Integrating Fields in Sport Law: Integrating Fields in Sport Law: Using the Using the O'Brien v Ohio State University O'Brien v Ohio State University Case Case To Teach Principles of Contract Law, To Teach Principles of Contract Law, NCAA Compliance, and International NCAA Compliance, and International Arbitration Arbitration Sport and Recreation Law Association 2008 21 st Annual Conference Myrtle Beach, South Carolina Dr. Anastasios Kaburakis – Southern Illinois University Edwardsville Linda Sharp, J.D. – University of Northern Colorado Dr. Holly Sheilley – University of Louisville Emily Dahlberg, M.S. (08) – Southern Illinois University Edwardsville
Transcript
Integrating Fields in Sport Law: Integrating Fields in Sport Law:
Using the Using the O'Brien v Ohio State UniversityO'Brien v Ohio State University Case To Teach Principles of Contract Law, Case To Teach Principles of Contract Law,
NCAA Compliance, and International NCAA Compliance, and International ArbitrationArbitration
Sport and Recreation Law Association 200821st Annual Conference
Myrtle Beach, South Carolina
Dr. Anastasios Kaburakis – Southern Illinois University Edwardsville
Linda Sharp, J.D. – University of Northern Colorado Dr. Holly Sheilley – University of Louisville
Emily Dahlberg, M.S. (08) – Southern Illinois University Edwardsville
Scope
Contract Law Administrative
Law – NCAA Compliance
International Law – Alternative Dispute Resolution (ADR)
College Coaching College Coaching Contracts: Termination Contracts: Termination
ClausesClauses
Termination ClausesTermination Clauses
Termination without CauseTermination without Cause Breach of contract by party terminating Breach of contract by party terminating
contractcontract No legitimate justification for doing soNo legitimate justification for doing so Liquidated damages or “buy-out” may Liquidated damages or “buy-out” may
be specified in contractbe specified in contract Recent dispute between WVU & Rich Recent dispute between WVU & Rich
RodriguezRodriguez
Termination ClausesTermination Clauses
Termination for Just CauseTermination for Just Cause Employee has breached contract by Employee has breached contract by
engaging in conduct that violates engaging in conduct that violates standards of job performance set by standards of job performance set by employeremployer Fails to meet requirements of jobFails to meet requirements of job Criminal behavior (morals clauses)Criminal behavior (morals clauses) Conduct unfavorable to employerConduct unfavorable to employer Violations of NCAA, conference or university Violations of NCAA, conference or university
rulesrules
Termination for Just CauseTermination for Just Cause
Negotiation of these clauses is critical Negotiation of these clauses is critical Employer wants to broaden provisions Employer wants to broaden provisions
while employee wants to narrow while employee wants to narrow O’Brien v. Ohio State University O’Brien v. Ohio State University
exemplifies this type of disputeexemplifies this type of dispute
Sharp, Claussen & Moorman Sharp, Claussen & Moorman Sport Law: Sport Law: A Managerial Approach, A Managerial Approach, pp. 179-182pp. 179-182
O’Brien v. Ohio State UniversityO’Brien v. Ohio State University
FactsFacts O’Brien hired as BK coach at OSU in O’Brien hired as BK coach at OSU in
19971997 In May, 1998 Alex Radojevic, BK player In May, 1998 Alex Radojevic, BK player
from Serbia came for unofficial visitfrom Serbia came for unofficial visit Fall, 1998 O’Brien learned Radojevic had Fall, 1998 O’Brien learned Radojevic had
played pro BK in Europeplayed pro BK in Europe O’Brien continued to recruit Radojevic O’Brien continued to recruit Radojevic
and in Nov 1998 Radojevic signed NLIand in Nov 1998 Radojevic signed NLI
O’Brien O’Brien (cont)(cont)
In December 1998 O’Brien gave the In December 1998 O’Brien gave the Radojevic family $6000Radojevic family $6000
O’Brien said that this “loan” did not O’Brien said that this “loan” did not violate NCAA rules since Radojevic not violate NCAA rules since Radojevic not eligible to be college playereligible to be college player
