THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, July 9, 1995 TAG: 9507090022
SECTION: SPORTS PAGE: C2 EDITION: FINAL
SOURCE: BY STEVE CARLSON, STAFF WRITER
LENGTH: Medium: 78 lines
The buyout clause in coach Jeff Capel's contract apparently provides Old Dominion little or no more protection than it had with Oliver Purnell.
The settlement agreement between Dayton and ODU regarding Purnell spawned a rewritten clause in the extension Capel signed in May. But lawyer Burt Whitt, an expert on labor and employment law, said ODU merely changed the wording of the buyout provision, not the substance.
``If you ask me which side I'd prefer to have in the legal analysis, probably that it's unenforceable,'' said Whitt, chairman of the labor and employment section of the Virginia Bar Association and head of the labor and employment section of the local law firm Kaufman & Canoles.
The clause states in part: ``The party terminating this contract without cause shall be liable to the other party for the payment of damages in an amount equal to your annual salary for each full year, or a pro rata portion thereof, remaining in the contract term.''
Based on that wording, if Capel left today he would be liable for $470,000 - his $94,000 base salary times the five seasons remaining on the contract.
But therein lies the same problem ODU had with Purnell's contract: the specified buyout could be seen in court as a penalty assessed to Capel for leaving rather than a legitimate estimate of the damages ODU would suffer.
Capel's new contract goes on to state the actual damages suffered by the university are difficult to determine, but that a buyout of Capel's base salary for his remaining years ``is reasonable and not out of proportion to its actual losses.''
The contract also says the payment due ODU should Capel leave is not intended as a penalty. But Whitt said that is precisely how the courts likely would view it.
What ODU should have done, Whitt said, was attempt to estimate actual damages should Capel leave, as well as attempt to quantify the financial damage to the program in terms of image, lost ticket sales and other areas.
By writing a reasonable amount of damages into the document, ODU would have a better case for what it is due should Capel leave.
ODU general counsel Patrick Kelly said the damages a university suffers when a coach departs are difficult to quantify.
``It's tough to draw up a liquidated damages provision that the court will view as a liquidated damage and not as a penalty,'' Kelly said.
Kelly said he did not agree with Whitt that an estimate of damages that ODU would suffer should Capel leave would strengthen ODU's position in enforcing the buyout.
``Without precedent, it's difficult to speculate whether you'd be successful,'' Kelly said.
Whitt said Capel's buyout provision has a slightly greater likelihood of being enforceable than Purnell's. Capel seemed unconcerned about the changed wording in his new contract.
``I didn't have a problem with it,'' he said.
Whitt was asked how he would advise Capel regarding the buyout provision if another school wanted to hire Capel. Whitt said he would recommend a settlement similar to Purnell's case.
``He may have the better side, but he has some risks and there are headaches and costs associated with litigation,'' Whitt said.
Whitt said ODU could have enticed Capel to stay for the full term of his contract by other means.
``Instead of creating a potential penalty, what some contracts will do is make payments or bonuses available should he remain employed a certain length of time,'' Whitt said. ``You're only limited by your imagination because there's a lot of things you can do like that.''
But those types of provisions - which do not exist in Capel's contract - obviously would cost money.
Asked if such things were considered in the drafting of Capel's extension, ODU athletic director Jim Jarrett replied: ``What we considered in our minds is not going to be in the newspaper.'' ILLUSTRATION: Photos
Lawyer Burt Whitt, left, says a buyout clause in Jeff Capel's pact
might be viewed as a penalty, not compensation for lost revenues.
by CNB