Coaches' Contracts: Terminating A Coach Without Cause and the Obligation to Mitigate Damages

Marquette Sports Law Review Marquette Sports Law Review

Volume 23

Issue 2

Spring

Article 9

2013

Coaches' Contracts: Terminating A Coach Without Cause and the Coaches' Contracts: Terminating A Coach Without Cause and the

Obligation to Mitigate Damages Obligation to Mitigate Damages

Martin J. Greenberg

Djenane Paul

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Repository Citation Repository Citation

Martin J. Greenberg and Djenane Paul,

Coaches' Contracts: Terminating A Coach Without Cause and the

Obligation to Mitigate Damages

, 23 Marq. Sports L. Rev. 339 (2013)

Available at: https://scholarship.law.marquette.edu/sportslaw/vol23/iss2/9

This Article is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. For

more information, please contact [email protected].

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ARTICLES

COACHES’ CONTRACTS: TERMINATING A

COACH WITHOUT CAUSE AND THE

OBLIGATION TO MITIGATE DAMAGES

MARTIN J. GREENBERG & DJENANE PAUL

I. INTRODUCTION

A divorce in college athletics can be expensive. Sometimes the

relationship between a university and its coach just does not work out, and the

university ends it. However, when terminating a coach without cause, a

university may also incur enormous fiscal obligations to pay for the coach’s

remaining contract years. Nowadays, a coach can depart from his or her

former institution with over a million dollar payday still pending due to

careless contract drafting.

Recently, the University of Illinois at Urbana-Champaign went through a

very expensive divorce in college athletics. By the end of the 2011–2012

football and basketball seasons, the university experienced the early

termination of Ron Zook, Bruce Weber, and Jolette Law—the head coaches of

its football, men’s basketball, and women’s basketball teams, respectively.

The timing of the terminations created tremendous financial liability in the

university’s budget and on its books due to the continued obligation to pay

each of these coaches their expected contractual salary—a total of $7.1

million.

After termination, the university owed $2.6 million to Ron Zook for

 Martin J. Greenberg is managing member of the Law Office of Martin J Greenberg, a

member of the National Sports Law Institute Board of Advisors, an adjunct professor of law at

Marquette University Law School, and the author of The Stadium Game, Sports Law Practice, and

SportsBiz.

 Djenane Paul is a third-year visiting law student at Marquette University Law School from

Florida A&M University College of Law. She is a 2009 graduate of Stony Brook University, where

she earned a B.A. in Psychology with a minor in Business. Djenane is also a 2010 graduate of Stony

Brook University, where she earned a M.A. in Public Policy. Djenane currently serves as a student

worker for the National Sports Law Institute.

1. Chad Thornburg, Coaching Buyouts Cost DIA $7.1 Million in Remaining Salaries, THE

DAILY ILLINI (Oct. 28, 2012), http://www.dailyillini.com/salary_guide/article_046c0816-2180-11e2-

a41b-001a4bcf6878.html.

2. Id.

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340 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

the 2 years remaining on his contract, $3.9 million to Bruce Weber for his

final 3 years, and $620,000 to Jolette Law for her last 2 contract years.

addition to these generous paydays, each of these coaches found employment

relatively quickly: Ron Zook is sitting in a broadcast booth for CBS, Bruce

Weber traded in his orange ties for purple as he now strolls the sidelines as

Kansas State’s head men’s basketball coach, and Jolette Law serves as an

assistant basketball coach for the University of Tennessee Lady Volunteers.

However, had the university drafted careful mitigation of damages clauses into

these contracts, it could have avoided its costly financial burden.

On the other hand, in the Southeastern Conference (SEC), universities are

not typically financially burdened by the simultaneous firing of high profile

coaches; rather, they suffer from a win at all costs mentality in football. An

SEC team has won the last seven national championships in college football,

and the conference will likely continue to succeed with its teams boasting

eleven of the top twenty-five recruiting classes for 2013.

To achieve this

continued level of success, universities in the SEC spend exorbitant amounts

of money to attract the top college football coaches.

However, according to

some, “[t]he latest symbol of the college football arms race is not the coaches’

salaries themselves but rather the money that university officials are spending

to buy out those huge contracts when a coach falters.”

Within the last two

years, five SEC teams terminated their coaches with years remaining on their

contracts and, consequently, these institutions owe almost $27 million in

buyouts.

Because the stakes are high, an understanding of the legal and monetary

implications of an early firing is essential to not only a coach’s representative

but to university counsel as well. This Article will provide practical insights

into how an institution may prepare to protect itself through careful contract

drafting from incurring the costs associated with the early termination of its

highly paid athletics coaches. Section II first surveys numerous collegiate

3. Id.

4. Id.

5. Dan Wolken, FACT: The SEC Rules College Football . . . so Notre Dame, What’re You

Gonna Do About It?, USA TODAY, Nov. 30, 2012, at 1A; Clark Spencer, SEC Team BCS Title for

Seventh Consecutive Season, THE MIAMI HERALD (Jan. 8, 2013), http://www.miamiherald.com/2013/

01/08/3172217/sec-teams-bcs-title-for-seventh.html.

6. Wolken, supra note 5 (“According to USA Today Sports’ most recent annual analysis, SEC

schools account for nine of the [twenty] largest athletic budgets in the country and seven of the

[twenty] highest-paid coaches.”).

7. Jeré Longman, Firing a Coach, at a Price, with Little Evidence the Move Pays off, N.Y.

TIMES, Nov. 29, 2012, at A1.

8. Dan Wolken, In SEC, Money Follows Coaches out Door, USA TODAY, Nov. 26, 2012, at

1C.

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2013] COACHES AND MITIGATION OF DAMAGES 341

coaching contracts to identify the various terms that termination without cause

provisions may include. Section III then offers some best practices that

institutions should follow when drafting termination without cause provisions.

Next, Section IV explains the legal principles behind the affirmative duty to

mitigate damages in the employment law context. Section V applies these

general principles to drafting effective mitigation of damages provisions in

college coaching contracts. Section VI then explores the practical difficulties

in dealing with such provisions based on personal experiences. Lessons

learned from these experiences are incorporated into Section VII, which

suggests several best practices with regard to mitigation of damages that

should be taken into consideration when drafting coaching contracts. Finally,

Section VIII concludes with some final thoughts as to the importance of

careful drafting in collegiate athletics.

II. TERMINATION WITHOUT CAUSE

In the world of college coaching, the contractual concept of mitigation of

damages has found its way into coaches’ contracts under what is normally

called “termination without cause.”

In most contracts the university has the

right at any time to terminate the coach’s contract without cause or reason and

for the university’s own convenience prior to its normal expiration.

Termination without cause is best defined as a premature termination of a

contract prior to the end term date, and it normally involves payment of

compensation to the coach who was prematurely terminated.

Termination without cause usually involves a failure by the coach to win,

lagging ticket sales, dwindling attendance, unhappiness among big money

donors, loss of interest in the program, inability to compete in a conference or

against a rival opponent, changes in administration (e.g., the athletic director

or the president), or any other cause not listed in the termination for cause

contractual provision.

In order to understand the mitigation of damages concept, one must first

analyze what might be included in a termination without cause provision in a

college coaching contract. In evaluating what is included in a termination

without cause provision, it is important to review a cross section of those

provisions as contained in current coaching contracts as well as some contracts

of coaches that either recently retired, resigned, or were terminated.

9. Martin J. Greenberg, Termination of College Coaching Contracts: When Does Adequate

Cause to Terminate Exist and Who Determines Its Existence?, 17 MARQ. SPORTS L. REV. 197, 205

(2006).

10. Id. at 205–07.

11. Id. at 205.

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342 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

A termination without cause provision will contain some of the following

elements: written notice of termination, payment format, payments constitute

liquidated damages, waiver and release of liability, no continuation of benefits,

withholding, interest, reassignment, death or disability, no liability for

collateral benefits, records returns, no obligation to mitigate, limitation on

amount, and resignation considered termination without cause.

1. Written Notice of Termination. In order to terminate a coach prior to

the end term of a contract that includes a termination without cause provision,

the university is required to give oral or written notice of its intent to terminate

and the date upon which the termination becomes effective. Several examples

follow:

o SABAN - University of Alabama: “Termination by the University

without cause shall be effectuated by delivering to the Employee

written notice of the University’s intent to terminate this Contract

without cause, which notice shall be effective upon the earlier of

the date for termination specified in the notice or fourteen (14)

days after receipt of such notice by the Employee.”

o CALIPARI - University of Kentucky: “Termination by the

University without Cause shall be effectuated by delivering

written notice not less than thirty days prior to the effective date of

said termination. Termination shall be effective upon the date

specified in the notice.”

o MILES - Louisiana State University (LSU): “The UNIVERSITY

shall have the right to terminate this Agreement without cause at

any time by giving COACH thirty (30) days prior written

notice.”

o PELINI - University of Nebraska: “The parties agree that the

University shall, at any time, have the right to terminate Coach’s

employment hereunder for reasons other than for cause upon

giving Coach reasonable written or verbal notice of termination,

as such reasonableness may be determined by the University in its

discretion and exercise of good faith.”

12. Amendment to Coaching Contract between Nick L. Saban and Univ. of Ala. ¶ 5.01(d) (Jan.

4, 2007) (on file with author) [hereinafter Saban Contract].

13. Coaching Contract between John Vincent Calipari and Univ. of Ky. ¶ 7(b) (Mar. 31, 2009)

(on file with author) [hereinafter Calipari Contract].

14. Amendment to Coaching Contract between Les Miles and La. State Univ.¶ 13(A) (Dec. 7,

2007) (on file with author) [hereinafter 2007 Miles Amendment].

15. Coaching Contract between Mark “Bo” Pelini and Univ. of Neb.-Lincoln ¶ 14(a) (Mar. 1,

2009) (on file with author) [hereinafter Pelini Contract].

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2. Payment Amount and Format. A termination without cause provision

will specify the amount the coach is to receive and the timing of the payments

to be received. Some examples follow:

o CREAN - Indiana University: “[T]he University’s sole obligation

to the employee shall be to continue to pay the Employee an

amount representing the lesser of his then-current base annual

salary . . . for the remainder of the Agreement, or Three Million

Dollars ($3,000,000). [I]rrespective of the total sum to be paid,

this amount will be payable in monthly installments . . . .”

o MILLER - University of Arizona: “University shall pay to Coach

. . . an amount equal to one-half of the sum of his then-current

annual Program Salary . . . and Related Compensation . . . for the

remainder of the Contract Year in which such termination

occurred plus (i) $4.8 million if the termination occurred in the

first Contract Year, (ii) $4.0 million if the termination occurred in

the second Contract Year; (iii) $3.2 million if the termination

occurred in the third Contract Year, or (iv) $1.6 million if the

termination occurred in the [f]ourth Contract Year.

In the event of such termination after the fourth Contract

Year, University shall pay to Coach . . . an amount equal to one-

half of the sum of his then-current annual Program Salary . . . and

Related Compensation . . . per year, multiplied by the number of

full and fractional years remaining on the Term.”

o SABAN - University of Alabama: “[T]he University shall pay,

and Employee agrees to accept . . . an amount equal to the sum of

annual base salary and talent fees for each month remaining on the

term of the Contract calculated from the first full month

immediately following the effective date of termination without

cause . . . . The [amount] shall be paid to Employee over a period

of time equal to twice the number of full months remaining on the

Contract term (the “Payment Period”) in monthly installments

commencing on the last day of the month immediately following

the month in which the termination date occurs and continuing on

the last day of each succeeding month thereafter during the

Payment Period.”

16. Coaching Contract between Thomas Crean and Ind. Univ. ¶ 6.02(f) (Aug. 11, 2008) (on file

with author) [hereinafter Crean Contract].

17. Coaching Contract between Sean E. Miller and Univ. of Ariz. ¶ 18 (June 22, 2009) (on file

with author) [hereinafter Miller Contract].

18. Saban Contract, supra note 12, ¶ 5.01(e).

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o SELF - University of Kansas: “[University] shall pay Head Coach

as liquidated damages, the remaining amount owed to Head Coach

[for salary and professional services] for the balance of the

contract period as well as all payments as provided for under the

terms of . . . the Retention Agreement . . . .”

o MONTGOMERY - University of California: “UNIVERSITY

shall pay to Coach as liquidated damages, in lieu of any and all

other legal remedies or equitable relief, the following sum(s):

100% of the salary and talent fee for the remainder of the

twelve month period in which the termination without

cause occurs; and

100% of the next remaining year’s base salary and talent

fee; and

75% of the next remaining year’s base salary and talent

fee; and

50% of the next remaining year’s base salary and talent

fee; and

25% of the base salary and talent fee for each of the next

remaining contract years.”

o RYAN - University of Wisconsin: “University shall pay to Coach

. . . an amount equal to Coach’s then current Contracted Salary, as

defined in paragraph III. B. of this Agreement, for the period of

four (4) years from the effective date of the termination or for the

remainder of the Term, including any extension thereof,

whichever amount is less. University’s obligation shall be paid on

a monthly basis, prorated over the balance of the Term of this

Agreement. In the alternative and within University’s sole

discretion, University may pay to Coach a lump sum equal to the

total monthly payments otherwise due hereunder, discounted to an

equivalent net present value using the short-term Applicable

Federal Rate under Internal Revenue Code §1274(d), annual

compounding, as of the end of the month immediately preceding

the date of termination.”

o STOOPS - University of Oklahoma: “The parties to this Contract

19. Coaching Contract between Bill Self and Univ. of Kan. ¶ 12 (Apr. 1, 2006) (on file with

author) [hereinafter Self Contract].

20. Coaching Contract between Michael Montgomery and Univ. of Cal. ¶ 12 (Apr. 5, 2008) (on

file with author) [hereinafter 2008 Montgomery Contract].

21. Amendment to Coaching Contract between William F. Ryan Jr. & Univ. of Wis.-Madison ¶

V(A)(3) (July 1, 2003) (on file with author) [hereinafter Ryan Contract].

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agree that in the event of a termination without cause under

Paragraph V.A. of this Contract the damages incurred by Coach

would be uncertain and not susceptible to exact computation.

