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Tuesday, September 30, 2008
 
Just Win (or get fired for cause), Baby.


Espn.com is reporting that Al Davis has fired Raiders head coach Lane Kiffin. The news isn’t surprising, but what has caused a stir is that Raiders announced that they do not plan to pay Kiffin the remainder of the salary due under his three-year, $6 million contract. The question is, can they do this? Or, perhaps, how can they do this?

Well, the Raiders are apparently claiming that Kiffin was fired “for cause” and thus has no right to any further compensation under the contract. I have not seen the terms of Kiffin’s contract, but let’s assume that it has a broad “for cause” provision that either does not specifically define for cause or gives a non-exhaustive list of examples of what might constitute for cause. For example, let’s assume the contract says something to the effect of: “If coach is fired for cause, he shall not be entitled to any further compensation under the contract.”

So, what is the “cause” for firing Kiffin in this case? It appears that the Raiders will argue that Kiffin was fired because of the team’s poor win-loss record during Kiffin’s tenure. The Raiders finished 4-12 in Kiffin’s first year as coach and have started this season with a 1-3 record. Absent a specific definition in the contract, does a 5-15 record constitute cause? Or, stated more broadly, does poor performance of a team constitute cause for firing the team’s coach?

There is some precedent in the NFL—created in part by Al Davis— supporting the Raiders on this one. Back in 1989, Al Davis fired then-head coach Mike Shanahan after he started the season with a 1-3 record (the team finished 7-9 in Shanahan’s first year as the coach) and refused to pay Shanahan the remainder of his salary. Shanahan filed a grievance against Davis, but lost. Shanahan has received some payback, though, as his Broncos have won eight out of the last ten games against the Raiders (then again, the Raiders haven’t won many games against anyone recently).

In addition, there is a fairly recent case from the Montana Supreme Court--
Cole v. Valley Ice Garden, LLC, 113 P.3d 275 (Mont. 2005)—that addresses this precise issue and provides further support for Davis. In Cole, the owner of an American West Hockey League team fired his coach for cause after the team started its season with a 1-6 record and refused to pay the coach the remainder of his salary. The coach’s contract did not define for cause, but the court concluded that for cause means a “legitimate business reason” and “[e]ssentially connotes a fair and honest cause or reason, regulated by good faith on the part of the party exercising the power.” The court therefore held that “[d]ischarging the coach of a professional sports team which is performing poorly, despite management’s good faith efforts, is a discretionary decision related to the legitimate needs of the business and constitutes ‘cause.’

This report indicates that Kiffin may also have been fired because of insubordination, citing Kiffin's “brutal public honesty about his lack of control over coaching and personnel decisions since he was hired in January 2007.” If that’s the case, Davis’ for cause argument will carry even more weight.

So, absent specific controlling language in the contract, it appears that Al Davis and the Raiders may actually have a chance to win something this year.

Update: Espn.com has an update on Al Davis' explanation for firing Kiffin. Here's the latest:

Davis read a letter that he sent to his former coach that detailed mistakes made on and off the field by Kiffin. Davis finally concluded that he fired the coach for cause because he "disgraced" the organization, citing everything from conflicts over personnel moves to outright lies to the media.

"I don't think it was any one thing," Davis said. "It was a cumulative thing. I think the pattern just disturbed me."


Again, it's hard to analyze the issue without seeing the for cause provision in the contract, but it is clear that Davis will try to rely on a lot more than Kiffin's win-loss record in arguing that he had cause to terminate.





17 Comments:

I think the Montana Supreme Court decision is wrong. An employee is either at will or employed for a specified term. If the employee is employed for a specified term (which Kiffin was), then the rights of the employee upon termination are governed by the employment agreement, which typically states the rights and obligations of the parties upon a termination "for cause" and "without cause". In the absence of a "for cause" termination in the agreement (which would be very odd in a term employment contract), then the employer should be obligated to pay the employee for the remainder of the term. If you allow the employer to terminate the employee under these circumstances without affording the employee a remedy, it essentially amounts to "at will" employment and renders the agreed upon term of employment superfluous. If the employer wants to be able to terminate the employee under certain conditions without further obligation to the employee, then the employer needs to negotiate those provisions into the agreement.

Blogger Rick Karcher -- 10/01/2008 7:11 AM  


Going one step further: Everything that Davis complained about can be seen as Kiffin trying to make his voice heard within the organization (whom to draft, coaching staff, all aspects of team preparation--Kiffin was barred from defensive meetings). And those efforts are intended to make him more successful as the head coach (in terms of won-loss record). The notion that a head coach should just "coach the team on the field" and is prohibited, on pain of termination "for cause," for trying to influence other decisions that directly affect the team on the field, means "for cause" swallows the idea of a term-of-years contract.

Blogger Howard Wasserman -- 10/01/2008 7:53 AM  


The term "for cause" means, really, nothing. It allows an employer to fire an employee for whatever reason they deem appropriate. It essentially sends a message to the employee, "Go ahead and sue and we will let a court decide what 'for cause' means." All of the burden, then, shifts to the employee. 99% of employees will not fight back. Only those with enough capital to fight back will. Then, even if the employee "wins" the only remedy would be to enforce the agreement which the employer had agreed to in the first place. It's a clause that clearly favors any employer unless it is defined as to what constitutes "for cause."

