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  • Rick Pitino and Louisville appeared destined for a lengthy legal dispute over the termination of his contract. What role could that play in college hoops' seismic scandal?
By Michael McCann
October 14, 2017

Former University of Louisville men’s basketball coach Rick Pitino could become a key figure in the U.S. Department of Justice’s college hoops prosecutions. Brian Bowen, a Louisville freshman, is widely assumed to be the unnamed person identified in a criminal compliant filed against Adidas executive James Gatto and others. Bowen—who in June Pitino said, “fell into our lap” due to “luck”—allegedly received $100,000 in a bribe to enroll at Louisville. Any emails, texts or other digital and written communications that potentially link Pitino to defendants and witnesses in the college basketball criminal prosecutions could turn Pitino into a key witness or even a defendant himself.

This backdrop sets the stage for a related legal controversy involving Pitino: whether Louisville owes him as little as $10,000 or as much $44 million on the remainder of his contract. Pitino’s contract, which was set to expire in 2026, was officially terminated when the Board of Directors of the University of Louisville Athletic Association (ULAA) met on Monday.

Louisville placed Pitino on an unpaid disciplinary suspension on Sept. 26, a day after the sealed criminal complaints went public. Then Pitino was notified that the university intended to fire him “for just cause”—meaning due to a material breach in his employment contract, relieving Louisville of its contractual obligation to pay out the remainder of the deal to Pitino. Firing Pitino for cause cannot be done instantly; Pitino’s contract requires that he receive 10 days’ prior written notice and an opportunity to be heard.

It is critical that Louisville complied with the procedural safeguards stipulated in Pitino’s contract. If the university had failed to do so, Pitino and his attorneys would gain a compelling legal argument that the university breached the contract and therefore must pay him the entire amount.

On Oct. 3, Pitino received a letter from Gregory Postel, interim president of the university and chair of the ULAA Board of Directors. The letter provided Pitino with formal notice of the charges. By waiting to act on Pitino’s contract until Oct. 16, the university, through the ULAA, satisfied the 10-day notice requirement. Postel also invited Pitino to appear either in person or by video in order to explain his perspective and offer exonerating evidence, satisfying the university’s contractual obligation to Pitino to be heard.

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Understanding Louisville’s legal arguments

According to Postel, the university possesses multiple legal justifications under the “termination for just cause” section (Section 6) of Pitino’s employment contract. Section 6 expresses that Louisville can, with cause, fire Pitino for a material violation of the contract or for a refusal or unwillingness to perform the contract to the best of Pitino’s abilities. As noted above, a firing “for just cause” would relieve the university of the obligation to pay out the remainder of Pitino’s contract.

Postel cites several ways in which Pitino allegedly failed to satisfy the core duties of his contract. Those duties are spelled out in Section 4 of the contract. Among other job functions, they concern adequately overseeing the men’s basketball program, promoting academic integrity and ethical conduct and notifying Louisville athletic compliance staff at appropriate times. Postel charges that Pitino failed to meet those job duties through his alleged:

• Failure to diligently supervise compliance of assistant coaches.

• Failure to promote an atmosphere of compliance, academic integrity, and ethical conduct within the men’s basketball program.

• Failure to monitor the activities of all assistant coaches and administrators involved with the program who report, directly or indirectly, to Pitino.

• Failure to notify compliance staff of concerns or red flags relating to the “late surprise commitment” of Brian Bowen and failure to notify compliance staff of the presence on campus of investment advisor Christian Dawkins (an alleged briber).

• Failure to ensure staff cooperation with university, conference and/or NCAA investigations and accept responsibility for maintaining the integrity of the investigation and enforcement process.

• Failure to take responsibility for violations.

• Failure to actively monitor staff’s activities, resulting in the commitment of multiple NCAA level-1 violations.

• Engagement in willful misconduct that caused a major violation of a rule or bylaw of the university, the conference or NCAA.

• Engagement in willful misconduct that tends to greatly offend the public, causing disparaging media publicity of a material nature that damages the good name of the university.

Postel emphasizes that Pitino’s alleged misconduct has occurred for years. “Your involvement,” Postel writes, “in these recent scandals cannot be considered isolated events. Indeed they are illustrative of a pattern and practice of inappropriate behavior.”

That said, Postel’s letter stresses that Pitino’s dismissal primarily reflects his “involvement in two recent and highly publicized scandals.”

The first such scandal is the escort scandal involving Katina Powell. Powell, who has described herself as the “escort queen” of the Louisville men’s basketball program, says she paid escorts to have sex with players and recruits. Such transgressions led the NCAA Committee on Infractions on June 15, 2017 to suspend Pitino for five ACC games. Pitino was found to have failed to adequately supervise and monitor his program. The NCAA separately punished Louisville by vacating up to 123 victories, placing the school on four years’ probation and ordering the school to return its portion of conference revenue sharing.

The second scandal refers to the one now in the news: the university being notified by the Office of the U.S. Attorney General of “a criminal investigation implicating certain members of the men’s basketball program, including several coaches.” As Postel stresses in his letter, the scandal entails “a scheme of fraud and malfeasance in the recruitment of student athletes involving you and multiple members of your coaching staff in violation of federal law and NCAA Division I Bylaws.” Along those lines, Postel asserts, Dawkins—the financial advisor facing over 100-years in prison—was on the Louisville campus “for purposes related to the basketball program.” Postel contends Pitino is responsible for the failure of the basketball program to notify the compliance department of Dawkins’ presence.

From a plain reading of Pitino’s contract, it appears that the university is well within its authority to fire him for just cause. Even when viewing Pitino in the most favorable light, he seemingly failed to prevent various kinds of corruption that have damaged the university’s name and brand. More critical interpretations of Pitino’s behavior suggest he knew about the corruption or perhaps even directed some of it.

