Could Louisville be Liable for Rick Pitino’s Entire Coaching Contract?

Could Louisville be Liable for Rick Pitino’s Entire Coaching Contract?

Jacob M. Bartlett, Staff Editor[1]

In what is probably the most talked about news story of the week, questions still stand on exactly how far the recent FBI bribery probe will go.[2] So far, ten people have been arrested[3] and several others implicated in a two-year bribery and corruption scandal involving college basketball players, coaches, and sports apparel employees.[4] Reports first hit the news on Tuesday morning, the day after the U.S. Attorney’s office for the Southern District of New York filed its report.[5] News spread quickly and lit a fire under many college basketball fans, but especially those here in Kentucky. The documents did not reveal names or institutions, but basketball fans connected the dots; University 6 was Louisville.[6]

Athletic director, Tom Jurich, was put on paid leave.[7] Soon after, head coach Rick Pitino was put on unpaid leave, “which means he [was] in effect fired according to his attorney.”[8] This did not surprise many because it was the third scandal Pitino was involved with in the past ten years.[9] To the average fan this seems like a no-brainer decision, and many may be wondering why he hasn’t officially been fired yet. Unfortunately, nothing in the law is ever that simple. Considering Coach Pitino is under contract for over $2,000,000 a year plus significant bonuses[10], the decision to terminate is never clear. Under the right circumstances, The University could be found to be in breach of their contract and consequently owe Coach Pitino every penny up front as if he continued coaching. As a student taking an employment law class currently studying the topic of “just cause termination,” and avid Kentucky basketball fan, I find it troubling to say that Louisville might want to hold off on any immediate decisions.

The default rule in Kentucky is that employment is “at-will.”[11] Most people correctly understand this to mean that both employer and employee have the right to end the agreement with no consequences or additional monies owed. Sophisticated employment situations, especially where the employee has intrinsic value, tend to contract around this rule to provide for job security and limit the situations that can lead to a termination. This is referred to as “just cause.” Coach Pitino’s contract has a fairly extensive “just cause” provision.[12] Three sections are extremely relevant in the current decision-making process at the University of Louisville.[13]

First, and the easiest reason for Louisville to heed caution, is paragraph 6.1 which requires termination to follow a ten-day notice period for Coach Pitino to offer evidence in his defense.[14] A simple provision, yet an important one. If Louisville decides to officially fire Coach Pitino without following this paragraph, they will be in breach of the contract. Don’t expect any immediate decisions from Louisville at least until after this notice period. Louisville’s counsel surely is aware of this requirement, hence the unpaid administrative leave.

If the notice period is properly followed, Louisville still needs a reason that satisfies the contract’s “just cause” provision to fire Coach Pitino. The first argument for Louisville lies in paragraph 6.1.3 which states: “major violation of any rule, which violation damages Employer or the University in a material fashion.”[15] Without evidence that he was involved or aware of the bribery, Coach Pitino would have a strong case that this provision has not been triggered. Even if Coach Pitino was involved in the scandal, The University must be careful in how it frames Coach Pitino’s termination.[16] In O’Brien v. Ohio State Univ., defendant’s motion to reconsider an earlier ruling that it breached a contract was denied and the coach was awarded $2,253,619.45 .[17] Defendant originally terminated a basketball coach’s contract for giving a loan to a recruit yet failed to properly cite that termination was due to violation of the contractual provision to follow NCAA rules.[18] The court held that defendant could not base it’s just cause argument on a provision it was aware of and ignored to highlight at the time of termination.[19]

Interestingly, paragraph 6.1.3 was recently amended during Coach Pitino’s contract extension. His previous contract included: “Employee shall not be responsible for misconduct of third parties, assistant or other representative unless Employee was aware and failed to report it or Employee failed to exercise diligent, careful supervision.”[20] Prior to his current contract, which was signed in June 2015, The University would have had a much stronger argument to fire Coach Pitino under this section. The University would be able to show “just cause” by claiming that Coach Pitino failed to “exercise diligent, careful supervision” of his assistants.[21] Although there is not an explicit definition of what this provision requires, it would clearly be a strong argument against Coach Pitino. Combining the prior scandal involving assistant coaches hiring escorts for recruits, Coach Pitino would have to fight an extremely uphill battle to convince a judge or jury that he carried out his duties of supervision. In contracts every clause has the potential for major impacts down the road and this revision highlights the necessity of careful reading and negotiating.