In Feb 1999 O’Brien told OSU AD that In Feb 1999 O’Brien told OSU AD that Radojevic could regain amateur statusRadojevic could regain amateur status
Radojevic never enrolled at OSURadojevic never enrolled at OSU
O’Brien O’Brien (cont)(cont)
March 1999 OSU gets to Final FourMarch 1999 OSU gets to Final Four O’Brien gets new employment K O’Brien gets new employment K
effective September 1999effective September 1999 In Sept 1999 O’Brien signs NCAA In Sept 1999 O’Brien signs NCAA
Certificate of Compliance that he has Certificate of Compliance that he has reported any knowledge of NCAA reported any knowledge of NCAA violations for 1998-99 academic yearviolations for 1998-99 academic year
O’BrienO’Brien (cont) (cont) O’Brien does not disclose “loan” to AD until April O’Brien does not disclose “loan” to AD until April
20042004 O’Brien terminated for cause in June 2004O’Brien terminated for cause in June 2004 OSU alleged that plaintiff violated Section 4.1(d) OSU alleged that plaintiff violated Section 4.1(d)
that required him to “know, recognize, and that required him to “know, recognize, and comply” with all rules of NCAA and to “immediately comply” with all rules of NCAA and to “immediately report to AD” if he had “reasonable cause to report to AD” if he had “reasonable cause to believe that any person had violated such laws, believe that any person had violated such laws, policies or regulations”policies or regulations”
OSU argued that failure to report loan to Radojevic OSU argued that failure to report loan to Radojevic violated this section and was a material breach of violated this section and was a material breach of contract and university could terminate under contract and university could terminate under Section 5.1(a)Section 5.1(a)
Section 5.1(a) stated that OSU can terminate a Section 5.1(a) stated that OSU can terminate a contract if a material breach occurredcontract if a material breach occurred
The Relevant SectionThe Relevant Section Section 5.1:Section 5.1: Termination for Cause - Ohio State may terminate this agreement Termination for Cause - Ohio State may terminate this agreement
at any time for cause, which, for the purposes of this agreement, at any time for cause, which, for the purposes of this agreement, shall be limited to the occurrence of one or more of the following:shall be limited to the occurrence of one or more of the following:
(a) a material breach of this agreement by Coach, which Coach (a) a material breach of this agreement by Coach, which Coach fails to remedy to OSU's reasonable satisfaction, within a fails to remedy to OSU's reasonable satisfaction, within a reasonable time period, not to exceed thirty (30) days, after reasonable time period, not to exceed thirty (30) days, after receipt of a written notice from Ohio State specifying the act(s), receipt of a written notice from Ohio State specifying the act(s), conduct or omission(s) constituting such breach;conduct or omission(s) constituting such breach;
(b) a violation by Coach * * * of applicable law, policy, rule or (b) a violation by Coach * * * of applicable law, policy, rule or regulation of the NCAA or the Big Ten Conference which leads to a regulation of the NCAA or the Big Ten Conference which leads to a "major" infraction investigation by the NCAA or the Big Ten "major" infraction investigation by the NCAA or the Big Ten Conference and which results in a finding by the NCAA or the Big Conference and which results in a finding by the NCAA or the Big Ten Conference of lack of institutional control over the men's Ten Conference of lack of institutional control over the men's basketball program or which results in Ohio State being basketball program or which results in Ohio State being sanctioned by the NCAA or the Big Ten Conference * * * ;sanctioned by the NCAA or the Big Ten Conference * * * ;
(c) any criminal conduct by Coach that constitutes moral turpitude (c) any criminal conduct by Coach that constitutes moral turpitude or other improper conduct that, in Ohio State’s reasonable or other improper conduct that, in Ohio State’s reasonable judgment, reflects adversely on Ohio State or its athletic judgment, reflects adversely on Ohio State or its athletic programs.programs.
