Monday, April 8, 2013

Termination Rutgers Style

Rutgers President Barchi was quite adamant that Mike Rice, the men's basketball coach, was not fired for cause.  He stated, "The outside counsel says that could not be done...I fired him.  Not for cause.  I just fired him."  Not terminating the coach for cause cost the university a little over a million dollars.  In light of the report of the investigation of the Rice matter, a fair question is why wasn't Rice fired for cause?

As part of the investigation of the alleged abuse and other misconduct attributed to Rice, the university retained outside counsel to investigate.  A comprehensive report was submitted, and on pages 34 and 35 of that report, the conduct of Rice was found to have "crossed the line" of permissible conduct and to have constituted harassment and intimidation in violation of university policy.  In addition, the report stated that the athletic director could reasonably determine that the coach's actions tended to embarrass and to bring shame or disgrace to the university in violation of the employment contract.  The outside counsel was not retained to give a recommended penalty; he did however find a breach of university policy and of the employment contract.

"Cause" in Rice's employment contract is identified as:  Material breach of this contract(won-loss record shall not constitute a material breach), neglect of duty, willful misconduct, act(s) of moral turpitude, conduct tending to bring shame or disgrace to the University as determined in good faith by the Director of Intercollegiate Athletics, violation of University regulations, policies,procedures,or directives not remedied after 30 days written notice...criminal conviction, or unapproved absence from duty, other than for bona fide use of sick leave in accordance with University policy  without the consent of the director.  In his resignation letter, athletic director Pernetti stated that his first instinct when he saw the video tape was to fire Rice immediately, but the university decided to follow a process involving university lawyers, human resources professionals, and outside counsel.  After reviewing the the independent investigative report, the consensus was that university policy would not justify dismissal.

So, on the one hand, there is the claim that outside counsel said that termination was not appropriate, yet  on the other hand, the decision not to terminate was based on consensus following a process chosen by the university.  Ralph Izzo, the chairman of the university's Board of Governors stated that the university "paid dearly for good advice and I'm not sure we got good advice in this case."

Perhaps a more accurate summary of what happened than that offered by Chairman Izzo is that the university retained an outside law firm to do an investigation which it did, and in reviewing that report of that investigation along with some unidentified factors, university representatives decided that a fine and suspension were adequate.... until unfavorable publicity called the process into question.  So, is there anything than employers and their counsel can learn from Rutgers' handling of this matter?

From the perspective of drafting an employment contract, an employer wants to include all possible reasons for termination so that it will not have missed something serious enough to warrant termination, thereby exposing the employer to liability for breaching the just cause provision of the contract. While it is tempting to use a boilerplate definition of "cause," an employer should consider the position in question, and with the aid of counsel, really review what action or inaction would give rise to the need for termination.  It may be necessary to list non exhaustive examples with the prohibited conduct.

There is a level of intensity in coaching college athletics not found in the ordinary workplace.  Past experience has shown that coaches have been terminated for striking opposing players; choking players; grabbing students; bullying players; forcing injured players to practice; and partying with college students.  In light of these past misdeeds of coaches, a university or college would want to make sure that such conduct fit into the definition of "cause." in relation to specific categories.  In this case, Rice's actions do seem to fall within the category of bringing shame or disgrace to the university.

With respect to outside counsel, a firm which is being retained to conduct an investigation should do what was done in this case; identify the scope and the nature of the engagement, and state specifically what is being done, i.e. conducting an investigation into the designated areas.  Upon completion, it is advisable to once again identify the scope of the engagement and to indicate that if additional work is requested upon review of the report, it will be identified in writing with the specific additional actions to be taken by the firm.

 Apparently in the Rutgers case, hindsight required that someone take the blame, whether deserved or not.  There is nothing wrong with using a process as was done in this case.  In fact, using a process with the involvement and input from different perspectives often avoids mistakes.  Here the process is not to blame; rather, those who should have been more attentive during the process were not.  As a result, Rutgers will be literally paying the price.









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