Anonymous Anonymous -- 10/01/2008 10:12 AM  


Why would a decision by the Montana Supreme Court have any precedential value on the NFL Commissioner?

Anonymous john -- 10/01/2008 10:27 AM  


Rick--

That's not the issue raised by the potential Kiffin-Davis dispute or the Montana case. The contract in the Montana case did have a for cause termination provision. The provision-- as in the provision I assumed for purposes of discussion for the Kiffin case-- just does not define what "for cause" means. The question posed by the first part of the post was not what constitutes cause in the absence of a for cause provision, but what constitutes cause (or, more specifically, does a poor win-loss record constitute cause) when there is a for cause provision that does not define for cause.

Howard--

I'm not sure it's a fair characterization to say that "[e]verything Davis complianed about can be seen as Kiffin trying to make his voice heard within the organization" and that he was only trying to influence decisions that "directly affect the team on the field." And, even if that is a fair characterization, I think the issue is *how* Kiffin was trying to accomplish these things. It seems to me that there is a material difference on the one hand between a coach trying to lobby to draft a certain player or hire a certain coach and on the other hand a coach publicly criticizing (and lying to the media about) the owner for failing to hire that coach or player (see, e.g., Larry Brown and the Knicks)

Here's an excerpt from a letter Davis wrote to Kiffin prior to firing him:

"Dear Lane:

Over the past months, you have made a number of public statements that were highly critical of, and designed to embarrass and discredit, this organization, its players and its coaches. I left you alone during training camp in hopes that you would cease your immature and destructive campaign.

However, you continue to make public statements that are critical of the organization, its players as a whole as well as individual players. Such statements constitute conduct detrimental to the Raiders and I will no longer stand silently by while you continue to hurt this organization.

Further, your contract is quite clear that you work "subject to the direction and supervision of the General Partner" and that the General Partner has "the exclusive right to do all things, which in its sole discretion are necessary to maintain and improve the Club, the football organization and their activities."

I realized when I hired you that you were young and inexperienced and that there would be a learning process for you. Your mistakes on player personnel and coaches were overlooked based on our patience with you. But I never dreamt that you would be untruthful in statements to the press as well as on so many other issues. Your actions are those of a coach looking to (sic) makes excuses for not winning, rather than a coach focused on winning."

Granted,Davis clearly had his eye on firing Kiffin for cause when he wrote the letter, but Davis is at least complaining about actions that go beyond mere disagreements about issues that impact the team's performance.

Anon--

Your point is well taken, but I just want to clarify one of your comments. The remedy in this case would be significant-- Kiffin would get paid the remainder of his salary due under the contract (I'm not sure if that's what you meant by t"he only remedy would be to enforce the agreement which the employer had agreed to in the first place.")

Anonymous Gabe Feldman -- 10/01/2008 10:44 AM  


Gabe, yes that is what I meant. In other words, from a budgeting point of view, the employer would only be obligated for what they (should have) already planned to pay in the first place (as opposed to worrying about punitive damages).

Anonymous Anonymous -- 10/01/2008 10:51 AM  


I haven't read the Montana case, but it's pretty rare to have an employment contract that gives the employer the right to terminate for cause, and then not define what for cause means. We're discussing this issue in the context of so many hypotheticals it's making my head spin.

Blogger Rick Karcher -- 10/01/2008 1:16 PM  


John-- You are correct if you are suggesting that a Montana Supreme Court case would not be binding precedent on the commissioner. There's not much that would be binding on the commissioner in these situations. But, given that it appears to be the only case addressing whether poor win-loss record constitutes "for cause" (in the absence of a definition of cause), the commissioner might find it persuasive or at least instructive.

Rick-- I think there's only one hypothetical or unknown here (the for cause language in Kiffin's contract), though I of course concede that it's a significant unkown. The analysis would obviously be quite different if the for cause provision contains an exhaustive list of actions that constitute cause, a non-exhaustive list, or is simply a provision stating that any breach of the contract by Kiffin constitutes cause. Each of those possibilities reaise interesting issues, but, for the sake of discussion, I just picked one.

Anonymous Gabe Feldman -- 10/01/2008 2:14 PM  


No, in your post you have at least 4 hypotheticals:

1. Hypothetical one is that the Raiders will claim that he was fired for cause: "The Raiders are apparently claiming that Kiffin was fired “for cause” and thus has no right to any further compensation under the contract."

2. Hypothetical two is that Kiffin's contract has a for cause termination provision without defining what for cause means: "[L]et’s assume that it has a broad “for cause” provision that either does not specifically define for cause or gives a non-exhaustive list of examples of what might constitute for cause."

3. Hypothetical three assumes that hypothetical two exists: "For example, let’s assume the contract says something to the effect of: 'If coach is fired for cause, he shall not be entitled to any further compensation under the contract.'"