Ohio Court of Claims DecisionOhio Court of Claims Decision2006 Ohio 1104 (Feb. 15, 2006)2006 Ohio 1104 (Feb. 15, 2006)
Judgment for O’Brien-OSU breached contractJudgment for O’Brien-OSU breached contract Judge found “fact” that O’Brien made loan Judge found “fact” that O’Brien made loan
for humanitarian reasons not for recruiting for humanitarian reasons not for recruiting advantageadvantage
Radojevic ineligible to play NCAA BK at time Radojevic ineligible to play NCAA BK at time of loan (note that O’Brien still recruited of loan (note that O’Brien still recruited Radojevic despite his play in pro BK)Radojevic despite his play in pro BK)
O’Brien did violate O’Brien did violate § 4.1 (d) but this was not § 4.1 (d) but this was not a “material breach” under §5.1 (a)a “material breach” under §5.1 (a)
Was O’Brien’s breach “material”?Was O’Brien’s breach “material”?
Material breach defined as “a failure Material breach defined as “a failure to do something that is so to do something that is so fundamental to a contract that the fundamental to a contract that the failure to perform that obligation failure to perform that obligation defeats the essential purpose of the defeats the essential purpose of the contract or makes it impossible for contract or makes it impossible for the other party to perform under the the other party to perform under the contract”contract” Williston on Contracts, Chapter Williston on Contracts, Chapter § 63:3§ 63:3
The Restatement criteria for The Restatement criteria for material breachmaterial breach
Restatement of the Law 2d, Contracts, Restatement of the Law 2d, Contracts, § 241§ 241. The . The Restatement test is prevailing law, and it was used by the Restatement test is prevailing law, and it was used by the Ohio Court of Claims in deciding this case:Ohio Court of Claims in deciding this case:
(a) the extent to which the injured party will be deprived of (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be compensated for the part of that benefit of which he will be deprived;deprived;
(c) the extent to which the party failing to perform * * * will (c) the extent to which the party failing to perform * * * will suffer forfeiture;suffer forfeiture;
(d) the likelihood that the party failing to perform * * * will (d) the likelihood that the party failing to perform * * * will cure his failure, taking account of all the circumstances cure his failure, taking account of all the circumstances including any reasonable assurances;including any reasonable assurances;
(e) the extent to which the behavior of the party failing to (e) the extent to which the behavior of the party failing to perform * * * comports with standards of good faith and fair perform * * * comports with standards of good faith and fair dealing.dealing.
Rationale for finding no “material Rationale for finding no “material breach”breach”
The extent to which OSU was deprived of The extent to which OSU was deprived of the benefit it expected from employment the benefit it expected from employment K was not as significant as OSU arguedK was not as significant as OSU argued NCAA sanctions minorNCAA sanctions minor Damage to OSU reputation minorDamage to OSU reputation minor
Breach of trust was reparableBreach of trust was reparable O’Brien’s forfeiture of salary & benefits O’Brien’s forfeiture of salary & benefits
substantialsubstantial O’Brien made good faith effort to resolve O’Brien made good faith effort to resolve
dispute and OSU did notdispute and OSU did not
Rationale (cont)Rationale (cont)
NCAA compliance is important to NCAA compliance is important to OSUOSU
BUT wording of BUT wording of § 5.1(b) contemplates § 5.1(b) contemplates that coach could retain employment that coach could retain employment during investigation and remain during investigation and remain employed unless serious sanctions employed unless serious sanctions imposedimposed
Damages AwardDamages Award
Court of Claims awarded just over Court of Claims awarded just over $2.25 million on August 2, 2006$2.25 million on August 2, 2006
Amount determined by reference to Amount determined by reference to liquidated damages provisions in liquidated damages provisions in contract (Sections 5.2 & 5.3)contract (Sections 5.2 & 5.3)
Ohio Court of Appeals DecisionOhio Court of Appeals Decision2007 Ohio App. LEXIS 43162007 Ohio App. LEXIS 4316
Affirmed decision of trial courtAffirmed decision of trial court Under broader contract terms not Under broader contract terms not
favoring the employee to such a favoring the employee to such a degree result would not be the samedegree result would not be the same
Contract must honor parties’ Contract must honor parties’ agreement absent unconscionabilityagreement absent unconscionability
Questions and Discussion PointsQuestions and Discussion Points
1. The judge in this case interpreted the facts in 1. The judge in this case interpreted the facts in favor of O’Brien when he characterized the loan as favor of O’Brien when he characterized the loan as for humanitarian reasons and not to gain an for humanitarian reasons and not to gain an improper recruiting advantage. What facts might improper recruiting advantage. What facts might support a more sinister interpretation of the support a more sinister interpretation of the coach’s conduct? coach’s conduct?
