Avoiding the Wrong Lane in Employment Law: As a Gamecock fan, I am enjoying the turmoil of our SEC East rivals. I am tempted to say “I told you so.” Lane Kiffin had no record of accomplishment, his employment history had telltale signs of impending trouble, and he began violating NCAA rules from the moment he arrived in Knoxville. From an employment law perspective, there is a teachable moment buried in the Kiffin drama.
The basic lesson is that most employment disputes are preventable, and the Kiffin debacle was certainly avoidable. So, what are the lessons from the Kiffin-Tennessee drama that would have helped Tennessee avoid this mess?
Don’t Ignore Pre-Employment Warning Signs.
Most of the time, there are pre-employment warning signs that an employee/employer is trouble. For employers, some warning signs that an employee may be a bad hire are (a) indicators of dishonesty; (b) bad references, (c) job jumping, and (d) no record of accomplishment commiserate with job being sought. For an employee, warning signs that an employer might be a bad career move are (a) high turnover, (b) multiple lawsuits by former employees, (c) a reputation for terminating long term (20 yr plus) employees, (d) not putting important terms of a job offer in writing, and (e) asking the employee to sign a non-compete (especially if it is broad, long in duration, and/or sprung on the employee late in the interviewing process).
In the case of Kiffin, there were clear signs of trouble before the beginning. The Raiders fired Kiffin after just a little more than a year as head coach. His record as a head coach was 5-15. When he left, the team was in turmoil.
Also, the Raiders warned the Vols. Check out this letter sent to Tennessee’s administration: According to the letter, Kiffin’s “behavior, including violating the NFL Collective Bargaining Agreement, violating the NFL Constitution and team rules, and making intentionally false and misleading statements to the press about the Raiders, all contributed to his termination for cause by the Raiders.” Also, there were “several verbal admonitions” and two written warnings in just the short time Kiffen was the Raiders’ coach. According to the Raiders, Kiffin was insubordinate and induced another coach to breach his contract.
Clearly, there were warning signs. If an employer is presented with this type of reference by a former employer, clearly it should cause concern and trigger an attempt to get to the truth. Of course, one bad reference does not necessarily disqualify an employee from a job. A history of stability combined with strong references from other employers should trump an isolated bad reference. But when the reference concerns the only head coaching position an employee has ever held and his record is one of failure, why would Tennessee take the risk?
Negotiate A Contract that Protects Against The Greatest Risks.
If you decide to take the risk, you must attempt to manage it. First, it helps to make sure you have a well-drafted employment contract. Contracts are legally enforceable agreements. Parties to a contract should map out their objectives and negotiate an agreement that achieves those objectives. If a promise is not in writing, don’t believe it. And parties which deal with each other in good faith should be able to find the “win-win.”
More to the point in the case of Kiffin: A party should anticipate the risks to any relationship, and negotiate contract provisions that protect against these risks. And the basic purpose of an employment agreement for a stated term is to establish an enduring relationship with incentives to perform and disincentives to leave. And because the greatest harm can be an early exit or in this case, one that occurs three weeks before national signing day after a coach’s first year, an effective contract should make such conduct most costly.
Tennessee’s contract failed to protect it against this risk. The agreement was a six year deal that paid an average of $2.3 million per year. However, look at the buy-out provisions:
Year of Termination By Kiffin By UT
2009 $1 million $7.5 million
2010 $800,000 $7.5 million
2011 $600,000 $6.25 million
2012 $400,000 $6.25 million
2013 $200,000 $5 million
2014 N/A $5 million
It should be noted that Kiffin has 36 months to pay his buy-out while Tennessee would have had 48 months.
Also, one of the things that college sports has taught us is the risk is not simply that a coach leaves, but that the coach leaves and takes all his recruits with him. Why not a provision that prohibits initiating contact with any recruit which has made a verbal commitment? Whether you are negotiating a multimillion dollar employment contract or something more modest, you must anticipate your risk and negotiate to protect against it.
Don’t Ignore Bad Behavior: Nip it!
Once the employment relationship has begun, it can always be ended. Most employment relationships are at-will, which means that either party can terminate the relationship “for a good reason, bad reason, or no reason at all, without any notice and at any time.” Employment relationships that involve a contract for a term of years can be terminated for “cause.” Regardless, bad behavior should not be overlooked. If you missed the warning signs before starting an employment relationship, it is wise to take notice in time to prevent your worse case scenario.
When Kiffin was hired, a Memorandum of Understanding was negotiated and a formal contract was to follow. Amazingly, the contract was not finalized until October 2009. By the time it was finalized, he had already committed six (6) violations of NCAA rules. This constitutes a clear pattern of misconduct, which was consistent with the warning provided by the Raiders. Kiffin’s comments seemed to confirm an attitude that rules were meant to be broken. Although it appears that his pattern of conduct would constitute “cause” under his contract, Tennessee ignored it.
And it is one thing when an employee has a history of good performance and a history of honesty. In these cases, the entire body of work can be judged and weighed against any single incident. But, when misconduct, especially a pattern of misconduct or serious misconduct, occurs within the first several months of employment, aggressive, corrective action is a must.
So, did Tennessee get what it deserved? Maybe not. But, it certainly got what it bargained for.