Posts Tagged ‘Contracts’

The first college football coach to be fired comes early this year as the Kansas Jayhawks announced it will be releasing its head coach, Charlie Weis, from his official duties just four games into the season.

Coach Weis posted a 6-22 career record with the Jayhawks, including a 1-18 record in Big 12 play. The Jayhawks posted two wins this season over Southeast Missouri State and Central Michigan, but losses to Duke University and the University of Texas sealed his fate.

But the firing of Coach Weis will cost to the University approximately $7 million dollars. This is because KU terminated the contract with Coach Weis in only the third year of a five-year contract. Per the terms of the contract, however, KU is obligated to pay him the balance of monies owed for the current season and the next two seasons.

Therefore, Coach Weis, whose contract calls for him to receive approximately $2.5 million dollars a year, will receive the full balance owed to him of approximately $7 million dollars.[1]

But what allows for Coach Weis to continue receiving his millions of dollars per year even though he is relieved of the obligation to coach the football team? The answer is because Coach Weis, or the attorney/agent representing him, negotiated specific termination and buyout clauses as part of the employment contract.

Termination clauses in coaching contracts are broken down into two categories: termination for cause and termination without cause.

Termination for cause allows for a college or university to terminate a coach’s contract when it can show “just cause.”  Most universities maintain that “just cause” exist in situations when a coach violates a criminal statute, a coach knowingly commits or even condones by a member of his or her staff a violation of NCCA or conference rules by a member of his or her staff, a coach is unwilling to perform his or her duties, or in situations that would allow the termination of any other university employee considered to be in the same “classification” as the coach.

In addition, coaching contracts usually contain what is referred to as a “morals clause”. A typical morals clause states that any act by a coach, which is considered an act of moral turpitude, could result in termination. Acts of moral turpitude are usually defined as conduct that is considered contrary to community standards of justice, honesty, or good morals.

In an effort to protect the coaches and in the name of fair play, most termination clauses contain a due process section which include, or should include, the following: a notice provision, an opportunity to be heard or hearing provision, a term which outlines the time frame within such notice and hearing need to be scheduled, and what, if any, punishment could be enforced by the university if just cause is found to exist.

If a college or university can prove that it relieved the coach of his or her duties for cause, the school will be relieved from its obligation to pay him or her the remaining balance of monies owed under the contract.

Absent a finding of just cause, a college or university can still terminate a coach. However, they will be responsible for full payment under the terms of contract unless the contract calls for a negotiated predetermined settlement amount. Most predetermined settlement amounts consist of either a lump sum payment, full payment of all or specific components of the contract for the remainder of the contract term, or for a payment of a percentage of the compensation package for the remainder of the contract term. All of which, except for the lump sum, can be mitigated if the coach finds subsequent employment at another university or at the professional level.

If a coach, on the other hand, decides to breach a contract and work for another college or professional team before the expiration of his or her current contract, the coach would have to buy-out the remaining terms of his or her contract. Buyout clauses typically require a coach to pay their current university a specific amount in order for the coach to be released from a contract anytime before it has expired. Buyout clauses are an essential part of a coach’s contract from the university’s perspective since it is well established in the area of contract law that employers cannot sue for specific performance of a personal service contract. Per the terms of most buyout clauses, if a coach leaves before a release is obtained, he or she can be sued for breach of contract by the university or college. Therefore a buyout clause can discourage a coach from leaving a university early if the terms are severe enough.

In the end it is important to understand that even though negotiations are sometimes tough, intensive and time consuming, proper termination and buyout clauses are essential because they protect the interest of the coaches.

[1] What makes this even more interesting is that Coach Weis will also be paid under the terms of the contract he had with Notre Dame that he signed back in 2005. Per that contract, Coach Weis will be paid approximately $3 to $4 million dollars a year through the 2015 season. (Although this amount is mitigated by the KU contract.)