Discussion Point: Discussion Point: O’Brien’s “story” was O’Brien’s “story” was inconsistent. If he really felt that Radojevic was inconsistent. If he really felt that Radojevic was ineligible to play college basketball, why did he ineligible to play college basketball, why did he have Radojevic sign a NLI and come for an official have Radojevic sign a NLI and come for an official visit? Then O’Brien changed his story again and told visit? Then O’Brien changed his story again and told Geiger that he thought Radojevic’s eligibility could Geiger that he thought Radojevic’s eligibility could be restored.be restored.
Questions and Discussion PointsQuestions and Discussion Points
2. 2. Discuss how Ohio State could have strengthened its grounds for Discuss how Ohio State could have strengthened its grounds for termination for cause. termination for cause.
Discussion Points:Discussion Points: When Ohio State negotiated the employment agreement with When Ohio State negotiated the employment agreement with
O’Brien it could have drafted language that provided that any O’Brien it could have drafted language that provided that any failure to immediately report any violation of NCAA or Big Ten failure to immediately report any violation of NCAA or Big Ten rules is a material breach of the contract. In that way, it would not rules is a material breach of the contract. In that way, it would not be up to a fact finder to decide, as here, that a single failure to be up to a fact finder to decide, as here, that a single failure to report was not a material breach. report was not a material breach.
OSU negotiated a termination clause very favorable to O’Brien and OSU negotiated a termination clause very favorable to O’Brien and it paid the price here. A review of successor Thad Matta’s contract it paid the price here. A review of successor Thad Matta’s contract shows the degree to which a lengthy list of behaviors could all be shows the degree to which a lengthy list of behaviors could all be grounds for terminationgrounds for termination
Ohio State could also have waited to see if the Radojevic incident Ohio State could also have waited to see if the Radojevic incident would be investigated by the NCAA as a major infraction. But in would be investigated by the NCAA as a major infraction. But in this case the NCAA did not investigate for another 11 months after this case the NCAA did not investigate for another 11 months after O’Brien was terminated, so relying on this clause would have O’Brien was terminated, so relying on this clause would have meant that Ohio State would not have been able to terminate meant that Ohio State would not have been able to terminate O’Brien at the earlier date, when there was a need to do so based O’Brien at the earlier date, when there was a need to do so based on public concern about the program.on public concern about the program.
Questions and Discussion PointsQuestions and Discussion Points
3. 3. Discuss the implications of this decision Discuss the implications of this decision relative to other colleges that may wish to relative to other colleges that may wish to terminate coaches “for cause.”terminate coaches “for cause.”
Discussion Point: Discussion Point: This ruling may deter schools This ruling may deter schools from trying to use the “for cause” provisions in from trying to use the “for cause” provisions in coaches’ contracts. Often schools have chosen to coaches’ contracts. Often schools have chosen to take the easy way out in these types of situations take the easy way out in these types of situations by terminating the contract without cause and by terminating the contract without cause and paying a buy-out to a coach instead of risking paying a buy-out to a coach instead of risking litigation by the coach who has been terminated litigation by the coach who has been terminated for cause. The interpretation of the facts here in for cause. The interpretation of the facts here in favor of the coach is a deterrent to colleges that favor of the coach is a deterrent to colleges that might be considering using the “for cause” might be considering using the “for cause” provisions instead of buying out a coach who has provisions instead of buying out a coach who has acted in a less than honorable fashion.acted in a less than honorable fashion.