4. Hypothetical four is assumes that hypothetical one exists: "It appears that the Raiders will argue that Kiffin was fired because of the team’s poor win-loss record during Kiffin’s tenure."

It doesn't bother me that you raised so many hypotheticals, but I just wanted to clarify that it's not just one.

Blogger Rick Karcher -- 10/01/2008 2:44 PM  


Rick--
I am confident we are making much ado about nothing here, and we may have different thresholds for what we consider bothersome, but you did write that “We're discussing this issue in the context of so many hypotheticals it's making my head spin.”

In any event, we have gone way, way, way off course. But . . .The question I asked was, how can the Raiders fire Kiffin and not pay him the remainder of his salary? We can’t know the answer to that question unless we know the language of the contract, so I assumed certain language was in the contract (your numbers 2 and 3). Numbers 2 and 3 are the same hypothetical. Number 3 simply clarifies the assumption I was making in number 2. Number 1 is not a hypothetical. The Raiders are in fact claiming that Kiffin was fired for cause. I’m not sure I understand your point about number 4. Number 1 does exist, and the Raiders did have a poor record under Kiffin, so my question was simply can that poor record constitute cause under my hypothetical for cause provision. That said, number 4 was an assumption (an assumption that looks as if it will prove to be incorrect, as Davis has since said he did not fire Kiffin because of the poor record), so I am happy to split the difference, concede that I raised two hypotheticals, and move on to a more productive exercise (perhaps watching the NL playoffs).

Anonymous Gabe Feldman -- 10/01/2008 3:23 PM  


Ummm, actually, I have the video and audio from/of the picture above between Darth and Al. I had to replay the audio a couple of times, but Al actually says to Darth, "When I left you....I was but the learner...now I AM THE MASTER CONTRACT DRAFTER".......and then Darth responded, "Don't be too proud of that lack of technical language in the contract you have constructed. The ability to destroy a football team is insignificant to the power of that contract.".....Personally, I found this discussion eerily similar to a confrontation between Darth and Obi-Wan in the original Star Wars or something, but maybe I was just reading too much into the conversation....

Anonymous Anonymous -- 10/01/2008 6:59 PM  


This is Al Davis just making life difficult for Kiffin and rolling the dice on forcing a settlement or getting a favorable ruling from the Commissioner (who is employed by the team owners). As Anonymous points out above, he has nothing to lose other than some legal fees. Worst case, he'll be required to pay what he should have paid anyway. He'll likely lose but he will have made life hard for Kiffin and that's all part of his own petty agenda.

Anonymous john -- 10/02/2008 10:32 AM  


There are sport talk shows promoting the idea of the commissioner forcing Davis to sell, much like Marge Schott was made to do. I don't believe that a business owner should be forced to do that. It's up to the Raider fans to now show up and force the hand of Davis.

Anonymous arizona auto insurance -- 10/02/2008 11:37 AM  


John--

You and anon make a good point about Davis having little to lose by refusing to pay. If this were not Al Davis, one could make the argument that the owner may lose something in the relational sense and in future dealings with potential coaches. By refusing to pay, the owner may (among other things) 1) make it harder to hire the next head coach, who will fear the same refusal in the event of early termination; and/or 2) drive up the price of the next coach's salary. But, this is Al Davis, so...

I'm also not sure that it's likely that Davis will lose this case. As I mention several times above, it's tough to make any kind of prediction without seeing the terms of the contract, but Davis did win this fight against Mike Shanahan. So, if the contract terms are similar, Davis may win this one, too...

Blogger Gabe Feldman -- 10/02/2008 12:52 PM  


The qoute of the day in regards to this mess has to go to Shanahan

When you take a look at it, I was there 582 days. Lane Kiffin was there 616 days. So, what it really means is that Al Davis liked Lane more than he liked me.
I really don't think it's fair. I won three more games, yet he got 34 more days of work. That just doesn't seem right.


hilarious!

Blogger Jimmy H -- 10/02/2008 2:49 PM  


Gabe --

You're right, you'd really have to look at the contract. But based on the press conference and the self-serving letter, I don't see Cause even under the most Raider-friendly drafting of Cause. And the Raiders gave no opportunity to cure. As for the Shanahan case, that was a long time ago when the grievance procedures were much different. We'll see. But I do agree that the primary downside is the effect this will have on Davis' ability to get future coaches. No way a top notch coach will go work for Davis now. He'll still get first time head coaches interested because there are only 32 jobs, but no way he ever gets a Cowher or Billick. That's why I'm surprised he did showy press conference and was so open about not paying Kiffin. I would have thought he'd try to keep that as quiet as possible.

Good lesson for coaches' agents out there -- put a penalty provision in the contract for breach and maybe attorneys' fees provision.

Anonymous john -- 10/02/2008 3:30 PM  


Why is it up to the NFL Commissioner? Is there something in the CBA specifying that the Commissioner decides on contractual issues between coaches and teams? If not, what is the source of this power for the Commissioner? Could Kiffin take the Raiders to court? If these matters are dealt with by league Commissioners, how did the one case get to the Montana Supreme Court?

Blogger Bob Dole -- 10/25/2008 5:17 PM  


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