Accordingly, in the event of a termination without cause under

Paragraph V.A., the University will pay Coach Three Million

Dollars ($3,000,000) per year remaining under the term as set

forth in Paragraph II.A. Such amount would be paid in annual

installments each year commencing within 30 days of termination.

Such annual amount shall be prorated for any termination prior to

the end of a contract year. By agreeing to this Contract, Coach

agrees that this amount will constitute full settlement of any and

all claims that Coach might otherwise assert against the University

and any of its agents or employees. If Coach asserts any claim

against the University in violation of this Paragraph V.B., the

University is released from any and all obligations to make

payments to Coach under this Paragraph V.B. from the date the

claim is asserted to any entity, including the press, any agency, or

a court.”

3. Payments Constitute Liquidated Damages. Drafters of employment

contracts often include provisions that will specify the damages for a breach.

“A provision in a written employment agreement that stipulates the amount of

money to be recovered if the employee is discharged, is known as a liquidated

damage clause.”

“Damages for breach by either party may be liquidated in

the agreement but only at an amount that is reasonable in the light of the

anticipated or actual loss caused by the breach. . . .”

Liquidated damage clauses present several contractual advantages. First,

they establish some predictability involving costs so that parties can balance

the cost of anticipated performance against the cost of a breach.

In this way

liquidated damages serve as a source of limited insurance for both parties.

Another contractual advantage of liquidated damage clauses is that the parties

each have the opportunity to settle on a sum that is mutually agreeable rather

than leaving that decision up to the courts or arbitrators.

There is a presumption in favor of the validity of liquidated damage

22. Coaching Contract between Robert Anthony Stoops and Univ. of Okla. ¶ V(B) (Jan. 1,

2009) (on file with author).

23. PAUL H. TOBIAS, 2 LITIGATING WRONGFUL DISCHARGE CLAIMS § 8:4 (2012).

24. RESTATEMENT (SECOND) OF CONTRACTS § 356(1) (1981).

25. What Are “Liquidated Damages”?, ROTTENSTEIN LAW GROUP LLP, http://www.rotlaw.

com/legal-library/what-are-liquidated-damages/ (last visited Apr. 13, 2013).

26. See id.

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provisions.

Thus, the burden is on the party opposing its validity to

demonstrate that it is invalid and unenforceable.

The Restatement (Second) of Contracts states that the liquidated damages

clause is enforceable “only at an amount that is reasonable in the light of the

anticipated or actual loss caused by the breach and the difficulties of proof of

loss. A term fixing unreasonably large liquidated damages is unenforceable

on grounds of public policy as a penalty.”

Further, it has been found that if

the sum to be paid to the discharged employee is paid in accordance with the

time in which the employment contract is expected to run, the liquidated

damages provision for payment will be readily upheld.

The case of Vanderbilt University v. DiNardo dealt with a liquidated

damage clause in the event that DiNardo terminated his contract or resigned

his coaching duties before the expiration of the contract.

Vanderbilt brought

an action to collect liquidated damages under a buyout provision.

DiNardo

claimed that the liquidated damages portion of the contract was an

unenforceable penalty under Tennessee law and that the liquidated damage

provision was a ‘“thinly disguised, overly broad non-compete provision,’

unenforceable under Tennessee law.”

Although this case involved a liquidated damage clause when a coach

decided to terminate his contract early, the Sixth Circuit, using the same

standard as the district court, disagreed with DiNardo’s contentions:

Contracting parties may agree to the payment of liquidated

damages in the event of a breach. The term “liquidated

damages” refers to an amount determined by the parties to be

just compensation for damages should a breach occur. Courts

will not enforce such a provision, however, if the stipulated

amount constitutes a penalty. A penalty is designed to coerce

performance by punishing default. In Tennessee, a provision

will be considered one for liquidated damages, rather than a

penalty, if it is reasonable in relation to the anticipated

damages for breach, measured prospectively at the time the

contract was entered into, and not grossly disproportionate to

the actual damages. When these conditions are met,

27. NPS, LLC v. Minihane, 886 N.E.2d 670, 673 (Mass. 2008).

28. Id.

29. RESTATEMENT (SECOND) OF CONTRACTS § 356(1).

30. See Anderson v. Cactus Heights Country Club, 125 N.W.2d 491, 493–94 (S.D. 1963).

31. Vanderbilt Univ. v. DiNardo, 174 F.3d 751, 753 (6th

Cir. 1999).

32. Id.

33. Id. at 755.

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particularly the first, the parties probably intended the

provision to be for liquidated damages. However, any doubt

as to the character of the contract provision will be resolved in

favor of finding it a penalty.

The district court concluded that a “formula based on DiNardo’s salary to

calculate liquidated damages was reasonable ‘given the nature of the

unquantifiable damages in the case’” and that “parties to a contract may

include consequential damages and even damages not usually awarded by law

in a liquidated damage provision provided that they were contemplated by the

parties.”

The district court further explained that

The potential damage to [Vanderbilt] extends far beyond the

cost of merely hiring a new head football coach. It is this

uncertain potentiality that the parties sought to address by

providing for a sum certain to apply towards anticipated

expenses and losses. It is impossible to estimate how the loss

of a head football coach will affect alumni relations, public

support, football ticket sales, contributions, etc. . . . As such,

to require a precise formula for calculating damages resulting

from the breach of contract by a college head football coach

would be tantamount to barring the parties from stipulating to

liquidated damages evidence in advance.

The Sixth Circuit agreed with the district court and concluded that the

stipulated damage amount was reasonable in relation to the amount of damage

that could be expected to result from the breach.

The court also found that

the parties understood that Vanderbilt would suffer damage should DiNardo

prematurely terminate his contract, and that these actual damages would be

difficult to measure.

As a general rule, if a court upholds a liquidated damages provision, the

injured party may not seek compensatory damages.

However, “[u]nless a

contract provides that liquidated damages are to be the exclusive remedy for a

breach, a liquidated damages provision does not preclude other relief to the

non-breaching party, if the actual damages are caused by an event not

34. Id. (internal citations omitted).

35. Id. at 755–56 (quoting Vanderbilt Univ. v. DiNardo, 974 F. Supp. 638, 642 (M.D. Tenn.

1997)).

36. Vanderbilt, 974 F. Supp. at 642.

37. Vanderbilt, 174 F.3d at 757

38. Id.

39. See Harris v. Conrad, No. 7251, 1984 WL 21876, at *4 (Del. Ch. Sept. 18, 1984).

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348 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

contemplated by the parties in the liquidated damages clause.”

In order for a plaintiff to establish a breach of contract action for the

recovery of liquidated damages, two requirements must be met.

First, the

amount that was agreed upon by the parties must be a reasonable estimation of

compensatory damages in the event of a breach; second, the damages for a

contractual breach must have been difficult to determine at the time the

contract was formed.

If the two requirements are met, the plaintiff is entitled

to receive liquidated damages even if no actual money or pecuniary damages

were suffered.

If a court finds that the sum that was stipulated is not

rationally related to the measure of damages that the injured party may have

sustained as a result of a breach, a liquidated damages provision will be

deemed a penalty and subsequently struck down for violating public policy.

The coach and university will stipulate that the payments received for

termination without cause are agreed upon payments that constitute liquidated

damages, are not a penalty, were bargained for at arm’s length between the

parties, and were reasonable. Several examples include:

o WILLIAMS - University of North Carolina at Chapel Hill: “The

parties have bargained for this liquidated damages provision,

giving consideration to the following: (a) this is an agreement for

personal services; and (b) the parties recognize that a termination

of this Agreement by UNIVERSITY prior to its natural expiration

could cause COACH to lose benefits, compensation, and/or

outside compensation relating to his employment at

UNIVERSITY, which damages are difficult to determine with

certainty. Therefore, the parties have agreed upon this liquidated

damages provision.”

40. Draper v. Westwood Dev. Partners, No. CIV. A. 4428–MG, 2010 WL 2432896, at *3 (Del.

Ch. June 3, 2010; revised June 16, 2010) (citation omitted).

41. See JKC Holding Co. v. Wash. Sports Ventures, Inc., 264 F.3d 459, 467–68 (4th Cir. 2001)

(holding that the liquidated damages clause was enforceable because the damages were difficult to

ascertain at the time the agreement was entered into and the amount agreed upon was “not plainly

disproportionate to the injury”).

42. See Guthy-Renker Corp. v. Bernstein, 39 F. App’x 584, 586 (9th Cir. 2002) (noting that

under California law “[a] liquidated damages clause will be . . . unenforceable . . . ‘if it bears no

reasonable relationship to the range of actual damages that the parties could have anticipated would

flow from a breach.’”) (quoting Ridgley v. Topa Thrift & Loan Ass’n, 953 P.2d 484, 488 (Cal.

1998)).

43. See id.

44. See S.H. Deliveries, Inc. v. TriState Courier & Carriage, Inc., No. 96C-02-086-WTQ, 1997

WL 817883, at *2 (Del. Super. Ct. May 21, 1997) (citing 22 AM. JUR. 2D Damages § 683 (1965));

Meyer Ventures, Inc. v. Barnak, No. 11502, 1990 WL 172648, at *5 (Del. Ch. Nov. 2, 1990).

45. Amendment to Coaching Contract between Roy A. Williams and Univ. of N.C. at Chapel

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o SABAN - University of Alabama: “The parties have bargained for

and agreed to the foregoing liquidated damages provision, giving

consideration to the fact that termination of this Contract by the

University without cause prior to its expiration may cause the

Employee to lose certain benefits and incentives, supplemental

compensation, or other athletically-related compensation

associated with Employee’s employment at the University, which

damages are extremely difficult to determine with certainty or

fairly or adequately. The parties further agree that the payment of

such Liquidated Damages by the University and acceptance

thereof by the Employee shall constitute adequate and reasonable

compensation to the Employee for the damages and injuries

suffered by the Employee because of such termination by the

University. The foregoing shall not be, nor be construed to be, a

penalty.”

o KELLY - University of Oregon (contract terminated by coach):

“The parties have bargained for and agreed to the foregoing

liquidated damages provisions giving consideration to the fact that

termination of this Agreement or any extension thereof by

University without cause prior to such agreement’s expiration date

may precipitate or lead to Kelly losing certain salary, benefits,

compensation or other economic advantages or income related to

his employment at the University, which damages are extremely

difficult to determine fairly, adequately, or with certainty. The

parties further agree that the payment of such liquidated damages

by University and acceptance thereof by Kelly shall constitute

sufficient, adequate and reasonable compensation to Kelly for any

loss, damages or injury suffered by Kelly related to such

termination by University. The foregoing shall not be, nor be

construed to be, a penalty. The provisions of this Section 6.02

shall be without prejudice to any other right (excluding

unemployment compensation) Kelly may have under applicable

law.”

4. Waiver and Release of Liability. Upon the conclusion of the payment

of the amount agreed to as liquidated damages, the coach will release the

university from any and all further damages. Several examples include:

Hill ¶ XI (Oct. 31, 2011) (on file with author).

46. Saban Contract, supra note 12, ¶ 5.01(e).

47. Coaching Contract between Charles “Chip” Kelly and Univ. of Or. ¶ 6.02(b) (Sept. 27,

2010) (on file with author) [hereinafter Kelly Contract].

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350 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

o SABAN - University of Alabama: “University shall have no

liability whatsoever to Employee, nor shall Employee be entitled

to receive, and Employee hereby waives any claim that Employee

or Employee’s personal representatives may have against the

University or the University’s trustees, officers, employees, or

agents, for any direct or consequential damages . . . .”

o PELINI - University of Nebraska: “Upon payment of such

liquidated damages to Coach, Coach does hereby waive and

release the University, its Board members, administrators,

employees and agents, from any and all claims of any nature

whatsoever, which may arise by reason of such termination,

including, but not limited to any benefits of employment or other

income which may accrue to Coach by reason of Coach’s position

as Head Football Coach.”

o CREAN - Indiana University: “The Employee agrees that as a

condition of receiving any post termination compensation under

Section 6.02:1, except for earned but unpaid compensation to the

date of termination and any legally protected rights the Employee

has under any employee benefit plan, the Employee must execute

a comprehensive release in the form determined from time to time

by the University in its sole discretion[.] Generally, the release

will require the University, the Employee (and his estate),

administrators, successors, heirs, distributees, devisees, legatees

and assigns to release and forever discharge the University and its

trustees, officers,[] directors, agents, attorney, successors and

assigns from any and all claims, suits and/or causes of action that

grow out of or are in any way related to[] the Employee’s

employment with the University. This release may include but

shall not be limited to any claim that the University violated the

Age Discrimination in Employment Act; the Older Worker’s

Benefit Protection Act; the Americans with Disabilities Act; Title

VTI of the Civil Rights Act of 1965 (as amended); the Family and

Medical Leave Act; any state, federal law or local ordinance

prohibiting discrimination, harassment or retaliation in

employment; any claim for wrongful discharge in violation of

public policy, claims of promissory estoppel or detrimental

reliance, defamation, intentional infliction of emotional distress;

breach of contract; the public policy of any state; or any federal,

48. Saban Contract, supra note 12, ¶ 5.01(f).

49. Pelini Contract, supra note 15, ¶ 14(c).

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state or local law relating to any matter contemplated by this

Agreement[.] Upon termination of employment with the

University, the Employee will be presented with a release and, if

the Employee fails to execute the release, the Employee agrees to

forfeit any payment from the University. The Employee

acknowledges that he is an experienced person knowledgeable

about the claims that might arise in the course of employment

with the University and knowingly agrees that the payments upon

termination provided for in this Agreement are satisfactory

consideration for the release of all possible claims described in the

release.”

o HOWLAND - University of California, Los Angeles (UCLA)

(terminated): “Coach’s right to payment under this Paragraph 12

is subject to the express understanding that Coach shall bring no

claim or lawsuit of any kind against University or its employees or

agents which arises out of or is in any way related to termination

of his employment under this Paragraph 12, or his employment

(except any claim for worker’s compensation or enforcement of

Coach’s right to payment under this Paragraph 12), regardless of

when such termination may take place. In the event that Coach

brings such a claim or lawsuit, all obligations of University under

this Paragraph 12 shall cease, and Coach shall repay, forthwith

and in full, any and all post-termination payments received by him

from University under this Paragraph 12[.]”

o DONOVAN - University of Florida: “Coach . . . hereby waives

any claim . . . for consequential damages allegedly sustained by

reason of any alleged economic loss, including, without limitation,

loss of collateral income, loss of earning capacity, loss of business

opportunity, loss of perquisites, loss of speech, camp or other

outside activity fees, or expectation income, or damages allegedly

sustained by or by reason of alleged humiliation or defamation

resulting from the fact of termination or suspension, the public

announcement thereof or the release by Association, University or

Coach of information or documents required to be released by

law. Coach acknowledges that in the event of termination of this

Agreement for cause, without cause or otherwise, or suspension

hereunder, he shall have no right to occupy the position of head

50. Crean Contract, supra note 16, ¶ 6.02(H).

51. Coaching Contract between Ben Howland and Univ. of Cal., L.A. ¶ 12(d) (June 1, 2008)

(on file with author) [hereinafter Howland Contract].

