after the termination.

Blogger John R. -- 4/10/2008 12:29 PM  


I wish university general counsel were reading this post.

Anonymous Anonymous -- 4/10/2008 12:29 PM  


John,

You are correct about the O'Brien case, and perhaps ambiguous wasn't the correct term to use. What I meant was essentially this: Violating NCAA rules was a breach of his contract. The ambiguity was whether the breach was material, and the court found that it was not. Now, it is NCAA violations are in the for cause section as a reason to terminate the agreement. So you are correct that the for cause provisions are getting more broad. . . or as I stated, more detailed. We are essentially stating the same point in different ways.

In terms of the mitigation, saying that ever college coaches contract contains a mitigation requirement is a gross misstatement. I was surprised to discover this myself, but in fact, I would estimate that half of the NCAA contracts that I have seen do not have a mitigation requirement if terminated without cause. I, myself, am baffled as to why a University would agree to this, but for whatever reason, they do.

--Adam--

Anonymous Anonymous -- 4/10/2008 2:15 PM  


John R,

The question for injunctive relief is simply whether the head coach is more analogous to an athlete or a CEO. There is limited case law on involving coaches, but the Fairbanks case I cited says a coach is more akin to an athlete:

"If ascertainable money damages could fully compensate the Patriots, under familiar principles there would be no basis for injunctive relief. The district court, however, found that ascertainment would be difficult. It further found that Fairbanks' services were unique, and that, accordingly, the loss of his services would occasion the Patriots irreparable harm."

Blogger Rick Karcher -- 4/10/2008 2:51 PM  


I guess money isn't everything...unless KU has come up with an unbelieveable amount of money in a hurry.

http://sports.espn.go.com/ncb/news/story?id=3340309

Anonymous Brad -- 4/10/2008 4:54 PM  


The interesting question for me is what would occur if Kansas were able to get an injunction preventing Self from accepting another job. Given the 13th Amendment, they could force him to coach for Kansas, but would they have to continue to pay him for the injunction to remain in place?

Blogger John R. -- 4/10/2008 5:22 PM  


I repeat my earlier question: Why would KU need to hire a new coach? Might Self, precluded from leaving, have decided to continue coaching there? Might KU have wanted to keep him from coaching there, which is why it sought the injunction in the first place?

As for the 13th Amendment/Specific performance point, see this forthcoming article by Nathan Oman, arguing that the constitutional and non-constitutional arguments against specific performance of personal services contracts are wrong:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1114799

Blogger Howard Wasserman -- 4/10/2008 5:51 PM  


Self could decide to coach for Kansas in the face of a negative injunction, I'm just assuming he wouldn't. There will be hard feelings, and he would likely get paid either way.

Blogger John R. -- 4/11/2008 3:09 PM  


John R,

If a negative injunction is granted, why do you assume that the coach would just sit on his hands and decide not to coach? That's very unlikely. But even if he did due to "hard feelings" as you suggest, I don't understand why you say he would get paid anyways. If the injunction is granted, he can't coach for another school and if he decides not to coach for the school he is under contract with, he's in breach and doesn't have a contractual right to any salary.

Blogger Rick Karcher -- 4/11/2008 5:26 PM  


There is simply no chance a court would rule that he can't take another job and the university doesn't have to pay him during that time period. That would be tantamount to forcing him to work for the school, which is a violation of the 13th amendment. The school elected its remedy -- injunction.

Blogger John R. -- 4/15/2008 1:42 PM  


John R,

On the other hand, one could easily argue that if the negative injunction is granted, nobody is forcing the coach to do anything -- the coach can choose not to work at the school he is currently under contract with. And he could also choose to go into another line of work because nobody would be preventing him from doing that either. Prohibiting the coach from going to work for the school's competitor is limited, and it's not as nearly as egregious as you make it out to be.

An important factor in determining whether injunctive relief is appropriate is to balance the harms to the plaintiff school (if the negative injuction is not granted) and the defendant coach (if the negative injunction is granted). Note that in the Fairbanks situation, the Univ. of Colorado arguably doesn't even compete with the New England Patriots, but the court still granted the negative injunction. When it's a competitor school that is luring the coach, the harm to the plaintiff school is even more substantial than it was to the Patriots in the Fairbanks case. If the negative injunction is granted, what's the substantial harm to the defendant coach? -- He's not prevented from coaching basketball and he gets to continue to make the multi-million dollar salary (and incentive bonuses) for the number of years that HE EXPRESSLY AGREED to do. College basketball coaches under long term contracts with multi-million dollar salaries can't be analogized to the typical employment situation in which the employer is not usually entitled to injunctive relief. Again, in determining whether injunctive relief is appropriate, I think they are more analogous to professional athletes.

Blogger Rick Karcher -- 4/15/2008 9:52 PM  


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