Mike Petke's Lawsuit vs. Real Salt Lake Reveals Details Behind His Firing

Mike Petke was fired by Real Salt Lake after serving a suspension for berating a Leagues Cup official with a homophobic slur, and his lawsuit against the club divulges some of RSL's inner workings and power dynamics.
By Michael McCann ,

Did Real Salt Lake illegally fire head coach Mike Petke after he called a Panamanian referee a Spanish word that is regarded as a homophobic slur?

Attorneys for Petke emphatically contend the answer is yes. This week they filed a complaint in a Salt Lake County district court arguing that RSL is liable to Petke for breach of an employment contract, intentional infliction of emotional distress, defamation, false light and related claims. The attorneys demand a jury trial and at least $687,500 in damages.

Petke, 43, served as head coach of RSL from March 2017 until his controversial ouster last month. He previously coached the New York Red Bulls and also played 13 seasons in MLS.

Here's a closer look at a lawsuit that offers a peek behind the curtain at the inner workings of an MLS club: 

The incident in question–and an interrupting cat

The genesis of the lawsuit occurred a day before RSL would host Tigres UNAL as part of the inaugural Leagues Cup competition between MLS and Liga MX clubs.

According to attorneys for Petke, his club was informed on the evening of July 23 that the match would be played with different rules than he had expected. The modified rules would impact how the game would be refereed, particularly with respect to goal kicks and free kicks. Petke was surprised and disappointed. He felt that this last-minute notice would significantly disadvantage the coaching staff and his players since they didn’t have time to prepare.

The match would be played the next day and proved to be a competitive contest. With about two minutes to go, Tigres led 1-0. Then, bizarrely, a cat ran onto the field. The cat proceeded to run in front of Tigres's Andre-Pierre Gignac, who was controlling the ball while being defended by RSL's Aaron Herrera. Oddly, the referee did not whistle a stoppage of play. The cat even made contact with the ball. Petke’s complaint contains an image of the cat’s tail seemingly touching the ball.

The cat’s interruption led to a disputed application of rules. Not only was no whistle blown, but after Gignac took a shot that went out of bounds, the referee gave the ball back to Tigres at the place where the cat had entered. It’s not clear why the referee didn’t stop the match when the cat ran onto the field or why RSL was not given the ball back after the shot had gone out of bounds. Regardless, Tigres would go on to win.

The P-word

After the match ended, Petke noticed that his players were arguing with a referee, John Pitti, over how the officiating crew had handled the cat issue. Petke, according to his complaint, was worried that his players might draw a red card by the aggressive manner in which they were interacting with Pitti. Petke then ordered his players to walk away from Pitti, whom Petke called a “moron.”

Clearly annoyed by being labeled a moron, Pitti then issue a red card to Petke. In response, Petke called Pitti a “p--o”, which the complaint calls “the P word.” The word has a derogatory meaning in Spanish and has homophobic connotations. According to Petke’s complaint, he only used the word because Pitti is Panamanian and Pitti would understand the word to mean “coward” or “jerk.”

Petke made matters worse after returning to his office. From there he wrote the word on a piece of paper. He then saw Pitti and flashed the paper at him.

The disputed aftermath

Petke’s complaint insists that he is not homophobic. It notes that Petke has consistently advocated for LGBTQ rights and “has worn clothing supporting the LGBTQ community.” The complaint also emphasizes that Petke “paid tribute” to the victims of the 2016 mass shooting at the Pulse nightclub shooting in Orlando, illustrating his commitment to tolerance and acceptance by showing a photo of Petke sitting in Orlando City's rainbow-colored section of seats.

MLS and RSL clearly regarded the matter in a different light. MLS suspended Petke, first for one match and then two additional matches, and also fined him $25,000. For its part, RSL suspended Petke without pay for two weeks. RSL also ordered Petke to attend anger management counseling and write letters of apologies to several individuals, including Pitti. RSL also described the sanctions as “the steepest” ever imposed on an MLS coach. The club, however, declined to fire Petke. At least initially, a lengthy suspension was viewed as a sufficient punishment.

On July 29, Petke and RSL signed a two-page document titled, “Violation of Club Policy.” The document expressly stated that Petke had engaged in “aggressive behavior” and had used “offensive language” on July 24. It went on to detail the terms of Petke’s suspension. Petke’s attorneys draw attention to the document stipulating that “any further violations” of club policies related to respect and tolerance “will result in immediate termination for cause under your employment contract.” 

Petke regards this language as a contractual assurance that RSL would only fire him if he committed another violation—stated differently, a pledge that he would not be fired for his controversial use of the P word since that had already triggered a suspension.

Petke’s employment would nonetheless not last. On August 7, RSL’s owner, Dell Loy Hansen was videotaped speaking with fans at a Utah Royals NWSL match. Hansen suggested he might still fire Petke, particularly after he had a chance to speak with key sponsors. Hansen also noted that his team had polled fans and found that those in the millennial generation (i.e., those born in the early 1980s to mid 1990s) were decidedly against keeping Petke.

