AFM RSS Feed Follow Us on Twitter       
AMERICAN FOOTBALL MONTHLY THE #1 RESOURCE FOR FOOTBALL COACHES
ABOUT |  CONTACT |  ADVERTISE |  HELP  



   User Name    Password 
      Password Help





Article Categories


AFM Magazine

AFM Magazine


5 Misunderstood Contractual Issues

© More from this issue

Click for Printer Friendly Version          

Through my experience as an attorney for the NFL Coaches Association and as an agent with Coaches Inc., I have examined a myriad of coaching contracts over the last nine years. Due to the harsh, unpredictable reality of this profession, your contract is your only protection for you and your family when the stars fall out of alignment and you end up fired. Unfortunately, coaches tend to overlook the contracts they sign because they are happy to have a job and do not want to be considered ungrateful by asking for changes. However, even if you don’t negotiate for better terms, you should at least know what you are getting yourself and your family into so you may avoid surprises and plan accordingly.

In this month’s column, I will briefly explore five common contractual issues that are the most frequently misunderstood by coaches. Please keep in mind that this article focuses on the legal rights granted in coaching contracts, even if customary practices may be different. Hopefully, the next few paragraphs will shed some light on your current contract and help you prepare for your next one. You owe it to yourself and your family to pay attention.

5. ‘Get your hot dogs here!’ (Reassignment Clause)

Almost every coaching contract gives the team the right to reassign the coach to another position. Even though the team relies on everyone from the head coach to the parking attendant to execute well on game day, you have studied too hard and sacrificed too much to be a coach and should not agree to be assigned to a different job. Although fortunately not the customary practice, most reassignment clauses give the organization the right to force the coach to perform any other job assigned to him by his supervisor, no matter how unrelated to his job as a coach. That means you could be told to turn in your whistle to man the hot dog cart and, if you refused, you would be in breach of contract.

Would this ever happen? It has. Most often, the team uses this to threaten a coach it wants to fire to take a discounted salary settlement or to discourage a coach by giving him a menial job that would effectively force him to quit. A couple years ago an NFL team attempted to force its recently terminated coaches to accept a 50% settlement of their final year’s salary. The team used its broadly worded reassignment clause to threaten the coaches but ended up not forcing the coaches who called the team’s bluff to do much of anything for that final year. However, if they had forced them to sell hot dogs and had gotten away with it, I’m sure we would see that tactic used again by another team trying to escape its commitment to coaches.

4. The team/organization can change the healthcare coverage and/or healthcare premium payments at any time (Benefits Clause)

Benefits is a word that almost every coach is concerned about when it comes to contracts. Most coaches receive healthcare insurance through their team, providing peace of mind and saving coaches, especially those with children, a considerable amount of money in insurance premiums. However, coaches generally fall under the same employee insurance plan as the other employees in the building, and the team retains the right to make alterations to the health insurance at its own discretion. Not only can your team change your provider and the insurance benefits available at any time, it can also decide to change your required premium payment that can make a significant dent in your checkbook. As healthcare costs continue to rise, teams may make the decision to pass along the increase in cost to you. This is their legal right under the contract, and it could mean a difference in a couple hundred to over a thousand dollars a month to your bottom line. I am aware of this happening at multiple professional and collegiate teams/organizations and I expect this trend will only continue.

3. I can leave for a promotion (Buyout/Liquidated Damages Clause)

Coaches, and people in general, want to have their cake and eat it too when it comes to multi-year contracts. Guys want the perceived security of a multi-year deal but also want the ability to leave for a promotion at any time. However, coaches who terminate their contract early to leave for another job often face a cash penalty for doing so. This penalty is commonly referred to as a buyout and was the issue at hand in the highly publicized dispute between West Virginia and Michigan this past off-season.

Buyouts are common in head coaches contracts, but most assistants don’t realize they are common in their contracts as well. The standard buyout provision dictates a coach who leaves prior to the end of the term of his contract must pay his team what he would have been paid by the team for the remainder of his contract had he remained on the job. For example, if a coach were to be paid $100,000 for the second year of his contract and left for another job prior to that second year, he would owe the team a buyout of $100,000.

Most assistant coaches rely on oral promises from a head coach or team/organization executive that he will be able to leave for a promotion. However, issues arise when the person who made the promise is no longer in power or has come under so much pressure to win that he or she doesn’t follow through on that promise. If you only rely on what someone has told you, be prepared to be disappointed come crunch time, especially when you read the clause in your contract that states every outside agreement not contained in your contract must be in writing and signed by both parties in order for it to be valid.