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352 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

basketball Coach and that his sole remedies are provided herein

and shall not extend to injunctive relief. Coach further

acknowledges that he has no expectation of the granting of tenure

by University.”

o CHIZIK - Auburn University (terminated): “Coach acknowledges

that in the event of termination of this Agreement he shall have no

right to occupy the position of Head Football Coach and that his

sole remedies are provided herein and shall not extend to

injunctive relief. Coach acknowledges that he has no expectation

of tenure. Coach acknowledges that as part of this Agreement, he

forfeits all rights he might have to file a grievance under

University policy related in any way to his termination, and

University acknowledges that it will not assert in subsequent

proceedings that Coach’s forfeiture of these rights results in his

failure to exhaust any administrative remedies.”

5. Continuation of Benefits. A termination without cause provision

makes clear that the only amounts that the coach is entitled to receive are those

amounts specifically enumerated as liquidated damages. University benefits,

with some exception, normally will cease upon the payment of liquidation of

damages.

Some examples follow:

o HOWLAND - UCLA (terminated): “Coach understands and

agrees that any payments made to him as a result of a Termination

Without Cause shall not entitle him to the continuation of

University employee benefits, including, without limitation, the

accruing of additional UCRS service credit, except as such

benefits are required by law for former employees, such as

COBRA, or such benefits as shall have vested as of the date of

such termination.”

o SABAN - University of Alabama: “Employee will be entitled to

continue such life or health insurance benefits at Employee’s own

expense as required or permitted by law . . . .”

o CALIPARI - University of Kentucky: “Coach will be entitled to

continue such benefits at Coach’s own expense as required or

52. Amendment to Coaching Contract between William J. Donovan and Univ. of Fla.¶ 14(E)

(Apr. 16, 2003) (on file with author).

53. Coaching Contract between Gene Chizik and Auburn Univ. ¶ 20 (Dec. 15, 2008) (on file

with author) [hereinafter Chizik Contract].

54. Saban Contract, supra note 12, ¶ 5.01(d).

55. Howland Contract, supra note 51, ¶ 12(e).

56. Saban Contract, supra note 12, ¶ 5.01(d).

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permitted by law, but Coach will not otherwise be entitled to any

employment or other benefit described herein. Health insurance

however shall continue in full force and effect at University’s

expense for ninety (90) days after date of termination or until

Coach is employed, whichever occurs first.”

o ERICKSON - Arizona State University (terminated): “All fringe

benefits furnished by the University will terminate on the date of

termination of this Contract.”

o RYAN - University of Wisconsin: “In either event, Coach will be

entitled to continue his health insurance plan at his own expense

for up to thirty-four (34) months from the effective date of

termination, but will not be entitled to any other employee

benefits, except as otherwise provided herein or required by

applicable law. As permitted by Wisconsin law, Coach may

secure a conversion policy for his UW group term life

insurance.”

6. Withholding. A termination without cause provision may require the

university to continue to withhold state and federal taxes or other deductions

from the coach’s paycheck in just the same way as though the coach was still

employed. Several examples follow:

o CREAN - Indiana University: “[T]his amount will be payable in

monthly installments with appropriate withholding and deductions

for taxes and other matters required by law.”

o MILLER - University of Arizona: “The payment by the

University under this section will be subject to such withholdings

as may be required by applicable state and federal laws as

determined by the University.”

o FISHER - Florida State University: “[T]he University shall pay

Coach . . . , less required deductions and applicable withholdings

for federal, state, and local taxes . . . .”

7. Interest. While most contracts are silent in this regard, a contract may

specify that no interest will be paid on the accruing liquidated damage

57. Calipari Contract, supra note 13, ¶ 7(b).

58. Coaching Contract between Dennis Erickson and Ariz. State Univ. ¶ 15 (June 11, 2007) (on

file with author).

59. Ryan Contract, supra note 21, ¶ V(A)(3).

60. Crean Contract, supra note 16, ¶ 6.02(f).

61. Miller Contract, supra note 17, ¶ 18.

62. Coaching Contract between John J. Fisher, Jr. and Fla. State Univ. ¶ III(A) (Jan. 5, 2010)

(on file with author).

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354 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

obligations. Specifically, the contract between the University of Oregon and

Chip Kelly indicated that the university’s obligation shall not accrue interest

so long as the payments are not in arrears or in default.

8. Reassignment. In some coaches’ contracts, the termination without

cause provision will specify that the university does not have the right to

reassign the coach to any other position in the event of a termination without

cause. Several examples follow:

o PELINI - University of Nebraska: “The position of Head Football

Coach is unique and requires special talents and skills. As such, it

is the only position for which Coach is being employed, and the

University shall not have the right to re-assign Coach to any other

position [in the event that it terminates his contract for reasons

other than for cause].”

o RHOADS - Iowa State University: “University agrees that it does

not have the power to reassign Rhoads to another position without

his prior written consent.”

o MCCAFFERY - University of Iowa: “In such event, Coach will

not be reassigned to any other position within the Department of

Athletics.”

o ROBINSON - Oregon State University: “University waives its

rights to reassign COACH as provided in OAR 580-021-0318.”

o WALKER - New Mexico State University (contract terminated by

coach): “Head Football Coach agrees that Athletics Director may,

at any time and with reasonable evidence of misconduct without

cause or the necessity of any hearing, reassign Head Football

Coach to other positions with different duties than those as Head

Football Coach of University’s football program, without

reduction in Head Football Coach’s wages and benefits specified

in Section 3 only. Benefits set forth in Section 4, if any, shall

terminate effective upon reassignment unless otherwise agreed

upon by the parties. Prior to any reassignment, there shall be a

meeting between the Head Football Coach and the President of the

63. Kelly Contract, supra note 47, ¶ 6.02(b).

64. Pelini Contract, supra note 15, ¶ 14(a).

65. Coaching Contract between Paul Rhoads and Iowa State Univ. ¶ V(10), (Dec. 20, 2008) (on

file with author).

66. Coaching Contract between Francis John McCaffery and Univ. of Iowa ¶ 10 (Mar. 29,

2010) (on file with author) [hereinafter McCaffery Contract].

67. Coaching Contract between Craig Robinson and Or. State Univ. ¶ 16 (Apr. 6, 2008) (on file

with author) [hereinafter Robinson Contract].

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University to discuss the matter. After such meeting the President

and Athletics Director shall confer and determine whether a

reassignment shall occur. In the event the decision is made to

reassign Head Football Coach, then the Head Football Coach shall

have the right to accept such reassignment or terminate this

Agreement. Should Head Football Coach decide to terminate this

Agreement, he shall be entitled to receive payment of fifty percent

(50%) of the value of his salary for the remaining term of the

Agreement.”

9. Death or Disability. Some termination without cause provisions

address the issue as to what happens with respect to liquidated damages

payments in the event that a coach dies or becomes disabled during the period

of payment of liquidated damages and the continued duty and obligation to

mitigate. Some examples follow:

o PELINI - University of Nebraska: “In case of Coach’s death, the

University’s obligations under this section 14 shall cease effective

on the last day of the month in which Coach dies.”

o LONDON - University of Virginia: “No payment shall be payable

following the Coach’s death or during a period of any

incarceration or other condition precluding the Coach from

actively seeking to mitigate as above provided.”

o RYAN - University of Wisconsin: “If University terminates this

Agreement without cause pursuant to Article V., Section A.2.(b),

University shall pay to Coach, or to Coach’s estate or designated

beneficiary should Coach die after termination but during the

payment period, as liquidated damages . . . .”

10. No Liability for Collateral Benefits. Oftentimes, a termination

without cause provision will indicate that the amounts stated as liquidated

damages are the only amounts that the coach will receive. As a result, the

coach will receive no other collateral benefits as provided in the contract.

Several examples follow:

o SABAN - University of Alabama: “University shall have no

liability whatsoever to Employee, nor shall Employee be entitled

to receive, and Employee hereby waives any claim that Employee

68. Coaching Contract between DeWayne Walker and N.M. State Univ. ¶ 14 (Jan. 1, 2009) (on

file with author).

69. Pelini Contract, supra note 15, ¶ 14(a).

70. Coaching Contract between Mike London and Univ. of Va. ¶ 7.3(2) (Dec 8, 2009) (on file

with author) [hereinafter London Contract].

71. Ryan Contract, supra note 21, ¶ V(A)(3).

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or Employee’s personal representatives may have against the

University or the University’s trustees, officers, employees, or

agents, for any direct or consequential damages by reason of any

alleged economic loss, including, but without limitation, loss of

collateral income, talent fees, earning capacity, business

opportunities, incentive and supplemental income, benefits, or

perquisites, including those described in Sections 4.02 and 4.03

hereof, or Commercial Activities income or fees or by reason of

alleged humiliation or defamation resulting from the fact of

termination or suspension, the public announcement thereof, or

the University’s release of information or documents required by

law. Employee acknowledges that in the event of the termination

of this Contract for cause, without cause, or otherwise, Employee

shall have no right to occupy the position of head football coach

and Employee’s sole remedies are provided for herein and shall

not extend to injunctive relief.”

o CREAN - Indiana University: “In addition, in no case shall the

University be liable to the Employee for the loss of any collateral

business opportunities or any other benefits, perquisites or income

resulting from activities such as but not limited to camps, clinics,

media appearances, radio, television, Internet, marketing and

promotional services, apparel or shoo [sic] contracts, basketball or

equipment agreements, consulting relationships or from[] other

sources that might produce promotional or outside income[.]”

o KELLY - University of Oregon (contract terminated by coach):

“In no case shall University or the State of Oregon be liable for

the loss of any collateral business opportunities or any other

benefits (including unemployment compensation), or perquisites

or income resulting from activities such as but not limited to,

camps, clinics, media appearances, broadcast talent fees,

consulting relationships or from any other (inside-the-University

or outside-the-University) sources that may ensue as a result of

University’s termination of this Agreement without cause.”

o HOKE - University of Michigan: “In no case shall the University

be liable for the loss of any base salary, additional compensation,

bonus payments, deferred compensation, collateral business

opportunities or any other benefits, perquisites or income resulting

72. Saban Contract, supra note 12, ¶ 5.01(f).

73. Crean Contract, supra note 16, ¶ 6.02(I).

74. Kelly Contract, supra note 47, ¶ 6.02(b).

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from activities such as, but not limited to, camps, clinics, media

appearances, television or radio shows, apparel or shoe contracts,

consulting relationships or from any other sources that may ensue

as a result of the University’s termination without cause of Head

Coach’s employment under this Agreement.”

o GOTTFRIED - North Carolina State University (NC State): “In

the event NC STATE exercises its right to terminate the

Agreement without Cause, NC STATE shall not be obligated to

pay COACH any other compensation described in the Agreement

(except as detailed to the contrary herein) or be responsible for

consequential damages, including, but not limited to any loss of

business opportunities or loss of other income, benefits, or

perquisites from any sources, that might occur as a result of such

termination.”

11. Records Return. With this provision, the coach, upon termination

without cause, is contractually required to return certain records and

information to the university within a designated time period. Some examples

follow:

o MEYER - Ohio State University: “All materials or articles of

information, including, without limitation, personnel records,

recruiting records, Team information, films, statistics or any other

material or data, furnished to Coach by Ohio State or developed

by Coach on behalf of Ohio State or at Ohio State’s direction or

for Ohio State’s use or otherwise in connection with Coach’s

employment hereunder are and shall remain the sole property of

Ohio State. Within seventy-two (72) hours of the expiration of the

term of this agreement or its earlier termination as provided

herein, Coach shall immediately cause any such materials in his

possession or control, including, but not limited to, all Ohio State

building/facility keys, Ohio State issued credit cards, telephones

and computers (including all other Ohio State issued technological

devices) to be delivered to Ohio State.”

o PELINI - University of Nebraska: “All documents, files, records,

materials (in any format, including electronically stored

75. Coaching Contract between Brady Hoke and Univ. of Mich. ¶ 4.01(d) (Mar. 28, 2011) (on

file with author) [hereinafter Hoke Contract].

76. Coaching Contract between Mark Gottfried and N.C. State Univ. ¶ XIII(A) (Apr. 21, 2011)

(on file with author) [hereinafter Gottfried Contract].

77. Coaching Contract between Urban F. Meyer and Ohio State Univ. ¶ 5.4 (Nov. 28, 2011)

(on file with author) [hereinafter Meyer Contract].

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358 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

information), equipment or other property, including without

limitation, personnel records, recruiting records, team information,

athletic equipment, films, statistics, keys, credit cards, laptop

computers, software programs, electronic communication devices,

and any other material, data or property, furnished to Coach by the

University or developed or acquired by Coach on behalf of the

University or at the expense of the University or using University

resources or otherwise in connection with Coach’s employment by

the University are and shall remain the sole property of the

University. Within ten (10) days of termination or separation of

Coach’s University employment, for any reason, Coach shall

cause any such materials in Coach’s possession or control to be

delivered to the University. The foregoing provisions of this

section shall not apply to personal notes, personal playbooks,

memorabilia, diaries and similar personal records of Coach, which

Coach is entitled to retain.”

o FERENTZ - University of Iowa: “All materials or articles of

information including, without limitation, personnel records,

recruiting records, team information, films, statistics or any other

material furnished to the Coach by the University or developed by

the Coach on behalf of the University or at the University’s

direction or for the University’s use or otherwise in connection

with the Coach’s employment hereunder are and shall remain the

property of the University. In the event of the Coach’s

termination as provided herein, the Coach shall immediately cause

any such materials to be delivered to the University.”