O’Brien Contract v. Thad Matta O’Brien Contract v. Thad Matta ContractContract
Negotiation of the termination clauses is a Negotiation of the termination clauses is a critical undertakingcritical undertaking
O’Brien negotiated several limitations on O’Brien negotiated several limitations on termination for causetermination for cause
Matta’s contract has 15 specific grounds Matta’s contract has 15 specific grounds for terminationfor termination Includes “commission of a crime whether Includes “commission of a crime whether
prosecuted or not…”prosecuted or not…” ““Failure to manage Team in a manner that Failure to manage Team in a manner that
reflects the academic values of Ohio State…”reflects the academic values of Ohio State…”
Thad Matta’s contract (cont)Thad Matta’s contract (cont) ““Commission of…any act…which in OSU’s Commission of…any act…which in OSU’s
reasonable judgment brings Coach into public reasonable judgment brings Coach into public disrepute, contempt, scandal or ridicule…”disrepute, contempt, scandal or ridicule…”
““Significant or repetitive or intentional Significant or repetitive or intentional violation (or if OSU has a reasonable basis for violation (or if OSU has a reasonable basis for believing that a significant or repetitive or believing that a significant or repetitive or intentional violation has occurred) by Coach intentional violation has occurred) by Coach (or any other person under Coach’s (or any other person under Coach’s supervision and direction, including student-supervision and direction, including student-athletes) or any law, rule, regulation, athletes) or any law, rule, regulation, constitutional provision, bylaw or constitutional provision, bylaw or interpretation of Ohio State, the Big Ten interpretation of Ohio State, the Big Ten Conference or the NCAA”Conference or the NCAA”
““A material breach of this agreement A material breach of this agreement by Coach after receipt of a written by Coach after receipt of a written notice from Ohio State specifying the notice from Ohio State specifying the act(s), conduct, or omission(s) act(s), conduct, or omission(s) constituting such breach which constituting such breach which breach cannot be or has not been breach cannot be or has not been cured within thirty (30) days after the cured within thirty (30) days after the date that a written notice by Ohio date that a written notice by Ohio State identifying such breach is sent” State identifying such breach is sent”
Learning ObjectivesLearning Objectives
Appreciate complexity of termination Appreciate complexity of termination for cause clausesfor cause clauses
Appreciate importance of negotiating Appreciate importance of negotiating these clausesthese clauses
Understand various interpretations of Understand various interpretations of material breachmaterial breach
Understand importance of adopting Understand importance of adopting “worse case scenario” when drafting “worse case scenario” when drafting contractscontracts
ResourcesResources
Sharp, Moorman & Claussen Sharp, Moorman & Claussen Sport Law: A Sport Law: A Managerial ApproachManagerial Approach
O’Brien v. Ohio State Univ.O’Brien v. Ohio State Univ., 2006 Ohio , 2006 Ohio 1104 (Ct. Claims Feb. 15, 2006)1104 (Ct. Claims Feb. 15, 2006)
O’Brien v. Ohio State Univ.,O’Brien v. Ohio State Univ., 2007 Ohio 2007 Ohio App. LEXIS 4316 (Ct. App. Sept. 20, 2007)App. LEXIS 4316 (Ct. App. Sept. 20, 2007)
Greenberg, M.J.(2006). Termination of Greenberg, M.J.(2006). Termination of college coaching contracts…17 college coaching contracts…17 Marquette Marquette Sports Law Rev. Sports Law Rev. 197.197.
NCAA Governance
Spectrum of Impact Approach on Outcome of Cases.(The Analysis for EVERY case has changed; the spectrum considers outcome.)
