Tuesday, June 21, 2011

Kent State University Sues Its Former Men's Basketball Coach

Last month, various media outlets reported that Kent State University had filed a lawsuit in Ohio state court against both its former head men's basketball coach Geno Ford and Bradley University, after Ford left Kent State in March to take the same position at Bradley. The suit alleges that Ford breached his contract with Kent State by accepting the Bradley position without the university's consent, and seeks $1.2 million from Ford pursuant to the liquidated damages clause in his contract (i.e., his prior salary of $300,000/year for each of the four years remaining on his contract). In addition, Kent State asserted a $25,000 tortious interference with contract claim against Bradley, alleging that the school wrongfully induced Ford to breach his contract with Kent State.

Earlier this month, Coach Ford and Bradley each filed responses to Kent State's complaint. Ford denied the allegations and asserted 14 affirmative defenses, perhaps most notably arguing that the liquidated damages provision in his contract was unconscionable. Meanwhile, Bradley asserted that Kent State unconditionally consented to its interviewing Ford for the coaching position, thereby waiving any right to a contractual interference claim.

Lawsuits by jilted universities seeking to enforce liquidated damages provisions against former coaches are not uncommon, and typically settle out of court. For instance, one of the most notable recent examples was the $4 million settlement West Virginia University reached with its former head football coach Rich Rodriguez in 2008.

However, if the parties cannot reach a settlement in this case, Kent State has a favorable judicial precedent it can rely on in support of its claim against Ford. Specifically, in Vanderbilt University v. DiNardo, the Sixth Circuit Court of Appeals ruled that the liquidated damages clause in former Vanderbilt head football coach Gerry DiNardo's contract was enforceable, after DiNardo left Vanderbilt to become the head coach at Louisiana State University. Like Ford, DiNardo had argued that the provision was unconscionable, insofar as it required him to pay Vanderbilt his net salary for each remaining year under the contract. The Sixth Circuit rejected DiNardo's argument, holding that the provision was not an unlawful penalty given the difficulty in measuring Vanderbilt's actual damages from DiNardo's breach.

In light of the DiNardo precedent, Kent State's attempt to enforce the liquidated damages in Ford's contract does not appear to be unreasonable. Accordingly, I suspect that Coach Ford will eventually agree to settle the case out of court.