Tuesday, March 28, 2006

A "Mike Davis" Clause in Coaching Contracts?

Details of new Missouri basketball coach Mike Anderson's contract are here. The former UAB coach has agreed to "'be a loyal employee'" and not (according to CNNSI's summary) "bad mouth" the university. The "loyalty" clause is somewhat superfluous, since all employees are agents of their employers owing fiduciary duties of loyalty. The "bad mouth" clause, however, raises interesting enforceability questions (specifically, what would constitute a violation of the clause). Non-disparagement clauses are regularly part of settlements or severance / termination agreements. But it might work out differently for an employee in service. Sometimes, part of being a coach is bad mouthing. For example, "We played terribly tonight." Would that be grounds to stop paying Coach Anderson? Presumably, the contract also includes an arbitration clause, so ultimately, if push comes to shove, we are unlikely to get a court ruling on the viability of such a clause.

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