Ethical Conduct, Amateurism, Extra Benefits(Student-athlete acting independent of institution)
General Eligibility, Financial Aid(Institution primarily responsible for violation)
Professional Salary, Professional
Contract, Professional Competition
Contract w/ agent
Entrance Exam (i.e., ACT, SAT)
Fraud
Academic Fraud (e.g., having
academic tutor write paper)
Providing false information
Benefits from sports
agent
Benefits from booster
Prize Money
Five-Year Clock Extensions
Financial Aid
Competing for institution while ineligible
(transfers, progress toward degree, initial
eligibility) –
Spectrum of Cases
Where does Radojevic and Sedo fit on the spectrum?
NCAA Compliance Lessons
• Amateurism Clearinghouse• Reinstatement– Could Radojevic be reinstated after
playing on a professional team?• Extra Benefit – Coach O’Brien gave $6,000 to "Semi"
Patrovic, family friend of Radojevic, so Radojevic could go home after father died… Does this constitute an extra benefit?
• “Semi” Patrovic was an agent. Had Radojevic made prior verbal or written agreements with him?
• Institutional Control – Did O’Brien have a duty to report this earlier?
Student Athlete Reinstatement
• Student-athlete reinstatement is a department within the NCAA's membership services program. The student-athlete reinstatement staff processes violations and waivers that directly affect the eligibility of a prospective student-athlete or an enrolled student-athlete.
• When an NCAA member school self-reports a violation, all eligibility issues are addressed first and as quickly as possible. Then, if the violation has institutional responsibility, it is forwarded to the NCAA's enforcement staff to be processed as a secondary or major infraction case.
Principles of SAR
• Student-athlete’s (SA) responsibility for the violation.
• Institution’s responsibility for the violation.
• Impact of condition on SA.
• Could violation reasonably been avoided?
• Other mitigation presented by the institution.
General SAR Philosophy
• Put SA back in the position prior to violation.
• Assess SA’s responsibility for violation.
• Evaluated totality of circumstances to reach appropriate decision.
The Process
Old Student-Athlete Reinstatement Process
Initial Recruitment-evaluation,
questionnaire, scholarship offer
Initial Recruitment-evaluation,
questionnaire, scholarship offer
Institution reviews eligibility- bylaws
14.1.2 &14.11.1, ISA questionnaire,
amateur status info, AGA staff input
Institution reviews eligibility- bylaws
14.1.2 &14.11.1, ISA questionnaire,
amateur status info, AGA staff input
EligibleEligible
IneligibleIneligible
SAR staff appeal and info collection, AGA
staff contribution
SAR staff appeal and info collection, AGA
staff contribution
SAR staff reviewSAR staff review
IneligibleIneligibleEligibleEligible
Conditions (repayment, withheld
from contests)
Conditions (repayment, withheld
from contests)SAR Committee AppealSAR Committee Appeal
New Student-Athlete Reinstatement Process
Initial Recruitment
Initial Recruitment
Division IIIDivision III
Division I & II
Division I & II
Certification by institution
Certification by institution
Register with NCAA eligibility center – online questionnaire & student release form
Register with NCAA eligibility center – online questionnaire & student release form
• The NCAA student-athlete reinstatement staff issues initial decisions in all cases.
• Staff decisions may be appealed to the Student-Athlete Reinstatement Committee. The reinstatement committee has the authority to amend a decision or lessen a penalty imposed by the staff, but it does not have the authority to increase the penalty.
Amateurism Rules Certified by the Amateurism Certification Process
• Contract with a professional team. • Salary for participating in athletics.• Prize money. • Play with professionals. • Tryout, practice or competition with a professional team. • Draft.• Benefits from an agent or prospective agent.• Agreement to be represented by an agent. • Tennis and swimming and diving rule. (Division I only).• Matriculation after 20th birthday-tennis. (Division I only).• Participation after 21st birthday. (Division I only).• Organized competition rule. (Division II only).
Amateurism Certification Process
• Creation of prescribed penalties to be imposed.