As told by Petke’s complaint, RSL general manager Craig Waibel and executive VP of soccer operations Robert Zarkos were opposed to firing Petke and claimed that it was going to take place because Hansen had, as the complaint states, "publicly painted himself into a corner."

Waibel also, as the complaint states, went on to tell Petke that nobody thinks he is homophobic and was so fed up with Hansen's actions, that both he and Zarkos were planning on exiting the club at the end of the season. 

“It’ll be at the end of the year, because I also don’t think Dell Loy [Hansen] should ever be rewarded for who he is,” the complaint claims Waibel told Petke.

Waibel later texted Petke on August 8 about whether he would resign and accept a $75,000 buyout. Petke was told that if he declined this option, he would be fired for cause. A firing “for cause” or “with cause” generally means that because the employee violated an ethical requirement in the contract, the employer can terminate the contract without any obligation to pay the remainder of its terms. If he were fired for cause, Petke would be denied the remainder of his employment contract—an amount valued at approximately $687,500.

After failed negotiations with Petke’s representatives to reach a buyout agreement, RSL fired him for cause on August 11. The club also issued a press release that Petke’s attorneys argue was “designed to damage Petke’s reputation by suggesting he lacks certain morals and values—including, but not limited to, that Petke is homophobic, disrespectful, uncivil, and unprofessional.”

This disputed press release expressed that “it is vital that everyone, particularly our leadership, reflects and embodies our core values and the values of our community, treating all people with respect, civility and professionalism” and that the club has long “championed diversity, acceptance and inclusion throughout our organization, our stadiums and our community.” The statement goes on to explain that, “after further deliberations and a series of constructive discussions internally and with various members of our community,” the club was immediately terminating Petke’s employment.

Core arguments and likely defenses in the lawsuit

Petke’s complaint hinges on a couple of key points.

The first point is whether the July 29 “Violation of Club Policy” statement provided Petke a contractual guarantee that he would not be fired for cause for an infraction that was already punished by his suspension. In essence, Petke insists that he can’t be double punished for what took place on July 24.

To advance that argument, Petke stresses how the statement contemplates his immediate termination if “further violations” were to occur. Petke interprets this language to mean an agreement that he would not be terminated for what had already occurred. Petke also characterizes this language as a mutually agreed-upon modification to his employment contract. Furthermore, he cites in-person and electronic conversations between Petke’s wife, Kim, and both Hansen and Waibel in which everyone was on board with Petke returning. These conversations were consistent with the expectation that he would return as coach after he served his suspension.

Also, as mentioned above, Petke recalls Waibel acknowledging “no one” believed that he was homophobic. To the extent Waibel testifies to making such a comment, it would imply that Petke was dismissed due to Hansen’s recorded comments to fans.

In response, expect RSL to insist that the “Violation of Club Policy” statement did not abrogate or limit its rights to terminate Petke for cause. Those rights are contained in his employment contract. Along those lines, RSL will argue that the statement’s primary purpose was to detail the terms of the suspension—not to bestow Petke with a newfound form of job security in the wake of his misconduct. Likewise, RSL will insist that the reference to “further violations” did not preclude the possibility of termination for past violations. The club will probably claim that while it hoped a suspension would serve as an adequate punishment, its subsequent interactions with fans and sponsors made clear that key constituencies would not accept a coach who used a homophobic slur.

In that same light, whether or not team officials actually believed Petke was homophobic is not necessarily the relevant test for assessing the legality of his firing: it’s whether the controversy for which Petke is responsible triggered a violation of his employment contract.

The second key point is whether the press release defamed Petke or placed him in a false light. Defamation refers to a purportedly factual statement that is in fact false and that damages a person’s reputation. False light is similar, expect the statement is not technically false but is presented in such a misleading manner that it is highly offensive and reputation-harming. Petke charges the press release intentionally implied he is homophobic and bigoted. He insists he has a long record of supporting the LGBTQ community and used the P word to communicate a point unrelated to sexual orientation.

As a rebuttal, RSL will likely point out that the press release at no time expresses that Petke is homophobic (though after stressing about the importance of inclusion, the statement quickly pivots to announcing the firing of Petke). RSL could also argue that to the extent the press release implies Petke seems bigoted, it is a statement of opinion, not fact. Generally, statements of opinion are not governed by defamation law. Statements made in relation to litigation are also not governed by defamation law. RSL could stress that the statement was made with the anticipation that Petke would pursue a legal challenge to his firing.

It’s also possible that the court will classify Petke, a well-known person in MLS, as a public figure or as limited-public purpose figure for purposes of this controversy. If either designation were to apply, Petke would have the added hurdle of proving that RSL knowingly published false and defaming information or had reckless disregard for the information’s truth or falsity. RSL could insist that it reached a reasonable judgment about Petke on account of him using a derogatory word.

There, of course, remains the possibility that litigation could eventually be resolved through an out-of-court settlement between Petke and RSL.

Michael McCann is SI’s Legal Analyst. He is also an attorney and Director of the Sports and Entertainment Law Institute at the University of New Hampshire Franklin Pierce School of Law.

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