Are NCAA Coaches different from the rest of us?

David A. Conners, Ph.D., an senior economist at Brueggeman & Johnson, P.C.  recently posed a very interesting question to a forensic economist list serve.  Brueggeman and Johnson Capital, PC is a CPA firm specializing in business valuation and dispute resolution services in Seattle Washington.

Dr. Conners asked:

What key differences – if any – would you consider in evaluating an alleged wrongful termination lawsuit involving a big-time NCAA coach against his/her former employer?  In other words, in what important ways would this particular wrongful termination suit be different than any other?  

Assume that the coach in question was not fired because of a poor record of “wins and losses.” 
Assume further that the coach in question made relatively “big bucks” before his/her job was terminated.
 
Professor Michael J. O'Hara, J.D., Ph.D., who is an economist and attorney at University of Nebraska at Omaha in the department of Finance, Banking, and Law responded with the following useful advice:

In short, yes, a NCAA coach can be wrongfully terminated; but, the damages are previously estimated and paid for in the liquidated damages clause.  

You will need to press your engaging attorney hard on the law and which losses are recoverable as damages, and limit your estimate to those losses.  Now, if you are talking about a Graduate Assistant Coach with zero bargaining power and zero representation and abused by an adhesion contract, then that liquidated damages clause might be an unenforceable penalty and you are back to vanilla wrongful discharge.

More specifically, he stated:

Most such coaches have contracts with a liquidated damages clause that is quite generous (e.g., between 12 and 60 months pay) and serves the purpose of eliminating claims by either party for termination by either party prior to the contract's stated duration.  The school hires the coach for a stated duration and the coach agrees to work for the school for astated duration; but, both parties hope the coach is so good there is areal risk that the coach will breach, and both parties reasonably fear that the coach will be so bad that the school will breach.  

Between sophisticated parties with sophisticated representation it is nigh on impossible to get beyond the liquidated damages clause merely because the magnitude of loss exceeds the parties' contractually manifested forecast.  Any wrongful termination losses first are paid out of the liquidated damages clause.  Double counting is a real risk. 

To get beyond the liquidated damages clause limits because of the reason for termination that reason must be beyond the expected range of termination justification, or far more likely source of damages, the school's related termination behavior  (e.g., press releases) is beyond the expected range of termination behavior.  The parties ordinarily draft the termination press release when drafting the hiring contract and append that termination press release to the contract as part of the hiring contract.  Both parties expect both parties to walk away quietly. 

If the employer's pre-termination process or post-termination process (e.g.,whispers) did not equate with the reasonably expected "walk away quietly",then the reputational damages could be significant.  Unless the coach was fired because the coach reported NCAA violations at the school, or unless the coach was fired because the coach's behavior was squarely within that jurisdiction's very limited list of "public policyprotected terminations" (e.g., reported a felony public health violation bythe school [e.g.,  known tainted meat donated to the training table knowing used in the dorms]), give it up.