Paragraph 6.1.2 includes “Disparaging media publicity of a material nature that damages the good name and reputation, if such publicity is caused by Employee’s willful misconduct.”[22] Again, this provision appears to be satisfied, but only if more evidence about his involvement comes forward. The recent media attention would likely be objectively damaging, but unless Louisville can show that Coach Pitino was actively involved or aware of and hid the scandal, Coach Pitino has not yet provided “just cause” to be terminated. Without evidence of “willful misconduct”[23], Louisville could be gambling by firing Coach Pitino and placing itself into an extensive and expensive legal battle.[24]

As it stands, Coach Pitino remains adamant that he was not involved in the scandal nor did he have any knowledge of it.[25] If evidence is revealed to the contrary then Coach Pitino stands no chance: he clearly violated his contract. Several sources have begun reporting that Coach Pitino is one of the unnamed members in the FBI documents who had active participation, but the source remains anonymous and many remain skeptical.[26] Until further information comes out, which could be months, look for Coach Pitino to pursue potential legal options if fired.[27] Although expensive and potentially marring to what remains of his image and legacy in Kentucky, Coach Pitino may have a strong argument to be awarded his contract salary. With tens of millions of dollars left on the table, wouldn’t you?

[1] J.D. expected May 2019.
[2] Jeff Jacobs, NCAA Mess Is Only Going To Get Worse, Source Hartford Courant, (Sept. 28, 2017, 6:36 AM), http://www.courant.com/sports/uconn-mens-basketball/hc-jacobs-column-college-scandal-0928-20170927-column.html
[3] Lauren Thomas, FBI arrests NCAA basketball coaches and Adidas rep, Source CNBC, (Sept. 26, 2017, 10:06 AM), https://www.cnbc.com/2017/09/26/ncaa-basketball-officials-arrested-on-fraud-and-corruption-charges.html
[4] College Basketball Scandal, Source CBS Sports (Sept. 29, 2017, 6:20 PM), https://www.cbssports.com/college-basketball/news/college-basketball-scandal-updates-news-on-rick-pitino-fbi-investigation/
[5] Lauren Thomas, supra note 2.
[6] See id. (discussing that student enrollment of University 6 matched the University of Louisville).
[7] College Basketball Scandal, supra note 3.
[8] Id.
[9] Id.
[10] Contract between Rick Pitino and Univ. of Louisville, (July 1, 2015) https://media.bizj.us/view/img/8556042/pitino-current-contract.pdf, [https://perma.cc/M238-MTBB], [Hereinafter Current Contract].
[11] Hill v. Ky. Lottery Corp., 327 S.W.3d 412, 419 (Ky. 2010) (defining the “common law doctrine that an employer may discharge his at will employee for good cause, no cause, or for a cause that some might view as morally indefensible”) (internal citations omitted).
[12] Current Contract, supra note 9, at 12
[13] Id.
[14] Id.
[15] Id. (significant portions omitted).
[16] See O’Brien v. Ohio State Univ., 859 N.E. 2d 607 (Ct. Cl. Oh. 2006).
[17] Id. at 613, 614, 620.
[18] Id.  at 613, 614.
[19] Id.
[20] Read a copy of Rick Pitino’s Employee Contract with UofL, Source Lexington Hearld-Leader, http://www.kentucky.com/latest-news/article42472677.ece/BINARY/Read%20a%20copy%20of%20Rick%20Pitino%27s%20employee%20contract%20with%20UofL (significant portions omitted, emphasis added).
[21] Id.
[22] Current Contract, supra note 10.
[23] Id.
[24] But see Haywood v. Univ. of Pittsburgh, 976 F.Supp.2d 606 (W.D. Penn. 2013) (granting University’s motion for summary judgment on former football coaches claim for breach of employment contract following domestic violence incident and claim of breach of good faith by not waiting for investigation to be completed before termination).
[25] Rick Pitino issues statement of ‘a thousand thanks’, Source Wave 3 News (Sept. 29, 2017, 5:13 PM), http://www.wave3.com/story/36487364/rick-pitino-issues-statement-of-a-thousand-thanks
[26] Louisville coach Rick Pitino may have helped get Adidas money to prized recruits, Source CBS News (Sept. 28, 2017, 9:09 AM), https://www.cbsnews.com/news/rick-pitino-louisville-basketball-coach-bribery-scandal-adidas-ncaa/
[27] Darren Rovell & Ryan Smith, Rick Pitino will fight to be paid his full contract, attorney says¸ Source ESPN (Sept. 28, 2017) http://www.espn.com/mens-college-basketball/story/_/id/20842888/rick-pitino-fight-louisville-pay-full-contract-attorney-says

*Featured image by Adam Glanzman, licensed under CC BY 2.0.