Bill O’Brien Has No Escape Clause in Contract with Penn State

In the wake of the NCAA’s announcement of “unprecedented” sanctions against Penn State University’s football program, many have asked whether new head coach Bill O’Brien’s contract with the university contains an escape clause triggered by NCAA sanctions.  This is an academic discussion, as O’Brien has reaffirmed his commitment to Penn State, but an interesting discussion nonetheless.

Does O’Brien’s contract contain an escape clause?

The quick answer is no – O’Brien’s contract contains no escape clause.  Under the contract, O’Brien can leave Penn State only by satisfying a buyout provision, requiring him to pay the university the amount of his full compensation multiplied by the number of years remaining on his contract.

How might O’Brien escape from the contract?

This situation is very different from that of Miami’s Al Golden, who accepted the head coach position at Miami without knowledge of the brewing scandal involving former booster Nevin Shapiro.  Miami’s administration knew of the potential NCAA sanctions but never informed Golden.  Here, O’Brien was aware of the issues involving Penn State and the potential for NCAA sanctions.  He obviously did not know that Jerry Sandusky would be convicted, that the Freeh report would implicate Joe Paterno in a cover up, or that the NCAA would issue sanctions of a historic nature.  But O’Brien was aware of the various issues facing Penn State football.  Some might say that O’Brien would not have been a candidate for the Penn State job had these issues not arisen.

To escape from his contract, O’Brien would need to allege that Penn State acted in bad faith or misled him with regard to certain facts during the hiring process.  This would be an uphill fight for O’Brien, as Penn State would likely argue that O’Brien knew what he was getting into when he accepted the position.

Can O’Brien reasonably request other concessions?

Yes, O’Brien could seek a contract extension, long enough to allow O’Brien to endure any sanctions against the program and the accompanying adverse effects on recruiting, and which would provide O’Brien the opportunity an opportunity to run the program at full strength.  O’Brien also could seek an adjustment to his bonus structure, which is largely based on post-season achievements for which Penn State is not eligible.

Should every coach negotiate an escape clauses for NCAA sanctions?

Every negotiation and situation is different, but every coach should seriously consider an escape clause triggered by certain levels of NCAA sanctions resulting from violations that occurred before the coach was hired.  Although O’Brien was aware of Penn State’s predicament upon accepting the job, he could reasonably have requested an escape clause triggered if the NCAA levied the “death penalty” against the football program.  In lieu of an escape clause, a coach could seek other provisions to protect himself from sanctions caused by a previous administration.

Comments

  1. Joe Paterno was NOT implicated in a cover up in the report. The AD Curley and President Spanier of the school were. Paterno was simply accused in the report (and nothing more) of not doing enough to follow up. Which I completely agree that based on what we now know, he apparently did do his moral obligation.

    Bill O’Brien has since been named Maxwell and Big 10 coach of the year, so at this article is a mute point.

Trackbacks

  1. [...] addendum addresses a glaring hole in the contract between Penn State and O’Brien – a clause protecting the coach in the event of NCAA sanctions.  Now O’Brien’s contract [...]

  2. [...] Bill O’Brien previously made news on CT Sports Law for his contract with Penn State University, which seemingly was not crafted to account for the circumstances surrounding the university (although it was subsequently amended).  Nevertheless, O’Brien coached the Nittany Lions to an 8-4 record and is receiving mention for coach of the year.  ESPN.com’s Rick Reilly has a nice piece on O’Brien. [...]

  3. [...] Bill O’Brien Has No Escape Clause in Contract with Penn State [...]

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