12. No Obligation to Mitigate. Some contracts, upon the acceptance of

amounts stated as liquidated damages, indicate that the coach has absolutely

no further obligation to mitigate. Some examples follow:

o MILLER - University of Arizona: “The amount of liquidated

damages bargained for in this Contract shall not be reduced if

Coach retains other employment.”

o WHITTINGHAM - University of Utah: “Coach Whittingham

shall have no obligation to mitigate damages if this Agreement is

terminated by the University without cause.”

78. Pelini Contract, supra note 15, ¶ 11.

79. Coaching Contract between Kirk J. Ferentz and Univ. of Iowa ¶ 12 (Feb. 1, 2010) (on file

with author).

80. Miller Contract, supra note 17, ¶ 18.

81. Coaching Contract between Kyle Whittingham and Univ. of Utah ¶ 8(B) (Dec. 29, 2008)

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o MCCAFFERY - University of Iowa: “Accordingly, the parties

agree to this liquidated damage provision, and the parties agree

that Coach shall have no duty to mitigate such damages.”

o HUGGINS - University of West Virginia: “Coach shall have no

duty to mitigate, nor shall University have any right of offset.”

o PEARL - University of Tennessee (terminated): “If the University

terminates this Agreement pursuant to the terms of this Article

XV(D), the buy-out payments made to Coach Pearl shall not be

subject to mitigation and shall not terminate or be reduced should

Coach Pearl obtain other employment. Coach Pearl shall not be

obligated to obtain other employment.”

In some contracts, the termination without cause provision will contain a

lump sum buyout, and therefore not require any stipulation that the coach will

mitigate damages. Some examples follow:

o MEYER - Ohio State University:

“Date of Notice of Termination: Buy-Out Amount*

At any time after contract execution but

on or before January 31, 2014 $15,375,127

Between February 1, 2014 - January 31, 2015 $11,931,731

Between February 1, 2015 - January 31, 2016 $8,683,244

Between February 1, 2016 - January 31, 2017 $5,618,634

Between February 1, 2017 - January 31, 2018 $2,727,492

Such payment shall be made in a lump sum on the sixtieth (60th)

day after the effective date of termination.”

o JONES - University of Cincinnati (contract terminated by coach):

“The University reserves the right to terminate this Agreement

without cause at any time prior to its expiration by giving Coach

thirty (30) days written notice. In the event the University

terminates this Agreement without cause, it agrees to pay to

Coach, as liquidated damages in full satisfaction of its obligation

to Coach under this Agreement, the following:

(on file with author).

82. McCaffery Contract, supra note 66, ¶ 10.

83. Coaching Contract between Robert E. Huggins and W. Va. Univ. ¶ V(D)(1) (May 1, 2008)

(on file with author).

84. Coaching Contract between Bruce Pearl and Univ. of Tenn. art. XV(D) (Oct. 13, 2005) (on

file with author).

85. Meyer Contract, supra note 77, ¶ 5.2.

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Date of Termination Liquidated Damages

Before January 31, 2011 $2,500,000

Before January 31, 2012 $2,000,000

Before January 31, 2013 $1,750,000

Before January 31, 2014 $1,500,000

After January 31, 2014 $1,000,000

The appropriate payment will be made within thirty (30) days of

termination.”

o SELF – University of Kansas: “In the event that Head Coach’s

employment is terminated without cause, [University] shall pay

Head Coach as liquidated damages, the remaining amount owed to

Head Coach under Sections 3 (Salary) and Section 8 (Professional

Services) for the balance of the contract period as well as all

payments as provided for under the terms of Section 4 of the

Retention Agreement dated April 1, 2008 . . . and should be due

and payable within sixty (60) days following Head Coach’s

termination.”

13. Limitation on Amount. Some termination without cause provisions

will limit the amount of liquidated damages the university is required to pay.

Some examples follow:

o O’LEARY - University of Central Florida: “The Association’s

liability for total payments made to Coach and George O’Leary

Enterprises, Inc. pursuant to Paragraphs 9.2 (A) and (B) above

shall be limited to a maximum cumulative amount of Five Million

Dollars, ($5,000,000), paid as liquidated damages for termination

of this Agreement by the Association without cause. In addition,

no more than $1M[illion] shall be paid to Coach in any single year

after the year of termination.”

o MILES - LSU: “Upon termination of COACH’S employment

without cause during the term or extended term of this Agreement,

the amount of liquidated damages due COACH shall not exceed

Eighteen Million Seven Hundred Fifty Thousand Dollars

($18,750,000).”

86. Coaching Contract between Lyle “Butch” Jones and Univ. of Cincinnati ¶ 5(b) (Dec. 16,

2009) (on file with author).

87. Self Contract, supra note 19, ¶ 12.

88. Coaching Contract between George J. O’Leary and Univ. of Cent. Fla. ¶ 9.2(C) (July 1,

2006) (on file with author) [hereinafter O’Leary Contract].

89. Amendment to Coaching Contract between Les Miles and La. State Univ. ¶ 13(A) (Mar.

14, 2008) (on file with author).

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14. Resignation Considered Termination Without Cause. A negotiated

resignation in some instances will be considered a termination without cause:

o STOOPS - University of Arizona (terminated): “[A]t any time

when no grounds exist for termination for cause under Paragraph

17, ‘termination without cause’ shall include a nominal

resignation made under circumstances when the Coach has been

explicitly notified by the Director of Athletics or the President of

the University that he would be terminated if he did not resign;

and such a nominal resignation shall not be considered to be

termination by the Coach under Paragraph 19 [Termination by

Coach] but shall be considered termination by University without

cause and shall be subject to this paragraph 18.”

Depending on which terms are included and how they are written,

termination without cause provisions may work for or against either a coach or

university. As such, it is necessary to determine the parties’ needs and

expectations to draft the most effective contract.

III. TERMINATION WITHOUT CAUSE: BEST PRACTICES

In reviewing numerous coaches’ contracts, it is apparent what a well-

drafted termination without cause provision must contain in order to

adequately answer some of the issues that are necessary to its interpretation

and implementation. These provisions include:

1. Written Notice. The university should give written notice of the

university’s intent to terminate the contract without cause and the effective

date of the termination.

2. Payment Amount and Format. The provision should contain with

specificity the amount and the format in which the coach is to be paid by the

university along with the time frame that such payment should be made. The

provision should also specify the maximum amount the university will pay as

liquidated damages.

3. Liquidated Damages. The university and coach must stipulate that the

amount of liquidated damages was bargained for, agreed to, and does not

constitute a penalty. The contract should also stipulate that the amount

constitutes reasonable and adequate compensation for the damages suffered by

the coach by virtue of said termination without cause.

4. Release. Upon the payment of the contracted amount, the coach should

release, either as part of the contract or by virtue of a separate agreement, the

90. Coaching Contract between Michael Stoops and Univ. of Ariz. ¶ 18 (Dec. 1, 2003) (on file

with author).

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362 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

university from any further liability or responsibility.

5. Benefits. The contract should clearly specify which, if any, benefits

provided for by either the university or by the contract continue or cease as a

result of the termination without cause.

6. Withholding. The provision should specify whether the university will

continue to withhold state and federal taxes or other deductions much in the

same way as though the coach was still being paid as if he was an employee.

7. Interest upon Default. The contract provisions should specify what

occurs in the event that the university fails or breaches its obligation. This

provision may include the payment of a specified amount of interest on

accruing obligations, the installment obligations becoming accelerated in the

event of default or breach, and the payment of attorney fees by the university

in the event of a collection action or a lawsuit.

8. Reassignment. The provision should state that the university has no

right to reassign the coach to another position in the event it determines to

terminate the coach without cause.

9. Death or Disability. The contract provision should state with

specificity what occurs in the event the coach either dies or becomes disabled

during the period of payment of liquidated damages and cannot fulfill his

obligation to mitigate damages.

10. Collateral Benefits. The provision should specifically indicate that

liquidated damages are the only damages that the coach will be paid under the

termination without cause provision and that any and all collateral benefits

such as incentives, supplemental income, perquisites, and the like cease to

accrue or be paid upon termination.

11. Records Return. The provision will require the coach to return any

and all documents, files, records, and materials, whether in paper or electronic

format, to the university upon the occurrence of a termination without cause.

12. Resignation. Sometimes the coach and university will negotiate a

resignation as being the public perception of a termination without cause. The

contract should indicate that substance over form will dictate and that the

termination without cause provision will prevail in the event of a resignation.

13. Obligation to Mitigate. The provision may require a lump sum

payment as liquidated damages. If the provision provides for such, it should

indicate that, as a result, the coach has no obligation to mitigate. The coach

may also receive installment payments, and mitigation may not be required; in

this case, and a statement of no obligation should be clearly stated.

When a coach without a contractual obligation to mitigate damages is

terminated before the expiration of his or her contract, the university may be

left with an enormous financial burden. In these instances, the university may

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consider looking to common law mitigation of damages principles for a

solution to its financial woes.

IV. LEGAL PRINCIPLES FOR MITIGATION OF DAMAGES IN EMPLOYMENT

CASES

Aside from the high salaries and national prestige of high-profile

collegiate coaches, they are just employees governed by employment law

principles. Thus, an exploration of mitigation of damages principles within

the employment context will help a university understand how to further

protect itself contractually.

A. Definition and Purpose

The doctrine of mitigation of damages, which has been recognized by

every jurisdiction, requires the plaintiff, after an injury or breach of contract,

to make reasonable efforts to alleviate the effects of the injury or breach.

More specifically, a plaintiff may not recover certain avoidable damages when

he fails to take reasonable actions after an injury occurred.

The plaintiff is

not required to make extraordinary efforts, which may cause an unreasonable

burden, to ensure no damages are ultimately suffered.

Efforts that are

undertaken by the non-breaching party to mitigate damages do not need to be

successful as long as they are reasonable.

The purpose of the doctrine of mitigation of damages is to avoid economic

and physical waste and to avoid further harm by making it incumbent upon the

injured party to take affirmative steps to reduce, avoid, or mitigate his loss.

The affirmative obligation to mitigate is a condition precedent to receiving

agreed upon damages.

B. Reasonable Good Faith Efforts

In regard to a breach of an employment contract, an employee who can

establish the fact that he suffered a compensable injury as a result of being

terminated must take reasonable steps to mitigate damages by making

reasonable efforts to obtain and maintain comparable employment.

91. See RESTATEMENT (SECOND) OF CONTRACTS § 350(1) (1981).

92. Id. § 350(1) cmt. b.

93. Id.

94. Id.

95. Id. § 350 cmt. a.

96. See id. § 350 cmt. b.

97. Wilson v. Union Pac. R.R., 56 F.3d 1226, 1232 (10th Cir. 1995).

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364 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

There are several factors that may be considered in attempting to

determine if an employee has demonstrated a good faith effort to obtain

comparable employment:

 Did the employee create documentation of all job search activity,

including records of résumés sent, advertisements responded to,

phone logs, mail logs, and employment events attended?

 Did the employee document all expenses of the job search, which

can be elements in the recovery?

 Did the employee demonstrate the reasonableness of the scope of

the search?

100

 Did the employee expand the types of employment considered as

time passed?

101

 Did the employee consult with employment services and

counselors?

102

 Did the employee discuss job opportunities with friends and

acquaintances?

103

 How much time did the employee devote to the task of finding

comparable employment?

104

 What was the availability of comparable positions in the relevant

job market?

105

 Did the employee pursue all known comparable employment

opportunities in the relevant job market?

106

 How many job applications were submitted by the employee?

107

 A decision by the employee to become self-employed.

108

However, self-employment must be a “reasonable alternative to

finding other comparable employment.”

109

98. See Bannister v. Bemis Co., 556 F.3d 882, 886–87 (8th Cir. 2009).

99. See Michael B. Kelly, Living Without the Avoidable Consequences Doctrine in Contract

Remedies, 33 SAN DIEGO L. REV. 175, 183 (1996).

100. See Pacesetter Corp. v. Barrickman, 885 S.W.2d 256, 263 (Tex. App. 1994).

101. See Hayes v. Yale-New Haven Hosp., 844 A.2d 258, 285 (Conn. Super. Ct. 2001).

102. See Labriola v. Pollard Grp., Inc., 100 P.3d 791, 797 (Wash. 2004).

103. See Trainor v. Hei Hospitality, LLC, 699 F.3d 19, 30 (1st Cir. 2012).

104. See Hayes, 844 A.2d at 285.

105. See Hertz Equip. Rental Corp. v. Barousse, 365 S.W.3d 46, 59 (Tex. App. 2011).

106. See Booker v. Taylor Milk Co., 64 F.3d 860, 864 (3d Cir. 1995).

107. See Kiely v. Heartland Rehab. Servs., 360 F. Supp. 2d 851, 858 (E.D. Mich. 2005).

108. See Smith v. Great Am. Rests., Inc., 969 F.2d 430, 438 (7th Cir. 1992).

109. See id.

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 A decision by the employee to attend school.

110

Idleness will not satisfy the duty to mitigate damages.

111

Accordingly,

“‘the reasonableness of the effort [undertaken by the plaintiff] to find

substantially equivalent employment should be evaluated in light of the

individual’s background and experience and the relevant job market.’”

112

Currently, employment law does not have a specified duration of time for

which an employee must conduct a job search in order for it to be considered

“reasonably diligent.”

113

However, for the purposes of adequately mitigating

damages, the plaintiff should “continue a vigorous search, even if it means

reapplying to employers for jobs that may have opened in the interim

following initial applications, and to document the search with care.”