• Cases not on prescribed list or where mitigation is present will be forwarded to reinstatement staff.
• Reinstatement staff will provide condition as part of certification process.
• Decision can be appealed by an institution to the student-athlete reinstatement committee.
Amateurism Guidelines
• Sign an agreement or contract that states the team is professional or the individual is a professional.
• Sign an agreement or contract that provides the individual with money above expenses (even if the money is never provided).
• Individual receives money above his or her expenses.
Amateurism Guidelines
• Individual has profited from his or her sport.
• Individual consistently represents himself or herself as a professional athlete.
• Individual enters into a written or verbal agreement with an agent.
• Individual accepts significant monetary benefits from an agent.
Clear Decision
• Amateurism Clearinghouse Guidelines
• Division I Student Athlete Reinstatement Guidelines
• Klaus graduated from high school in 2004 and served a mandatory 10 months in the German Armed Services. While serving in the German Armed Services, Klaus competed on a second division tennis Bundesliga club team. Klaus participated in 3 dates of competition.
• Klaus did not sign a contract or receive any money above expenses from the team; however, the first position player on his team did receive money above actual and necessary expenses from the team.
• Klaus did not accept any prize money for his participation on the tournaments and only accepted actual and necessary expenses from the team.
• Klaus plans to enroll at an NCAA Division I institution in the Fall of 2005.
Case Example #1:
Case Example #2:• Steve graduated from high school in
June 2004. While in high school, Steve competed in 8 contests for the Hamilton Thunder, a team that competes in the Canadian Professional Soccer League (CPSL).
• The Hamilton Thunder team declares itself to be a professional team.
• Steve received $450 in actual/necessary expenses from the team.
• Steve did not sign a contract with the team, nor did he have an agreement with an agent.
• Steve plans to enroll at an NCAA Division I institution in the Fall 2005.
Case Example #3:• Brad, a men’s ice hockey student- athlete,
graduated high school in May 2001. • Brad competed for and received expenses
from an amateur ice hockey team for the 2000-01 and 2001-02 seasons.
• During the 2001-02 season, Brad was called up and competed in 5 contests for a Major Junior A team.
• Brad accepted $125 for actual/necessary expenses from the Major Junior A team.
• Brad plans to enroll at an NCAA Division I institution in the Fall of 2005.
Case Example #4• Robin, a track and field student-athlete,
accepted $5,000 in prize money following her participation in competition that was held in her hometown over the summer.
• Robin had less than $100 in actual and necessary expenses for the competition.
• During the remainder of the summer Robin traveled internationally, participating in various track and field competitions and paying all of her expenses.
• Although Robin did not win any other events or accept any prize money, her actual and necessary expenses for all of the other competitions totaled $6,000.
Case Example #5:
• Betsy, a golf student-athlete, competed in an event that occurred outside the institution’s playing and practice season, but during the academic year.
• Based on her place finish in the event, Betsy accepted a $500 gift certificate for the local pro shop.
• Gift certificates are permissible under USGA rules and are permitted under NCAA rules during the summer.
• Betsy paid all of her own expenses, including a $175 event entry fee.
National Club
NFs - NGBsNational teams
CFsContinental (e.g. European) Championships
ISFsWorld Championships & Olympics
Regional Assoc.
Senior Clubs
Jr. Clubs, Rec, & School
Regional select teams
Jr. Clubs, Rec, & School
Senior Clubs
Regional Assoc.
