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Media & Entertainment Law

: Sports Law Blog

U. of Hawaii Enforces Contract Against Breaching Coach

By Rick Karcher, Michael McCann, Geoffrey Rapp, Greg Skidmore, and Howard Wasserman

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In the first week of January, Hawaii football coach June Jones terminated his 5-year contract that expires on June 30 of this year and accepted a job worth about $2 million per year at Southern Methodist. Hawaii claims it is entitled to damages for his early termination in the amount of $400,008 (which amount represents half of his annual salary). Section 10.4 of the agreement clearly provides, "If Coach terminates this Agreement prior to June 30, 2008,...Coach shall pay to the University as liquidated damages the sum of $400,008."

Jones is now trying to get out of paying Hawaii. According to Jones' agent, Leigh Steinberg, there was an agreement with former athletics director Herman Frazier that "after three years, there would be no penalty if coach Jones were to leave the university. If that were not the case, coach Jones would always honor a contractual obligation." However, this alleged agreement with Frazier directly contradicts Section 10.2, which provides:

Coach therefore agrees, and specifically promises, not to accept employment, under any circumstances, as a men's football coach at any institution of higher education which is a member of the NCAA...requiring performance of duties prior to the expiration date of the term of this Agreement or any extension thereof, without first obtaining a written release of this Agreement or a negotiated settlement thereof in writing accepted by Coach and the University. In the event that the University releases Coach of his obligations under this Agreement, Coach shall be responsible for paying to the University liquidated damages, as set forth in Section 10.4.

Despite Sections 10.2 and 10.4, Steinberg says the matter is in the initial stages of being submitted to an arbitrator. Section 10.3 of the contract provides that disputes shall be decided in a final and binding arbitration by a mutually agreed upon arbitrator.

Jones breached his contract with Hawaii, and the contract is crystal clear that he owes $400,008. His refusal to pay Hawaii is the result of a culture that currently exists within collegiate athletics that schools won't, or shouldn't, enforce a contract against a coach who leaves for a more lucrative situation. Jones should feel fortunate that Hawaii released him from his contract, thus triggering the liquidated damages clause. Hawaii could have elected not to release him and pursue a negative injunction to prevent Jones from signing with SMU, because Jones acknowledged in his contract that the university would be irreparably harmed if he terminated early:

Coach represents to have special, exceptional and unique knowledge, skill and ability as a men's football coach, which, in addition to the future development of coaching experience at University, as well as University's special need for continuity in its men's football program, will render Coach's services unique. Coach recognizes that the loss of Coach's services to University, without University approval and release, prior to the expiration of the term of this Agreement or any renewal thereof, would cause an inherent loss to University which cannot be estimated with certainty, or fairly or adequately.

Full post as published by Sports Law Blog on April 24, 2008 (boomark / email).