114

C. Comparable Employment

An individual has the right to select his own line of work, profession, or

calling and will not be required to seek employment outside of the scope of his

chosen field in order to mitigate damages that may be sustained as a result of a

termination of his employment contract.

115

A terminated employee has a duty

to mitigate damages by accepting employment that is found to be similar to the

employment that was expected by his contract.

116

“However, a plaintiff’s duty

to mitigate his damages is not met by using reasonable diligence to obtain any

employment; the employment must be substantially equivalent

employment.”

117

The employee within this context is not required to mitigate damages by

accepting employment that is found to be within the same general field of

work that was previously held by the employee but that is outside of his

110. See Dailey v. Societe Generale, 108 F.3d 451, 457 (2d Cir. 1997).

111. See In re Davidson, 978 A.2d 1, 5 (Vt. 2009).

112. Id. at 5 (quoting NLRB v Westin Hotel, 758 F.2d 1126, 1130 (6th Cir. 1985)).

113. See 7 EMPLOYMENT COORDINATOR § 72:45 (2013).

114. 2 EMPLOYMENT DISCRIMINATION COORDINATOR § 62:72 (2013).

115. See Mason Cnty. Bd. of Educ. v. State Superintendent of Sch., 295 S.E.2d 719, 723–26

(W. Va. 1982).

116. Peters v. Rivers Edge Mining, Inc., 680 S.E.2d 791, 815 (W. Va. 2009) (“Unless a

wrongful discharge is malicious, the wrongfully discharged employee has a duty to mitigate damages

by accepting similar employment to that contemplated by his or her contract if it is available in the

local area, and the actual wages received, or the wages the employee could have received at

comparable employment where it is locally available, will be deducted from any back pay award;

however, the burden of raising the issue of mitigation is on the employer.”) (quoting Mason Cnty. Bd.

of Educ., 295 S.E.2d at 719–20) (emphasis omitted).

117. Finch v. Hercules Inc., 941 F. Supp. 1395, 1421 (D. Del. 1996) (citing Booker v. Taylor

Milk Co., 64 F.3d 860, 866 (3d Cir. 1995)).

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366 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

specialized area.

118

Therefore, an employee is not required to accept

employment that is not “substantially equivalent” to the employee’s prior

employment.

119

A plaintiff, in mitigating his damages, will not be required to

accept a new position that is “less favorable” in its contractual terms than his

prior employment.

120

However, a discharged employee may have a duty to

accept a paying job that is lower than the compensation that he received from

his previous employment after an extended but otherwise unsuccessful search

for a job.

121

Two jobs are comparable or substantially similar if they are of the same

nature and if the pay, benefits, and working conditions are substantially

similar.

122

Generally, an employee will not be required to travel any distance

in order to obtain new employment, although distance is one of the factors that

is considered in evaluating the reasonable diligent efforts that were used by the

employee.

123

In following that same rationale, several courts have found that

discharged employees are not obligated to accept lesser employment, nor are

they required to relocate to a new community.

124

Although this may be the

general rule, this finding may be difficult in its application to coaching

contracts. In order for a discharged coach to find employment that will be

deemed “comparable” to mitigate his damages, he may be required to relocate

to a different community and conference or even to a different state.

The duty that is placed upon a plaintiff to mitigate damages by obtaining

comparable employment does not require the plaintiff to accept a position that

will cause personal embarrassment or great hardship.

125

118. Walmsley v. Brady, 793 F. Supp. 393, 395 (D.R.I. 1992) (finding that the plaintiff, who

was a trained surgical veterinarian, was not required to alter her professional career path by practicing

veterinary medicine without performing an extensive amount of surgeries or by serving as an

administrative veterinarian in order to mitigate damages).

119. Vaughn v. Sabine Cnty., 104 F. App’x 980, 984 (5th Cir. 2004).

120. Mallek v. City of San Benito, 121 F.3d 993, 997 (5th Cir. 1997). In this case, a plaintiff’s

duty to mitigate damages for a breach of an employment contract did “not include the duty to accept a

new and different bargain with terms less favorable than those to which he had previously agreed.”

Id.

121. Meyer v. United Air Lines, Inc., 950 F. Supp. 874, 876–77 (N.D. Ill. 1997). In this case,

the plaintiff failed to mitigate damages when she accepted a part-time position at one half of her

former pay without conducting a search for a full-time job. Id.

122. Cal. Sch. Emps. Ass’n v. Pers. Comm’n, 106 Cal. Rptr. 283, 288–89 (Ct. App. 1973).

123. RESTATEMENT (SECOND) OF AGENCY § 455 cmt. d (1958); Hadra v. Herman Blum

Consulting Eng’rs, 632 F.2d 1242, 1246 (5th Cir. 1980); Salem Cmty. Sch. Corp. v. Richman, 406

N.E.2d 269, 275 (Ind. Ct. App. 1980) (quoting Seco Chems., Inc. v. Stewart, 349 N.E.2d 733, 740–41

(Ind. Ct. App. 1976)).

124. See, e.g., Moore v. Univ. of Notre Dame, 22 F. Supp. 2d 896, 907 (N.D. Ind. 1998).

125. Dep’t of Transp. & Pub. Facilities v. Miller, 145 P.3d 521, 532 (Alaska 2006).

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D. Offset

The amount of damages a terminated employee may be awarded is offset

by any income received from actual post-termination employment or by the

amount of income that would have been received if the employee had satisfied

his obligation to mitigate damages.

126

An employee must use reasonable

diligence to mitigate damages, and any amount that may have been earned

through such efforts is offset against the damages caused by the breach.

127

The measure of said damages is based on “the contract price for the unexpired

term less what the employee has earned, or by reasonable diligence in

mitigation of damages could have earned, in other employment since the

discharge.”

128

A discharged employee’s recovery of damages will “place the

[employee] in the same economic position the [employee] would have attained

if the contract had been performed.”

129

The duty of “mitigation places no

greater burden on a non-breaching party than to make a reasonable effort to

minimize loss, and a party who tries to do so, but fails, will recover the total

damages owed in each case.”

130

Therefore, an employee who contracted for

damages or has bargained for liquidated damages will receive those damages

minus any monies that are earned from comparable employment or, in the

alternative, monies that the employee could have earned if the employee had

used reasonable diligence to obtain comparable employment after the

discharge. In agreeing to a liquidated damages provision, the parties bargain

in order to prevent a claim that will permit the other party to be unjustly

enriched if the liquidated damages provision is enforced without offsetting the

benefits received by the non-breaching party.

131

E. Burden of Proof

The concept of a “burden of proof” is referred to as establishing by a

126. RESTATEMENT (SECOND) OF CONTRACTS § 350 cmt. b (1981).

127. Murphy v. Gulf Consol. Int’l, Inc., 666 S.W.2d 383, 383 (Tex. App. 1984).

128. Dep’t of Natural Res. v. Evans, 493 N.E.2d 1295, 1302 (Ind. Ct. App. 1986); Dunkin’

Donuts of Am., Inc. v. Minerva, Inc., 956 F.2d 1566, 1582 n. 47 (11th Cir. 1992) (“‘The measure of

damages recoverable by an employee wrongfully discharged before the expiration of an employment

contract is the wages he would have earned under the contract less what he did in fact earn or in the

exercise of proper diligence might have earned in another employment.’”) (quoting Nat’l Med. Care,

Inc. v. Zigelbaum, 468 N.E.2d 868, 876 (Mass. App. Ct. 1984)).

129. JOHN D. CALAMARI & JOSEPH M. PERILLO, THE LAW OF CONTRACTS § 14.4 (4th ed.

1998).

130. Lisa A. Fortin, Note, Why There Should Be a Duty to Mitigate Liquidated Damages

Clauses, 38 HOFSTRA L. REV. 285, 292 (2009).

131. Vrgora v. L.A. Unified Sch. Dist., 200 Cal. Rptr. 130, 135–36 (Ct. App. 1984).

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368 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

preponderance of the evidence what the truth of the basic proposition is,

132

i.e., “‘the burden of persuading the triers of fact that the existence of the fact is

more probable than its non-existence.’”

133

The defendant employer therefore

has the burden of production and the burden of persuasion in proving a

plaintiff’s failure to mitigate.

134

An employee’s failure to mitigate damages appropriately may be found if

an employee has not made a reasonable, diligent effort to find comparable

employment.

135

The burden of proof is placed upon the employer to show that

the employee, through the use of reasonable diligence, obtained or could have

obtained employment that is similar to the employee’s abilities.

136

The

employer is required to prove not only that the employee did not exercise

reasonable efforts in his attempt to obtain employment, but the employer must

also prove that suitable work was available.

137

The rationale for placing the

burden on the employer is that the “basic principles of equity and fairness

mandate that the burden of proof must remain on the employer because the

employer’s illegal discharge of the employee precipitated the search for

another job.”

138

Although the burden is placed on the employer to prove that

the employee failed to mitigate damages, the employee should nonetheless be

prepared to produce evidence that will demonstrate a good faith effort on the

part of the employee to find suitable alternative employment.

139

consideration of whether the plaintiff mitigated damages, the courts ask

whether the employee acted in a “‘reasonable manner consistent with what an

ordinarily prudent person would do in similar circumstances.’”

140

132. 29 AM. JUR. 2D Evidence §§ 171–73 (2008).

133. Transammonia Export Corp. v. Conserv, Inc., 554 F.2d 719, 723 (5th Cir. 1977) (quoting

FLA. STAT. § 671.1-201(8) (1976)).

134. Marks v. Prattco, Inc., 633 F.2d 1122, 1125 (5th Cir. 1981).

135. Johnson v. Spencer Press of Maine, Inc., 249 F. Supp. 2d 5, 7 (D. Me. 2003) (finding that

an employee failed to exercise reasonable diligence in mitigating damages).

136. See Sellers v. Delgado Coll., 902 F.2d 1189, 1194–95 (5th Cir. 1990).

137. Delliponti v. DeAngelis, 681 A.2d 1261, 1265 (Pa. 1996) (observing that in a breach of

employment contract case, the burden is on the employer to show that loss could have been avoided;

the employer may do so “‘by proving that other substantially equivalent positions were available . . .

and that [the employee] failed to use reasonable diligence in attempting to secure those positions.’”)

(quoting In re Edge, 606 A.2d 1243, 1247 (Pa. Commw. Ct. 1992)); Lee v. Scotia Prince Cruises Ltd.,

828 A.2d 210, 216 (Me. 2003) (finding that “[a] plaintiff has a duty to use reasonable efforts to

mitigate his or her damages, but because mitigation is an affirmative defense, the burden is on the

defendant to show that the plaintiff failed to take reasonable steps to mitigate damages”).

138. NLRB v. Westin Hotel, 758 F.2d 1126, 1130 (6th Cir. 1985).

139. Id.

140. Shelton v. Clements, 834 So. 2d 775, 783 (Ala. Civ. App. 2002) (quoting Carnival Cruise

Lines v. Goodin, 535 So. 2d 98, 103 (Ala. 1988)). A party is barred from recovering for losses that

were due to his failure to act reasonably. Id. at 783.

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In order to submit a failure to mitigate damages claim to the jury, the

employer must

[I]ntroduce substantial evidence that (1) there was something

the plaintiff could have done to mitigate his loss, (2) requiring

the plaintiff to do so was reasonable under the circumstances,

(3) the plaintiff acted unreasonably in failing to undertake the

mitigating activity, and (4) a causal connection exists between

the plaintiff’s failure to mitigate and the damages claimed.

141

The employer must prove “‘that, based on undisputed facts in the record,

during the time in question there were substantially equivalent jobs available,

which the plaintiff could have obtained, and that the plaintiff failed to use

reasonable diligence in seeking one.’”

142

Specifically, the employer must

prove the earnings that the discharged employee actually earned or may have

earned from alternative employment through the use of reasonable diligence

during the remainder of the contract term.

143

F. Failure to Mitigate

Courts have held that the failure to mitigate damages on the part of the

plaintiff is an affirmative defense that must be either asserted or it will be

waived on the part of the defendant.

144

The defendant then carries the burden

of raising the mitigation issue in its pleadings.

145

A defendant’s failure to

raise mitigation may cause the defense to be considered waived.

146

obligation is also placed on the defendant to sufficiently plead the defense,

which will in turn put the plaintiff on notice of the defense.

147

By considering the legal principles mentioned above when drafting

141. Vasconez v. Mills, 651 N.W.2d 48, 53–54 (Iowa 2002) (citing Greenwood v. Mitchell,

621 N.W.2d 200, 205 (Iowa 2001)) (holding that a defendant asserting a failure to mitigate damages

claim on the part of the plaintiff holds the burden of proving the elements of the defense).

142. Hughes v. Mayoral, 721 F. Supp. 2d 947, 967 (D. Haw. 2010) (quoting Odima v. Westin

Tuscon Hotel, 53 F.3d 1484, 1497 (9th Cir. 1995)).

143. Juvenile Diabetes Research Found. v. Rievman, 370 So. 2d 33, 34 (Fla. Dist. Ct. App.

1979); see generally Bornstein v. Neuman, 459 N.Y.S.2d 462 (App. Div. 1983).

144. Sayre v. Musicland Grp., Inc., 850 F.2d 350, 354 (8th Cir. 1988).

145. See id.

146. See FED. R. CIV. P. 8(c) (requiring a party to plead affirmative defenses); Modern Leasing,

Inc. v. Falcon Mfg. of Cal., Inc., 888 F.2d 59, 62–63 (8th Cir. 1989) (denying the defense’s post-trial

motion to amend pleadings to include a mitigation defense because the mitigation issue was not raised

during trial); Morgenstern v. Cnty. of Nassau, No. CV 04–58(ARL), 2009 WL 5103158, at *1

(E.D.N.Y. Dec. 15, 2009) (holding that a defendant’s failure to plead mitigation would mean that the

defense was waived).

147. City of Miami Beach v. Carner, 579 So. 2d 248, 255 (Fla. Dist. Ct. App. 1991).

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370 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

contractual provisions, attorneys should be able to effectively protect their

clients’ financial interests.