This buyout clause not only covers a promotion, but contemplates any other job; for example, going from the pros back to college or deciding to get out of coaching all together. The most widespread hurdles caused by this language appears when a position coach has the opportunity to be named a coordinator or a coach, head or assistant, at a lower level of competition and now has the opportunity to move to a higher level. The ability to leave for a better job, either for professional or personal reasons, is critical for a coach’s career because we all know that one day you can be a guru and the next you can be a dunce. My advice is to take advantage of your guru status while you can.

2. I have a two-year deal (Multi-Year Contract)

Although the NFL has historically given its coaches true multi-year contracts, colleges have only recently begun awarding multi-year deals. Coaches find comfort in knowing they will have guaranteed income if they get fired, which can happen at any time. However, most coaches do not enjoy the protection they believe they have secured. With the exception of the NFL, the standard multi-year contract in college is completely one-sided in favor of the school. Generally, the school retains the right to prohibit a coach to leave for another job, or force a buyout, for the entire length of the contract. However, the vast majority of contracts do not require the school to pay the coach for the entire length of the contract should the school fire him, even if fired without cause.

For example purposes, let’s say you are fired for having a losing record after year one of a two-year deal paying you $100,000 in year one and $100,000 in year two. The standard multi-year contract states that if the school fires you prior to the end of year two, the school only has to pay you for another thirty (30) days, in some cases 60 or 90, after it fires you. Suddenly, your $100,000 for year two converts to roughly $8,220 in a great exchange rate for the school, but horrible for you and your family. If you immediately decide to take a job for $50,000, your former school can stop paying you as soon as you earn your first paycheck from your new team and reducing that $100,000 even further. If you are an assistant, your contract likely allows the school to stop paying you if your head coach leaves. This is something you have absolutely no control over, further adding to the fragility of the coveted multi-year contract.

Now let’s picture a different scenario - you have a tremendous year one on the field and have an offer for a promotion that will pay you $200,000 at another school. This is a career-changing move for you and is the job you have dreamed of since you were working as a GA for a dorm room and meal plan. But remember, if you have a buyout or liquidated damages clause, which you probably do, your exchange rate to break the contract is not so favorable. In fact, you will be forced to pay the school $100,000 to get out of the contract unless your school allows you to leave which is not something I would count on.

There are schools that offer true multi-year contracts, meaning they guarantee you will receive your $100,000 in year two even if you are working for $50,000 somewhere else. However, you should be aware of what type of multi-year contract you have so that if you must contend with the worst case scenario, being fired after year one, you are not trying to cover a $100,000 budget on only $8,220.

1. I have a June-to-June contract (Employment at Will)

The most talked about contractual provision among collegiate coaches is a June-to-June contract. Coaches who work under a one-year contract expect that if they get fired, they will at least receive a paycheck until the end of June. This cushion allows you to figure out your next move and gives you the benefit of time to make a decision, rather than having to jump at your first offer. However, if you have language that allows the team to pay the lesser of thirty (30) days, or 60/90 days as mentioned above, or the remainder of your contract, you do not have a true June-to-June contract. Letters of Appointment are likely even worse and merely describe an employee-at-will relationship, meaning that as far as protecting you and your family in the event you get fired, they are not worth the piece of paper they are printed on. The disappointment of being fired is hard to handle but something you need to be prepared to endure. Finding out in December that you will only be paid for one more month, or in some cases even less, when you expected at least six more months, increases the stress on you and your loved ones at the worst time possible.

Now that you’ve read this article I encourage you to take out your contract to see if you can uncover any hidden surprises. It’s probably too late in the year to make any changes to this one, but at least you’ll know what to expect if the ball doesn’t bounce your way this season and you find yourself relying on your contract for protection. Better to know now than later.

Dennis Cordell is the founder of Coaches, Inc. He can be reached at dcordell@coachesinc.com or by visiting the Coaches, Inc. web site, www.coachesinc.com.






NEW BOOK!

AFM Videos Streaming Memberships Now Available Digital Download - 304 Pages of Football Forms for the Winning Coach



















HOME
MAGAZINE
SUBSCRIBE ONLINE COLUMNISTS COACHING VIDEOS


Copyright 2024, AmericanFootballMonthly.com
All Rights Reserved