NFs & NGBs
CFs
ISFs
Junior Clubs (U12, U14, U16, U18) High School and College competitions
Top (pro) competition (Super Leagues, A1, A2)Lower levels (amateur or pro-am; Divisions II, III, IV, V, etc.) + Promotion and relegation
Professional Clubs Associations (EPL, ESAKE)
Professional Leagues Associations (ULEB, G14)
FIFA/UEFA, FIBA/FIBA EuropeFIFA/UEFA, FIBA/FIBA Europe
Champions League, Euroleague
Promotion to
First team
International ADR
In re: Toronto Raptors v. Buducnost
The Radojevic saga continues
Setting the stage
• Radojevic drafted 12th in the 1999 NBA draft by the Toronto Raptors
• Entered into contract with Buducnost in 1996
• NBA-FIBA agreement in 1997 stipulating:• Valid contracts will be honored by both sides• Final and binding arbitration upon disputes
• If Radojevic was deemed still bound by Buducnost contract, NBA would have to wait
NBA-FIBA agreement
• “Player Contract = written agreement for a specified term and for a specified salary or other compensation.”
• Licensing system, Letters of Clearance, mutual requests re: contract status
• “Any disputes… shall be resolved finally and conclusively by an International Arbitrator”
• Best efforts deterring interference w/ contract
The arbitration
• London, England, 8/19/1999• International arbitrator: Iain Patrick Travers• Toronto Raptors v. Buducnost• Yugoslav Basketball Federation denied issuance
of letter of clearance• Side note: NATO bombings 3/24-6/10/1999
• Was Radojevic subject to a valid contract?• Was the contract effectively terminated?
ex aequo et bono
Contract clauses
• For the following three years (1998-1999, 1999-2000, and 2000-2001), the Player’s compensation shall be agreed upon after the first two seasons have elapsed
• The Player has the right to cancel this contract by unilateral statement of will, to the Club’s detriment, if the Club defaults on payment of any monetary sum due to the Player for a period longer than 90 days, or if the Club does not provide him with the conditions for training or necessary medical aid.
The contractual matter
• Claim: Not a valid binding contract, missing material salary stipulation for the last three years
• Response: Defer to Yugoslav Federation policy• Min. & Max. salary fixed • Teams invest in talent development, not salaries• Lodging, meals, medical aid, and necessary support =
Other compensation • Arbitrator disagreed
• Specific terms for first two years• No stipulation of resolution upon remaining salary dispute• Salary is distinct from non-monetary obligations• Governing law (any) did not provide for treatment of material omission
• “An amount to be agreed on an unspecified date” lacks certainty
NO CONTRACT = FREE RADOJEVIC
The medical issue
• Secondary – Had it been the most significant, arbitrator would allow time for further evidence
• Knee injury while training in Greece (September 1996)• Greek doctor misdiagnosed injury • Surgery in Podgorica October 1996• Respondents pts:
• Health care standard way below US ($ discussion)
• Went above and beyond
Good job Hippokrates!
Compensation
• Secondary breaches• Fascinating clauses:
• ≥ 20MPG = DEM 15,000 (11 monthly installments)• 7-19MPG = DEM 9,000 (11 monthly installments)• If injured, receives DEM 15,000/11mos rate!
• Claim: Did not receive last installment and DEM 6,000 at the conclusion of the season
• Response: HE LEFT! • Arb. decision: Indeed, he could have waited 90 days;
thereafter he would be able to terminate the contract
What if this occurred today?
• New FIBA ADR–FIBA Arbitral Tribunal (FAT)• New contracts + FAT arbitration clause• Court of Arbitration for Sport (CAS)
• Appeals (+waiver of Swiss Federal Tribunal appeal)
• Could CAS contribute to NBA-FIBA disputes?
• Now dispute would be first dealt via FAT• FAT v NBA-FIBA arbitration agreement conflict
• NBA-FIBA agreement needs amendment (defer to FAT)
• What if… ULEB decides to break away… again?
Useful teaching points
• Radojevic was honest “to the extent that, on occasion, he gave answers which might not have been entirely helpful to his cause”
• “…an individual must comply with a contract that he enters into”
• Under the scope of Arts. 81, 82, et seq. EC Treaty, and Sherman Antitrust Act § 1, critique minimum and maximum salary limits
• “…other compensation” & Salary determination upon injury –Omit & Be precise
• Contractual obligations determined by prevailing circumstances• Termination – Specify timing and include buyout clause• Governing law – Which is it?