V. MITIGATION OF DAMAGES

A well-drafted mitigation of damages clause in the context of a college

coach’s contract will contain the following elements:

1. An affirmative obligation to mitigate;

2. A requirement that reasonable and diligent efforts be used to obtain

comparable employment;

3. A definition of what constitutes comparable employment;

4. The meaning of compensation;

5. An offset provision including the university’s continued liability

for any differential if amounts are offset;

6. A reporting function;

7. Notice of employment; and

8. Prospective rather than retroactive application.

1. Affirmative Obligation to Mitigate. An affirmative obligation to

mitigate is a basic tenet of contract law and requires, unless otherwise stated,

the coach to reduce damages owed from the terminating university by

undertaking acts of mitigation. Some examples follow:

o KELLY - University of Oregon: “Kelly agrees to mitigate

University’s obligations to pay liquidated damages . . . .”

148

o MURPHY - Eastern Michigan University: “The Employee is

required to mitigate the University’s obligations under [this]

section . . . .”

149

o CLAWSON - Bowling Green State University: “The University’s

obligation to any amount under Section 5.2.2 (a) shall be subject

to Coach Clawson’s duty to mitigate his damages.”

150

o MONTGOMERY - University of California: “Coach agrees to

mitigate UNIVERSITY’s obligations to pay damages that may be

sustained by virtue of termination . . . .”

151

o GOTTFRIED - NC State University: “COACH acknowledges his

obligation to minimize the payments due to him under section

148. Kelly Contract, supra note 47, ¶ 6.02(c).

149. Coaching Contract between Robert L. Murphy and E. Mich. Univ. ¶ 7.2.4 (Apr. 25, 2011)

(on file with author).

150. Coaching Contract between Dave Clawson and Bowling Green State Univ. ¶ 5.2.3(a)

(Dec. 11, 2008) (on file with author).

151. 2008 Montgomery Contract, supra note 20, ¶ 12.

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XIII(A) . . . .”

152

o CALIPARI - University of Kentucky: “Notwithstanding any other

provisions contained in this Agreement, Coach agrees to

reasonably mitigate the University’s obligation to pay liquidated

damages under this Agreement . . . .”

153

2. A Reasonable and Diligent Effort. A mitigation of damages provision

will require a reasonable and diligent effort to obtain employment. Some

examples follow:

o CREAN - Indiana University: “The Employee is required to use

his reasonable best efforts to mitigate . . . .”

154

o LONDON - University of Virginia: “Coach agrees to make

reasonable ongoing efforts in seeking employment commensurate

with his experience, in good faith . . . .”

155

o ROBINSON - Oregon State University: “COACH agrees to

mitigate . . . by making reasonable and diligent efforts to obtain

employment.”

156

o MILES - LSU: “COACH has the good faith duty and obligation to

seek to obtain similar or related employment . . . .”

157

o PELINI - University of Nebraska: “Coach shall use his . . . best

efforts to seek and secure substantially comparable employment

including the customary and reasonable terms and conditions of

compensation at the new employment, without structuring or

timing compensation to avoid mitigation.”

158

o CALIPARI - University of Kentucky: “Coach agrees . . . to make

reasonable and diligent efforts to obtain employment as soon as

possible after termination of this Agreement by the University.”

159

3. Comparable Employment. A mitigation of damages provision will

provide for the coach to seek on a good faith basis “comparable employment.”

Some examples follow:

o PELINI- University of Nebraska: “Coach shall use his . . . best

efforts to seek and secure substantially comparable

152. Gottfried Contract, supra note 76, ¶ XIII(B).

153. Calipari Contract, supra note 13, ¶ 7(b).

154. Crean Contract, supra note 16, ¶ 6.02(G).

155. London Contract, supra note 70, ¶ 7.3

156. Robinson Contract, supra note 67, ¶ 19(b).

157. 2007 Miles Amendment, supra note 14, ¶ 13(A).

158. Pelini Contract, supra note 15, ¶ 14(b).

159. Calipari Contract, supra note 13, ¶ 7(b).

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372 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

employment . . . .”

160

o KELLY - University of Oregon: “Kelly agrees to mitigate . . . by

making reasonable, good faith, and diligent efforts to obtain

comparable employment as soon as reasonably possible after

termination of this Agreement.”

161

A legal dispute involving the duty to mitigate damages in a coach’s

employment contract is found in Moore v. University of Notre Dame.

162

this case, the plaintiff, Joseph R. Moore, was the offensive line football coach

for the University of Notre Dame from 1988 to 1996.

163

Under his instruction,

the team’s offensive line was “ranked among the top ten in the country.”

164

December of 1996, Notre Dame terminated Moore’s employment.

165

Moore

alleged that head football coach Robert Davie told Moore that he “was fired

because he was ‘too old’ and would not be able to continue to coach for

another full five-year period.”

166

Notre Dame claimed that the reason behind

Moore’s termination was that he no longer measured up to the standards that

were set in the program, and Notre Dame further claimed that Moore made

inappropriate and intimidating comments to his players.

167

Notre Dame argued that Moore was not entitled to front pay because he

failed to take reasonable efforts to mitigate his damages.

168

Judge Allen

Sharp’s decision in this case addressed Moore’s duty to mitigate damages.

Judge Sharp stated:

Notre Dame finally argues that Moore is not entitled to front

pay because he failed to undertake reasonable efforts to

mitigate his damages. This Court disagrees. Generally, an

ADEA plaintiff satisfies the mitigation of damages

requirement that he use “reasonable diligence in attempting to

secure employment” by demonstrating his commitment to

seeking active employment and by remaining ready, willing

and able to work. However, a plaintiffs [sic] duty to mitigate

his damages is not met by using reasonable diligence to obtain

160. Pelini Contract, supra note 15, ¶ 14(b).

161. Kelly Contract, supra note 47, ¶ 6.02(c).

162. See generally 22 F. Supp. 2d 896 (N.D. Ind. 1998).

163. Moore v. Univ. of Notre Dame, 968 F. Supp. 1330, 1332 (N.D. Ind. 1997).

164. Id.; see also Coach Who Tackled Age Discrimination Dies, USA TODAY (July 6, 2003),

http://usatoday30.usatoday.com/sports/college/football/2003-07-06-moore-obit_x.htm.

165. Moore, 968 F. Supp. at 1332.

166. Id.

167. See Moore, 22 F. Supp. 2d at 905–06.

168. Id. at 906.

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any employment, rather the employment must be comparable

employment. The Seventh Circuit has defined “comparable

work” as a position that affords “virtually identical

promotional opportunities, compensation, job responsibilities,

working conditions and status” as the previous position. The

goal of mitigation is to prevent the plaintiff from remaining

idle and doing nothing. Furthermore, an employee is not

required to go to heroic lengths in attempting to mitigate his

damages, but only to take reasonable steps to do so.

Furthermore, a claimant has no obligation to accept lesser

employment . . . or relocate to a new community.

169

Judge Sharp further found:

When evaluating the reasonableness and duration of a job

search a court may consider the plaintiff’s background and

individual characteristics. Moreover, it is the defendant’s

burden to prove that a plaintiff has failed to discharge his

duty. In the present case, Notre Dame has not met this

burden. Moore sought and obtained employment shortly after

his discharge. He currently works at three different jobs. The

fact that he did not accept a position at Cornell does not

indicate a failure to mitigate. That position offered a $40,000

salary, significantly less than Moore’s former salary, and

involved a tenuous situation where the head coach was

seeking other employment. Nor does the fact that Moore did

not apply for certain positions mentioned by defendant

indicate a failure to mitigate. Moore is presently sixty-six

years old. The options available to him are not as great as

those available to someone younger. Moore has demonstrated

his willingness to work, but, the chances of finding

“comparable work” as defined by the Seventh Circuit are

slim. It is this Court’s opinion that Moore used reasonable

diligence in attempting to obtain employment.

170

4. Definition of Comparable Employment. In some mitigation of

damages provisions, comparable employment will actually be specifically

defined. Some examples follow:

o SABAN - University of Alabama: “[E]mployment as a head or

assistant coach or as an administrator either at a college or

169. Id. at 906–07 (internal citations omitted).

170. Id. at 907 (internal citations omitted).

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374 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

university or with a professional sports organization (collectively

referred to hereafter as a ‘Coaching Position’)[.]”

171

o LONDON - University of Virginia: “Such payments shall be

reduced by earnings or other payments the Coach may

subsequently receive, or earn and defer receipt of, from

athletically-related employment or consulting. Such employment

or consulting includes but is not limited to any head coach or

assistant coaching or other athletic position with, or consulting or

other services of any kind provided to, any school, college,

university, professional or semi-professional athletic team or any

athletic conference, organization, league or association, or from

any sports-related position or services provided to any sports-

related entity, including without limitation any media entity.”

172

o CALHOUN - University of Connecticut (Retired): “Any such

payment shall be reduced, however, by an amount equal to the

compensation (to include salary and value of fringe benefits) the

Coach actually earns in any basketball-related position from the

date of termination to the end of this Agreement.”

173

o KELLY - University of Oregon: “Comparable employment

includes employment as a coach (not necessarily as a head coach)

at a university that competes on the NCAA Division 1-A (Football

Bowl Subdivision) or 1-AA (Football Championship Subdivision)

level or equivalent, or with a professional team.”

174

o O’LEARY - University of Central Florida: “Any sums payable

pursuant to paragraph 9.2 shall be reduced by any amounts earned

by Coach or George O’Leary Enterprises, Inc. during the

remaining term of the agreement in connection with Coach’s

employment as a coach of any college or professional football

team.”

175

o O’BRIEN - North Carolina State University (terminated): “If the

COACH obtains new employment, NC STATE’s financial

obligations under the liquidated damages provision shall be to pay

COACH the difference between what COACH would have

received as Head Football Coach at NC STATE for the term of

171. Saban Contract, supra note 12, ¶ 5.01(h).

172. London Contract, supra note 70, ¶ 7.3.

173. Coaching Contract between James A. Calhoun and Univ. of Conn. ¶ 10.2 (July 1, 2009)

(on file with author).

174. Kelly Contract, supra note 47, ¶ 6.02(c).

175. O’Leary Contract, supra note 88, ¶ 9.2(E).

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this Agreement and the salary in the new job.”

176

(There is no

definition of new employment).

o HOWLAND - UCLA (terminated): “[P]ayments made to Coach

. . . shall be reduced by any cash payments or other form of

consideration Coach, and/or any person or entity acting on

Coach’s behalf, receives from other sources, including University,

for services performed by Coach, including without limitation,

promotional, endorsement, coaching, or consultative services

during the period of time Coach would have been employed by

University if University had not so terminated this 2008 HC

Agreement.”

177

o CREAN - Indiana University: “[T]he Employee agrees that the

following employment or services opportunities shall constitute a

comparable position or opportunity for purposes of this provision;

media commentator with a national or regional network, broadcast

station or cable company, professional basketball assistant or head

coach, head men’s basketball coach at a Division I college or

university . . . .”

178

o MARSHALL - Wichita State University: “[B]y obtaining

comparable employment at a similar rate of compensation or other

opportunities within the scope of his expertise to provide personal

services for remuneration.”

179

o PINKEL - University of Missouri: “[T]hat any amounts received

by the Employee from other employment for services or obtained

as a consultant or rendered as a head or assistant football coach or

as an administrator or executive in a collegiate athletic department

or professional sports organization before the end of the term of

this Agreement, shall be offset against the amount set forth herein

to be paid by the University as liquidated damages.”

180

o RICHT - University of Georgia: “[T]he parties understand and

agree that the Association’s liability, if any, for payments

provided under this paragraph 15 shall be reduced by any and all

176. Coaching Contract between Thomas Patrick O’Brien, Jr. and N.C. State Univ. ¶ X(B)

(Dec. 8, 2006) (on file with author).

177. Howland Contract, supra note 51, ¶ 12(b).

178. Crean Contract, supra note 16, ¶ 6.02(G).

179. Coaching Contract between Gregg Marshall and Wichita State Univ. ¶ 8.3 (Apr. 16, 2011)

(on file with author).

180. Coaching Contract between Gary R. Pinkel and Univ. of Mo. ¶ 12 (Jan. 1, 2009) (on file

with author).

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376 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

compensation attributable to Richt’s coaching or providing

athletic administration services for any sports team (whether as a

head coach, assistant coach, athletic director or assistant athletic

director, or consultant); to Richt’s fundraising, talent evaluation or

consulting services to any sports team or athletics programs; or to

any Radio, TV, magazine, newspaper, movie, or other media

outlet appearance or commentary made by Richt after the date of

termination through the end of the Term. The Association’s right

to offset payment pursuant to this subparagraph shall not include

sums earned by Richt through passive investment or activities not

related to the foregoing.”

181

o TRESSEL - Ohio State University (contract terminated by coach):

“Coach is required to mitigate Ohio State’s obligations under this

Section 5.2 by making reasonable and diligent efforts (under the

circumstances and opportunities then prevailing) to obtain a

comparable employment position (for example, media

commentator, professional head or assistant football coach,

NCAA Division I head football coach) as soon as practicable

following such termination[.]”

182

o HOKE - University of Michigan: “[T]o obtain other football

related employment (such as a head or assistant coach of a

professional football team, head men’s football coach of an

NCAA Division I team, or media commentator) . . . .”

183

o GOTTFRIED - NC State University: “If the COACH obtains new

employment as a collegiate or professional basketball

coach . . . .”

184

5. Meaning of Compensation. In some mitigation of damages provisions,

the meaning of compensation is specifically defined:

o BRILES - Currently the Baylor University coach, but the contract

provision was taken from his prior contract with the University of

Houston: “For the purposes of this Section 6.4.5, ‘amounts earned

by Coach in the new position’ shall mean any and all

compensation received through Coach’s employment, including,

but not limited to, base salary, non-salary compensation,

181. Amendment to Coaching Contract between Mark Richt and Univ. of Ga. ¶ 15(E) (Jan. 1,

2006) (on file with author).

182. Coaching Contract between James P. Tressel and Ohio State Univ. ¶ 5.2(a) (Feb. 1, 2006)

(on file with author) [hereinafter Tressel Contract].

