Monday, July 19, 2010

NY Supreme Court Upholds Marist's "No-Contact-With-Recruits" Contract Clause

As you may recall, Marist University brought a lawsuit against its former men’s basketball head coach, Matt Brady, and James Madison University (JMU). The suit centered on an interesting provision in Brady’s contract with Marist. According to the contract, Brady was required to cease all contact with players being recruited by Marist if Brady were to leave during the terms of his contract. Brady, in the first year of a newly renegotiated 4-year deal, left to coach JMU. Interestingly, despite a provision precluding Brady from even discussing a job with another program during the term of his contract, Marist allowed Brady to leave for JMU, but Marist insisted that JMU and Brady honor the no-contact-with-recruits portion of the contract. In fact, Marist’s Athletic Director wrote a letter to JMU identifying 19 basketball players who had been recruited by Brady while at Marist (“The List”), and were thus off limits to Brady and JMU.

In its complaint, Marist alleged that Brady, with JMU’s full knowledge and encouragement, contacted Marist recruits in order to entice them to join JMU’s basketball team. The complaint also alleged that JMU offered scholarships to four of the Marist basketball recruits who were on The List. One of those recruits had already committed to play for Marist.

JMU moved to dismiss the case on a number of grounds, including lack of subject matter jurisdiction and failure to state a claim. Earlier today, Judge Wood of the New York Supreme Court issued a default judgment against JMU, holding that, among other things, JMU tortuously interfered with the Marist-Brady contract by encouraging Brady to contact his Marist recruits (the ruling does not cover the claims against Brady). Judge Wood spent little time discussing the factual details of the dispute, but in ruling that a NY court had jurisdiction over the case, noted that “an out of state university [had] allegedly raid[ed] a New York college’s prospective recruits, developed and cultivated by a head coach subject to a New York employment contract and funded by that college’s New York resources.” Judge Wood has ordered JMU and Marist to appear in court on July 26th to determine the damages caused by JMU’s interference.

A few quick thoughts on the decision:

1) To my knowledge, this is the first time a school has sued a coach, or another school, or anyone, for violating a “no recruitment” clause in a coaching contract.

2) Not surprisingly, to my knowledge, this is the first time a school has successfully sued another school for violating a “no recruitment” clause in a coaching contract.

3) Judge Wood is holding a hearing on July 26th to determine the damages caused by JMU’s tortuous interference. Typically, in cases where a coach jumps to another school, damages are either too speculative to be awarded (and a negative injunction is awarded) or are covered by a liquidated damages provision or a buyout clause. Here, of course, Marist did not sue because Brady left. Instead, Marist sued because Brady (with JMU’s encouragement) contacted his former Marist recruits after he left. This may be the first time a court determines the damages a school has suffered by having another school contact its recruits. How a court can possibly determine those damages with any degree of certainty is anyone’s guess (though it is worth noting that Marist’s basketball team finished with a 1-29 record this year)…

4) Assuming this decision holds up on appeal (or even if it does not), it will be interesting to see if these “no recruitment” clauses become more common in college coaching contracts, or if other courts find them to be unenforceable. While it may dissuade a coach from jumping ship to a new school, it’s yet another instance where a student-athlete’s rights are limited without his/her consent.

More on this as the story continues to develop…