The Texas Tech/Mike Leach Contract Dispute, a Legal Analysis

Seeing as it is how we at The Rivalry, Esq. pass ourselves off as law-brains, it dawned on us that we might actually -- you know -- do something legal.  As it turns out, a game dominated by speed, size, and power provides few intellectual opportunities for the juris bystander to flex his or her cognitive muscles. 

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But every once in a while, something like this comes along: Texas Tech, perhaps the most dangerous mid-major program in the FBS, and Mike Leach, the resident Buccaneer  that got 'em there, are stalled in contract re-extension negotiations.

Here's the interesting thing: "The school and Leach's representatives have agreed on the financial terms and length of his $12.7 million, five-year contract extension.  The dispute is over several conditions, or minor clauses that assign penalities, ahem, liquidate damages if 1. Leach is fired, or 2. If Leach interviews with another program without prior permission, and 3. Discuss sharing revenues from personal appearences and promotional functions.  None of the new conditions appear in Leach's present contract, which still has two years remaining.

This article will focus on No. 2, or the "hall pass" provision.

The "hall pass" provision requires that the head coach notify Athletic Director Gerald Myers and receive permission before interviewing with another program.  If Leach fails to disclose a meeting, or attends without Myer's blessing, the provision requires that he pay $1.5 million for his malfeasance.

Texas' Tech's Perspective:

Gerald Myers has emphasized that the "permission requirement" merely allows him to keep up to date with what's going on.  As he maintains, an Athletic Director has a significant interest in knowing when his head coach is involved in discussions with a competing program.  

Myers has gone out of his way to downplay the penalizing aspect of the provision, promising that he would never think of withholding permission.

Mike Leach's Perspective:

But there's a problem with that, and Mike Leach sees it.  If the only issue was notice, the provision could be written as follows:

I. Prior to engaging in face-to-face contact, or negotiations, with a third-party the Head Coach is required to notify the Athletic Director in writing, at least 24 hours before said contact or negotiations take place. 

If the Head Coach fails to comply with the requirements of Part 1, he agrees to pay liquidated damages to the University in the amount of $1.5 million.

This modified provision requires only that Coach Leach notify the Athletic Department a reasonable amount of time before meeting with another program.  It does not require that the Athletic Department give him permission to do so.

Under this hypothetical provision, Coach Leach is in the driver's seat.  He is free to entertain contact with another university and avoid the $1.5 million penalty, as long as he complies with the notice requirement.

Under the University's actual terms, Texas Tech (through its agent AD Myers) has the power to limit Leach's ability to meet with third-parties.  All it has to do is deny Leach permission.  If Leach then chooses to go ahead with the meeting, he triggers the $1.5 penalty.

Analysis:

Not surprisingly, Leach doesn't have a problem notifying Texas Tech before he initiates discussions with a third-party.  Last week he submitted a counter-offer to the University, which emphasized this willingness to cooperate, perhaps through language similar to the hyphethical provision featured above.

The University held firm.  As Myers noted, "Leach's agents' proposal is not fair. We will not even respond to such a proposal."

Granted, the University's comments are directly mainly towards a buyout dispute surrounding the figures Leach will pay if he leaves early, or Texas Tech will pay if it fires Leach before the contract's expiration.

Still, this armchair advocate can't help but feel the University is trying to "have its cake and eat it too" by layering penaly provisions on top of one another.

  • If Leach decides to meet with another program, Texas Tech first exercises veto power -- enforced by the power of the purse.
  • If Leach decides to go ahead and meet anyways, he'll forfeit $1.5 million.
  • If Leach then accepts an offer from a third-party, he'll pay liquidated damages for leaving early, anywhere from $300,000 to $1.5 million.

The layering nature of the "hall pass" provision effectively doubles Leach's penality if he chooses to leave Tech in the next year.  Given his track record, it's easy to see why the Coach isn't biting.

The University's Board of Trustee's will tele-conference Friday afternoon to decide the Coach's ultimate fate.

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