183. Hoke Contract, supra note 75, ¶ 4.01(b).

184. Gottfried Contract, supra note 76, ¶ XIII(B).

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consulting fees, bonuses, and any other compensation[.]”

185

o SABAN - University of Alabama: “For purposes of this

subsection, ‘gross compensation’ shall mean, without limitation,

gross income from base salary or wages, talent fees, or other types

of compensation paid to Employee . . . , consulting fees,

honoraria, fees received by Employee as an independent

contractor, or other income of any kind whatsoever from a

Coaching Position.”

186

6. Offset Provision. In the event the coach receives monies from another

employer in his attempt to mitigate damages, there will always be an offset

provision against the monies that are owed from the university. Some

examples follow:

o HOKE - University of Michigan: “If the Head Coach is employed

in a football-related position or receives compensation related

thereto (e.g.[,] as a consultant) elsewhere after the University’s

termination of this Agreement pursuant to Section 4.01(a), then

the University’s obligation to pay the Head Coach as set forth in

Section 4.01(a) shall be reduced by Head Coach’s total

compensation from all such sources (except not including

employee reimbursements, benefits and costs associated with such

other position).”

187

o HEATH - University of South Florida: “Notwithstanding the

foregoing, if Coach subsequently obtains employment in another

basketball coaching capacity prior to the expiration of the term of

the Agreement, then the following shall apply: (i) if Coach’s new

base salary is greater than the Base Salary, then the University’s

obligations to make payment(s) under this Section shall cease as

of the first date of new employment; or (ii) if Coach’s new base

salary is less than the Base Salary, then the University shall only

be obligated to pay for the difference between the two amounts,

less any salary increases paid by the new employer, through the

expiration of the term of the Agreement.”

188

o KELLY - University of Oregon: “Should Kelly obtain such

comparable employment, University’s financial obligations under

185. Coaching Contract between Art Briles and Univ. of Hous. ¶ 6.4.5 (Jan 1, 2004) (on file

with author).

186. Saban Contract, supra note 12, ¶ 5.01(h).

187. Hoke Contract, supra note 75, ¶ 4.01(b).

188. Coaching Contract between Stan Heath and Univ. of S. Fla. ¶ 11(a) (May 24, 2007) (on

file with author).

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378 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

this Agreement, including Section 6.02.b, shall cease so long as

Kelly’s monthly compensation from such comparable

employment, excluding reasonable and usual non-monetary fringe

benefits such as health and life insurance, club memberships and

use of vehicles, is equal to or greater than University’s obligation

to pay liquidated damages under Section 6.02.b, prorated on a

monthly basis.

If Kelly’s monthly compensation, excluding reasonable and

usual non-monetary fringe benefits, from such comparable

employment is less than University’s monthly obligation to pay

liquidated damages under Section 6.02.b, the amount of

University’s obligation to pay liquidated damages shall be reduced

by the amount of Kelly’s compensation, excluding reasonable and

usual non-monetary fringe benefits, from such comparable

employment.

If, after diligent efforts to obtain comparable employment as

described above, Kelly obtains employment that is not comparable

employment, his income from such employment (plus or minus

raises and adjustments) shall be off-set against University’s

obligations under 6.02.b herein.”

189

o CHIZIK - Auburn University (terminated): “In the event Coach

obtains other employment after his termination or receives income

from any other source (such as for work as an announcer or

analyst, consultant, independent contractor, speaking engagement

fees, income from writing a book, or appearance fees), the amount

earned or received by Coach will be subtracted from the amount

Auburn owes Coach under this Paragraph.”

190

o MONTGOMERY - University of California: “Notwithstanding

the liquidated damages provision below, it is expressly understood

and agreed that any amounts to be paid to Coach pursuant to this

Paragraph 12 will be reduced by any amounts received, or to be

received at a later date, by Coach from other sources in and for

rendition of services by Coach during the period of time in which

Coach, pursuant to this Employment Contract, would have been

employed by the UNIVERSITY if this Contract had not been

terminated by the UNIVERSITY without cause; provided,

however, under no circumstances will Coach be required to

reimburse the UNIVERSITY for UNIVERSITY compensation

189. Kelly Contract, supra note 47, ¶ 6.02(c).

190. Chizik Contract, supra note 53, ¶ 18(b).

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previously paid.”

191

o TRESSEL - Ohio State University (contract terminated by coach):

“Notwithstanding any other provisions of this Section 5.2, if

Coach is employed elsewhere during the twelve (12) month period

post-termination in a comparable employment position (for

example, media commentator, professional head or assistant

football coach, NCAA Division 1 head football coach), then Ohio

State’s obligation to pay Coach Two Million Dollars

($2,000,000.00) set forth in this Section 5.2 shall be reduced by

Coach’s total compensation (from all sources directly related to

such comparable position (except not including the employee

benefits costs associated with such comparable position)) for the

twelve (12) month period post-termination. Ohio State shall pay

such amount (which shall not include employee benefits for the

period that Coach is employed in such comparable position) in

equal quarterly installments for a period not to exceed twelve (12)

months after the date of termination, except the installments may

not be equal if Coach is employed in such a comparable

employment position (thus reducing Ohio State’s obligation) and

Ohio State has already paid Coach certain installments pursuant to

this Section 5.2 before Coach has accepted such a comparable

employment position[.]”

192

7. Notice of Employment. Mitigation of damages provisions will require

the coach to give notice of new employment. A few examples follow:

o SABAN - University of Alabama: “While the University’s

obligation to pay Liquidated Damages remains in effect, within

fourteen (14) days after accepting any employment in a Coaching

Position and within fourteen (14) days after the end of each month

thereafter, Employee shall furnish to the University an accounting

or report of all gross compensation received by Employee during

the immediately preceding month from the Coaching Position.

The University shall reduce the amount of the monthly Liquidated

Damages payments due and payable to Employee based upon the

gross compensation for the immediate previous month as reflected

in the Coaching Position gross compensation report. If Employee

fails or refuses either to notify the University of Employees

employment in a Coaching Position or to furnish the monthly

191. Coaching Contract between Michael Montgomery and Univ. of Cal. ¶ 12 (Feb. 27, 2009)

(on file with author).

192. Tressel Contract, supra note 182, ¶ 5.2(b).

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380 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

Coaching Position gross compensation reports after receiving a

formal, written request to do so from the University, then, after

giving Employee fourteen (14) days’ written notice, the

University’s obligation to continue paying Liquidated Damages to

Employee shall cease.”

193

o GOTTFRIED - NC State University: “COACH shall promptly,

upon acceptance of other employment as a collegiate or

professional basketball coach, notify the Director of Athletics in

writing of such employment and the total compensation to be paid

to COACH for the employment during the term of this Agreement

(had it naturally expired). In addition, COACH agrees to provide

NC STATE with a copy of his W-2 form for each calendar year as

long as NC STATE has the obligation to make payments under

section XIII.”

194

o CREAN - University of Indiana: “[T]he Employee shall promptly

report to the University on a quarterly basis on all compensation

received or earned by him (or by any of his affiliates) during the

prior three-month and six-month periods. The University may

reduce future base []salary continuation payments by any amount

that the University is entitled to offset as a consequence of the

foregoing provisions and at the conclusion of the base salary

continuation period, the Employee shall be obligated to promptly

pay to the[] University the full amount of any offset and reduction

due to mitigation that the University is entitled to that was not

fully recouped by the University[] through a previous offset and

reduction.”

195

8. Prospective Rather than Retroactive Application. Any amount received

in mitigation of damages that acts as an offset against the amount being paid

contractually by the university shall apply prospectively, not retroactively. So

for instance, a coach was terminated without cause and the liquidated damage

amount was $3,600,000, payable in equal monthly installments of $100,000

per month for 36 months.

196

The coach obtained new employment after the

eighteenth month payment. The coach’s new package was equal to double

what the university was obligated to pay during the liquidated damage period.

The excess could not be used to retroactively offset those amounts that had

193. Saban Contract, supra note 12, ¶ 5.01(h).

194. Gottfried Contract, supra note 76, ¶ XIII(B).

195. Crean Contract, supra note 16, ¶ 6.02(G).

196. The information in this paragraph comes from a confidential case worked on by Author

Greenberg.

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previously been paid or to require, in the alternative, that the coach reimburse

the university for those amounts.

Although these contractual terms seem straightforward and simple in

theory, the practical application of mitigation of damages provisions to

coaching contracts is slightly more difficult.

VI. PRACTICAL EXPERIENCE—DIFFICULTY WITH MITIGATION OF DAMAGES

CLAUSES

I served as an expert witness in a case involving the interpretation and

implementation of a mitigation of damages clause.

197

The coach was

terminated without cause. Thus, the termination triggered the mitigation of

damages clause, and it became a disputed issue.

A. The Contractual Provision

The coach’s contract provided with respect to termination without cause

and mitigation of damages as follows:

(1) Severance/Liquidated Damages. If, during the term of

this Agreement, Coach’s employment is terminated by the

Team for a reason other than for Cause, the Team shall

continue to pay Coach his applicable monthly salary (i.e., as

set forth and in accordance with the Section above), for the

remainder of the period this Agreement was to have remained

in effect. Such salary continuation payments shall be made on

a semi-monthly basis on the Team’s regular payroll cycle and

shall be paid less all applicable taxes, withholdings, payroll

deductions. In addition, such salary continuation payments

shall be subject to the mitigation and set-off provisions

contained in the Section below.

Notwithstanding any of the foregoing, the Team shall incur no

obligation to provide severance benefits under this Section if

his employment is terminated by disability or by death under

the provisions of the Sections above.

(2) Mitigation. Coach agrees to mitigate the Team’s

obligation to pay liquidated damages under this Section. The

Team shall be entitled to off-set and reduce any and all

197. The “I” in this sentence and the following information regarding the arbitration concerns

Author Greenberg. Identifying information about the participants of the arbitration cannot be

included due to the confidentiality of the arbitration.

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382 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

amounts of compensation that may be due to Coach from the

Team under this Section against any amounts earned by

Coach under contracts with other individuals or entities

provided that this right of set-off is limited to a head coaching

and/or general manager position with the NBA club or NCAA

institution. Notwithstanding the foregoing, it is the specific

agreement between Coach and the Team that the operation

and implementation of this set-off provision shall never result

in Coach’s receipt of compensation less than would have been

received for the period this Agreement was to have remained

in effect.

198

The agreement was subject to arbitration, which stated as follows:

a. Arbitrable Claims. All disputes between Coach (and his

attorneys, successors, and assigns) and the Team (and its

affiliates, partners, directors, officers, employees, agents,

successors, attorneys, and assigns) of any kind whatsoever,

including, without limitation, all disputes relating in any

manner to the employment or termination of Coach, and all

disputes arising under this Agreement, (“Arbitrable Claims”)

shall be resolved by arbitration. All persons and entities

specified in the preceding sentence (other than the Team and

Coach) shall be considered third-party beneficiaries of the

rights and obligations created by this Section on Arbitration.

Arbitrable Claims shall include, but are not limited to,

contract (express or implied) and tort claims of all kinds, as

well as all claims based on any federal, state, or local law,

statute, or regulation, excepting only claims under applicable

workers’ compensation law and unemployment insurance

claims. Arbitration shall be final and binding upon the parties

and shall be the exclusive remedy for all Arbitrable Claims,

except that the Parties may seek provisional relief as provided

by law. The parties hereby waive any rights they may have to

trial by jury in regard to arbitrable claims.

b. Procedure. Arbitration or Arbitrable Claims shall be in

accordance with the Employment Dispute Resolution Rules,

except as provided otherwise in this Agreement. In any

arbitration, the burden of proof shall be allocated as provided

in applicable law. Either party may bring an action in court to

198. Coaching Contract between X and Univ. Y (on file with author).

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compel arbitration under this Agreement and to enforce an

arbitration award. Otherwise, neither party shall initiate or

prosecute any lawsuit or administrative action in any way

related to any Arbitrable Claim. All arbitration hearings

under this Agreement shall be conducted in . . . . The Federal

Arbitration Act shall govern the interpretation and

enforcement of this Section.

c. Confidentiality. All proceeds and all documents prepared

in connection with any Arbitrable Claim shall be confidential

and, unless otherwise required by law, the subject matter

thereof shall not be disclosed to any person other than the

parties to the proceedings, their counsel, witnesses and

experts, the arbitrator, and, if involved, the court and court

staff.

d. Continuing Obligations. The rights and obligations of

Coach and the Team set forth in this Section on Arbitration

shall survive the termination of Coach’s employment and the

expiration of this Agreement.

199

B. Team and Coach’s Allegations

The coach was terminated without cause, and approximately twenty-one

months passed before he procured new employment. Consequently, the team

stopped paying the coach the amounts required under the termination without

cause provision. The coach then filed for arbitration seeking the liquidated

damages he believed he was entitled to pursuant to the contract. The team

defended on the basis that the coach had a statutory common law and

contractual obligation to mitigate damages and failed to do so; as a result, this

failure relieved the team completely or partially from the obligation to make

payment. The team further defended that any amount the coach was entitled

to claim must be offset and reduced by those amounts he actually earned or

could have earned after his discharge by the team. The team asserted that its

obligation was to make payments that were conditioned on the coach’s

common law, statutory, and contractual mitigation obligations.

The mitigation provision reproduced above indicates that the coach had a

clear duty to take steps to minimize any loss by making a reasonable effort to

find comparable employment. While the team continued to pay the coach his

salary after termination, the coach breached his mitigation obligation during

the same period by, among other things, failing to make a reasonable effort to

199. See supra notes 197–98.

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384 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

seek mitigating employment and by purposely not seeking such employment.

In its counterclaim, the team indicated that, as a result of the coach’s

breach, it was entitled to retain all amounts withheld from the coach to date in

addition to a return of some or all of the monies paid to the coach since his

termination.