If any of those interpretations proves correct, Pitino would have violated his contract in a way that likely empowers the university to fire him for cause.

Pitino’s potential legal arguments

Every legal controversy has at least two sides, and that is true here. Take the perspective of Pitino.

If, as expected, Louisville refuses to pay Pitino the amount of money he believes he is owed under his contract, Pitino, through his attorney Steve Pence, could take legal action. Namely, he could sue Louisville for breach of contract and potentially other claims, such as defamation and tortious interference with business relations. Pitino might also raise claims against the NCAA and the ACC for proclaiming assertions (which Pitino would describe as untrue) that contributed to his firing.

Pitino’s core argument derives from the absence of verified facts: No court of law has issued a ruling that confirms allegations brought by Louisville, the NCAA or the Justice Department. Indeed, although Pitino has been implicated as having direct or indirect involvement in various forms of corruption, he can maintain his innocence until proven otherwise.

Along those lines, Postel’s letter does not mention or allude to the one scandal where Pitino’s involvement was confirmed: in 2009, Pitino admitted to having an affair with a woman, Karen Sypher, and also paying for Sypher to have an abortion. In 2011, Sypher, was convicted of attempting to extort Pitino. Louisville took no public action against Pitino, which suggests the scandal should not be used to justify firing Pitino several years later—especially since Pitino and Louisville signed a contract extension in 2015. After all, if Louisville found Pitino’s involvement in that matter worthy of punishment or even firing, then the university should have already taken such action. Instead, the university would later extend Pitino’s contract.

Pitino could also portray himself as a scapegoat for broader institutional problems at Louisville. To that end, Pitino might blame his superiors, such as athletic department officials or the university provost or president, as far more responsible for corruptive practices related to the men’s basketball program than he. Pitino might even assert that he was directed by his superiors to engage in wrongdoing. If not outright directed, Pitino might insist that he was pressured by his superiors to do “anything” to maximize his team’s chances for success and maximize revenue generated by the men’s basketball team. Given that “big time” college sports these days seem almost entirely about winning games and making money, such a portrayal would not be far-fetched.

From that lens, Pitino might assert that Louisville breached a covenant of good faith and fair dealing with him: Pitino would have been directed or pressured by his employer into taking actions that led him to breach his employment contract. In that same vein, Pitino could depict Louisville as intentionally failing to take steps to mitigate the corruption. Pitino might thus declare that it was the university, not he, in breach of the employment contract.

It is also possible that Pitino could claim that the university is in breach of contract by failing to give him an adequate “opportunity to be heard.” Along those lines, Pitino might argue that Postel’s letter and public remarks have made it impossible for Pitino to get a fair shake when the ULAA board meets on Monday.

For instance, Postel has said the university “will be looking for someone with integrity” to coach the men’s basketball team. This remark implies that Pitino lacks integrity. Such a remark could provide Pence (Pitino’s attorney) with more validation when he claims that Pitino has already been “effectively fired.” Process matters: if Pitino was “effectively fired” before he had a credible chance to plead his case to the board, then he was arguably denied his contractual right to an “opportunity to be heard.”

In addition to contract claims, Pitino could contend that those who have portrayed him as corrupt have defamed him and caused him professional ruin. Defamation requires a showing that another person’s statement or expression was factual-sounding (as opposed to mere opinion), false and caused reputational damage. As a public figure, Pitino would also need to establish that those who allegedly defamed him do so intentionally or while knowing their statements were false.

Pitino’s fall could also set the table for a tortious inference claim, where he could maintain that his contract with Louisville was wrongly damaged by false and fraudulent accusations. Pitino might also charge that his capacity to engage in potential coaching contract negotiations with other universities has been irreparably harmed.

Before you ascribe to the view that Pitino would likely win a lawsuit, it’s worth considering obvious caveats. Most importantly, the 65-year-old Pitino arguing that he was a victim or a patsy of college corruption might not pass the smell test. He is a longtime and sophisticated coach with deep ties throughout college basketball and the sports apparel industry. Pitino is anything but naïve or ignorant of his surroundings. It might also be a stretch for Pitino to claim he was merely “following orders” when his nominal superiors likely granted him substantial autonomy.

The danger for Louisville if Pitino goes to court over contract dispute

As explained above, Pitino has clear incentives to blame others at Louisville for corruption related to the men’s basketball program. This is most obviously true in regards to the criminal prosecutions, which Pitino wants no part of, but it is also true when considering his contract dispute.

Therein presents a real risk for Louisville and its officials. If Pitino “goes nuclear” on the university, there is no telling what kinds of emails, texts, documents and other correspondences with Louisville officials that Pitino might share in court or with media. The Justice Department would certainly be interested in obtaining those materials, which could lead to additional charges or at least evidence to prosecute existing charges.

Pitino, then, may have substantial leverage over Louisville. If that proves true, expect the university to eventually reach a financial settlement with Pitino. In it, Pitino would be paid a significant portion on the remainder of the $44 million. In exchange, Pitino would relinquish any legal claims he may have against the school and its officials. Both sides would also sign non-disclosure and non-disparagement clauses that prevent badmouthing of the other.

The college sports corruption scandal will likely take many twists in the months and years ahead. It is just as likely that Rick Pitino—and any knowledge he shares with prosecutors and the public—will play a central role in it.

Michael McCann is SI’s legal analyst. He is also an attorney and the Associate Dean for Academic Affairs at the University of New Hampshire School of Law, and co-author with Ed O'Bannon of the forthcoming book Court Justice: The Inside Story of My Battle Against the NCAA and My Life in Basketball.

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