The team alleged that the coach failed to engage in a good faith and

diligent effort to mitigate damages. The issues raised with respect to the lack

of good faith effort to obtain employment were as follows:

1. The absence of an affirmative marketing plan;

2. A passive and inactive approach versus a proactive approach to

obtaining employment;

3. Minimal attempts to market the coach, indicated by the lack of

marketing material of a substantive nature on the coach for prospective

employers;

4. The coach was not positioned for potential employment openings;

5. The coach retained one of the leading representatives of coaches in the

industry, but there was little evidence that that representative was involved in

the placement effort at all; rather, a junior associate with little or no experience

was heading up the job procurement effort;

6. Inquiries and follow-up from the junior associate indicated a lack of

serious effort to place the coach;

7. Communications to prospective employers indicated a lack of a serious

interest; for example, only passive inquiries were made to the tune of “If

you’re interested, call me”;

8. There was a lack of follow-through with respect to any inquiries that

were made;

9. The agent adopted a strategy that is commonly referred to as “slow

play”;

10. There was a question as to whether the coach was really interested in

working by virtue of several public statements that he was not ready to work;

11. The coach was unwilling to leave a certain geographical area, only

wanted to be placed within a certain conference, and did not necessarily want

to move from his home in his current location;

12. There was an absence of any kind of paper trail and little evidence of

marketing materials, such as books, letters, or emails to potential employers;

13. There was no notebook or diary on the coach’s mitigation efforts;

14. The coach’s agents had conflict of interests that would have lessened

attempts to place the coach; and

15. The agents had other coaches in their client’s stable who were

interested in the mitigation jobs that were available during the mitigation

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period and who were willing to relocate.

The next area of concern in the arbitration was the issue of whether there

was the availability of comparable employment. The coach maintained that it

would be impossible for him to obtain another professional or collegiate job

after the termination and so close to the date of termination. With respect to

college jobs that became available, the coach maintained that the positions

available were not identical from the standpoint of location, compensation, job

responsibility, working conditions, and status. The coach claimed that he was

tainted by his lack of success in the National Basketball Association (NBA).

The coach also maintained that it was unreasonable to expect him to relocate

for a National Collegiate Athletic Association (NCAA) position.

The coach claimed that, although the language in the mitigation clause

defined comparable employment as any NCAA institution, it only meant

employment that was comparable from a monetary, job status, and location

status, not any NCAA job. As such, it was unreasonable to expect the coach

to move. Moreover, the available jobs for which he might be considered for

were low pay compared to the pay he obtained as a professional coach.

The team, of course, countered that the mitigation clause defining

comparability required reasonable steps and good faith to obtain a head coach

or general manager position in the NBA or at an NCAA institution. There was

no particular definition of an NCAA institution so it could have meant, at the

time, any Division I, II, or III institution. The clause did not limit the

obligation to obtain such positions in a particular region or a particular school

or conference, and it was the accepted norm that replacement jobs were not

regional but national in nature. Therefore, it was reasonable to expect the

coach to have to travel or relocate for an available position in the coaching

industry.

The team claimed that the mitigation clause could have actually included

written language that fit the coach’s interpretation of the clause and

restrictions could have been negotiated into the contract. The team further

maintained that there was a litany of NBA coaches who were fired and made it

back into the high college ranks thereafter, many of these top coaches around

the country were in the same age category as the coach after being fired, and

the clause, as drafted, applied to monies payable by the team in the present and

future and did not apply to any amounts previously paid.

The team additionally claimed that the coach’s agents did not negotiate

any of the restrictions related to mitigation in the contract either because they

did not have leverage or because they did not feel it was important. The team

maintained that the coach’s agents could have negotiated restrictions on the

type of NCAA institutions, geographic restrictions, or standards for what was

comparable compensation that would require a good faith effort.

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386 MARQUETTE SPORTS LAW REVIEW [Vol. 23:2

The word “comparable” was not used in the contract because no

restrictions were negotiated or contained in the contract. The contract did not

limit or restrict the coach’s obligation to mitigate. The team argued that the

coach could refuse to accept any position, but the team must offset the

amounts that he could have earned against the amounts payable by the team.

The coach’s lawyer argued that only amounts that were actually earned, not

the amounts that could have been earned, were to be offset against the amount

payable by the team.

The case involved an interpretation of what the mitigation clause meant in

the first place, whether the coach made a good faith effort to obtain

comparable employment, and what constituted comparable employment.

VII. CONCLUSION—BEST PRACTICES

Mitigation clauses are important in collegiate coaching contracts because

of the high rate of termination without cause and relocation in the coaching

industry. No two termination without cause and mitigation of damages

clauses are exactly alike. These clauses are individually crafted by a coach’s

representatives and university counsel, and there are many variations in the

industry as to the contents thereof.

For instance, two big name coaches in the SEC were recently fired,

University of Tennessee head football coach Derek Dooley and Auburn

University head football coach Gene Chizik.

200

The University of Tennessee owes Dooley $5 million in liquidated

damages, or approximately $102,040 per month through December 2016.

201

Moreover, Dooley is not required to mitigate damages.

202

The money is

guaranteed, meaning that any future employment he may obtain up to and

including December 31, 2016, will not alter what Tennessee is required to pay

him.

203

Under his latest contract amendment, Chizik is owed $7.5 million, payable

in equal monthly installments over the remaining duration of the agreement.

204

200. Associated Press, Firing a Coach Is Often About Balancing Wins and Losses with Dollars

and Cents, FOXNEWS.COM (Nov. 27, 2012), http://www.foxnews.com/sports/2012/11/27/firing-

coach-is-often-about-balancing-wins-and-losses-with-dollars-and-cents/ [hereinafter Firing a Coach];

Evan Woodbery, Buying out Derek Dooley and Staff Could Cost as Much as $9.3 Million over Four

Years, GO VOLS XTRA (Oct. 23, 2012), http://www.govolsxtra.com/news/2012/oct/23/buying-out-

derek-dooley-and-staff-could-cost-as/.

201. Woodbery, supra note 200.

202. Id.

203. Id.

204. Chizik Contract, supra note 53, ¶18(b); see also Woodbery, supra note 200.

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But Chizik, unlike Dooley, has a mitigation of damages obligation wherein if

Chizik

[O]btains other employment after his termination or receives

income from any other source (such as for work as an

announcer or analyst, consultant, independent contractor,

speaking engagement fees, income from writing a book, or

appearance fees), the amount earned or received by [Chizik]

will be subtracted from the amount Auburn owes

[him] . . . .

205

Chizik “acknowledges that he is required to use reasonable efforts to obtain

other employment[,] . . . income[, or both] from third parties, and he is

required to provide immediate written notice to the University Athletics

Director of such earnings or income . . . .”

206

Obviously, market leverage

would result in no obligation to mitigate and an agreed upon lump sum or

installment payment as liquidated damages. It is where one is required to

mitigate where issues start to arise.

In carefully reviewing the industry standard relative to what constitutes a

mitigation of damages clause and experiencing the implementation and

interpretation of such a clause first-hand as an expert witness, some

conclusions can be reached as to best practices relative to the drafting of

mitigation of damages clauses in coaches’ contracts:

1. The contract should clearly state that the coach has an affirmative

obligation to mitigate damages; that the right to receive liquidated

damages, as specified in the termination without cause clause, is

specifically conditioned on meeting and fulfilling that obligation;

and that liquidated damages are not guaranteed payments.

2. The obligation to mitigate damages requires a reasonable, diligent,

and good faith effort. These words are not easily definable, are

words of art, and should have a more substantive definition as to

their meaning. For instance, when does the obligation to mitigate

commence? Is it immediate or does the coach get some “rest

period” after termination? Is the coach, in order to meet the

mitigation obligation, required to have some form of marketing

plan? Is the coach required to maintain a “book” or time log with

respect to prospective job inquiries? Is the coach required to have

a list of targets based on job availability? Are written follow-ups

required to initial inquiries? A best practice clause will require

205. Chizik Contract, supra note 53, ¶18(b).

206. Id.

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specificity and definition as to what constitutes reasonable,

diligent, and good faith efforts to mitigate damages.

3. The obligation to mitigate requires a good faith effort to obtain

comparable employment. Comparable employment is another

term that needs to be specifically defined. Does comparable

employment mean identical or similar job status, responsibilities,

and compensation? Does comparable employment mean that a

head coach who was terminated without cause from an SEC job

paying four million dollars a year must take employment as a head

coach in the Atlantic Coast Conference at two million dollars a

year if available? Does comparable employment mean another

coaching job at the same division level or any coaching job at any

level in the NCAA? Does comparable employment mean a

similar job in a professional status as either a head coach or

assistant head coach? Does comparable employment mean an

administrative job such as a general manager, athletic director, or

front office staff? Does comparable employment mean income

from media outlet employment or other sports-related

employment, or does comparable employment mean income from

any source regardless of the job description? The obligation is to

make the coach whole for the liquidated damage amount, and the

responsibility to pay any difference is always with the university.

Maybe comparable employment ought to define an accepted

minimum compensation package that offsets the university’s

obligation rather than attempting a definition of comparable job

status, responsibilities, and compensation.

4. Because the college coaching market is national in nature, a good

faith and reasonable effort to obtain comparable employment

includes available coaching jobs on a national basis. That would

appear to be the most reasonable and understood meaning within

the industry. However, coaches oftentimes are not interested in

moving, want to stay within the same or similar conference, want

comparable employment to include designated schools, and want

to put some form of geographic limitation on movement. All of

this must be written into the contract to further define what

comparable employment is.

5. While the intent of mitigation of damages clauses is to make the

coach whole during the mitigation period, what offsets liquidated

damages also needs to be specifically defined. Does it include

salary, benefits, deferred compensation, personal service and

talent fees, income from outside sources, perquisites, bonuses, and

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other forms of compensation that may constitute the package? Or

should the offset be defined as anything that has economic value

that is paid by the subsequent employer?

6. Most mitigation of damages clauses have some form of reporting

function, which is a certification of the amounts that the coach has

received at the new employment to offset the university’s

responsibility. The reporting function and how one certifies

actually what is received to offset liquidated damages must be

more specific in detail.

7. Finally, if employment is obtained in contemplation of the

obligation to mitigate in a reasonable, diligent, and good faith

manner, is the offsetting compensation received by virtue of new

employment prospective or retroactive in nature and application?

My experience as an expert witness was telling with respect to the drafting

deficiencies in these clauses and how much is left up to guesswork and

interpretation.

207

A well-drafted mitigation of damages clause will

contemplate the specific items that I encountered as an expert witness and the

questions that I have raised in this Section.

VIII. SOME FINAL THOUGHTS

Termination and early firing are part of the coaching job landscape. The

back end of the contract may be as important as the front end. Therefore,

time, thought, and good draftsmanship must be given to termination clauses,

especially termination without cause, which are simply means of continued

payment. The problems inherent in a mitigation of damages clause are too

many to anticipate.

Bill Carr, former athletic director of the University of Florida and

University Houston, has stated:

[I]t’s best to identify a number to pay for liquidated damages

rather than trying to determine coaching related compensation

in the dismissed coach’s new circumstances. The amount of

time and effort required to report and verify becomes

prohibitive for both parties.

Today’s coaches’ compensation is so extreme, it’s hard for a

university not to insist on some reduction of the buyout total,

and that has to be more than just current value calculations.

Prospectively, the coach is likely to earn some money from

207. See supra note 197 and accompanying text.

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coaching related sources; that amount should be factored in to

achieve a fair number for liquidated damages.

208

Coaches, career, and contract consultant Thom Park has also stated:

Having participated with the coaching profession as an

advocate, a business and career advisor for three decades, I

have watched the escalation of coaching compensation in this

highly insecure and transient vocation. Institutional cost

liability for coaches terminated ‘not for cause’ has led to the

use of mitigation language in coaches contracts. The

employer’s hope here is that the terminated coach will find

new employment soon and reduce the former employer’s cost

in the liquidated damage settlement by offsetting that cost

with what is earned in the future. The fact is that similar

paying employment circumstances in such a highly

competitive arena are seldom found and certainly not quickly,

if at all. The terminated coach may also well need time off to

simply re-energize and heal psychologically. Given the

financial cost of the legal labor over any conflict in the

mitigation details, mitigations financial incentive to the coach

to avoid a quick reentry to the coaching ranks, and the

intrusiveness of the sports news with possible negative

institutional public relations, an optimal approach for the

school may well be to simply negotiate a damages settlement

amount and be done with the process. This number could be

paid in a lump sum or installments. When all is calculated, a

negotiated settlement amount devoid of any potential

mitigated claims is cleaner, simpler, and maybe best for the

school.

209

The better approach to an early terminated coach is simply a negotiated

amount as liquidated damages, which is paid either in lump sum or tax

structured pursuant to an agreement between the coach and the university

without any obligation whatsoever to mitigate or find offsetting employment.

The liquidated damages amount should be a number that is negotiated and

defined by the present value of those damages that the coach and the

university agree are to be paid for early termination. Unless a master

draftsman contemplates the many issues that arise with respect to what this

208. E-mail from William Carr, Carr Sports Assocs., Inc., to Author Greenberg (Oct. 30, 2012)

(on file with author).

209. E-mail from Thom Park, Founder and Principal, Thomas Park & Assocs., to Author

Greenberg (Dec. 17, 2012) (on file with author).

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2013] COACHES AND MITIGATION OF DAMAGES 391

obligation means, a simple no obligation to mitigate whatsoever is the simplest

solution to keep these matters out of the world of arbitration and the courts.

Mike Gundy, Oklahoma State University head football coach, may have

negotiated a reduced amount of liquidated damages for and in consideration of

a waiver of the obligation to mitigate damages. In his contract, he receives

only 75% of his gross base monthly salary and only 75% of the compensation

due under his Talent and Personal Services Contract.

210

Said sums are to be

payable in full until paid, but there is no obligation on Gundy’s part to seek

comparable employment as an offset to the amount negotiated as liquidated

damages.

211

Not having an obligation to mitigate is worth something, even if the coach

has to take less in the form of liquidated damages as a quid pro quo for having

no obligation to mitigate. It is worth the risk of not having the future

challenge of a failure to meet the obligation.

210. Coaching Contract between Michael R. Gundy and Okla. State Univ. ¶ 8(f) (Jan. 1, 2009)

(on file with author).

211. Id.