Fired MSU Coach Tests Employer Power to Jettison PR Liabilities

Fired Michigan State University football coach Mel Tucker’s fight to keep his $80 million payout confronts a contract trend in which brand-conscious employers have increasingly wielded contracts to unload high-dollar liabilities.

Last week Tucker reached a deal allowing him to use his alleged sexual harassment accuser’s private text messages in forthcoming legal battles over his firing.

With limits, Tucker can use texts between harassment consultant Brenda Tracy and her deceased best-friend, under the terms of a stipulated protective order reached in a state court Oct. 26. Tucker is seeking to use the texts, in which Tracy discusses her personal relationship with another coach, to claim the university couldn’t fire him for what he says was a consensual phone-sex incident that Tracy reported as harassment.

Tucker’s battle highlights how contract terms for coaches and high-profile celebrities have changed in recent decades as universities and companies write exit-strategies into deals—a trend especially among universities sensitive to scandal.

“This has altered over time where leverage is really in favor of schools when they enter these multi-year, multi-million dollar deals,” Peter A. Carfagna, Harvard Law School professor and CEO of sport marketing firm Magis, LLC, said. “If the highest-paid person in the university is doing something that damages the image of the university, careful lawyers are going to craft really good, soft discretionary ‘cause’ clauses that are going to give them an out.”

The Michigan State University Board of Trustees is under a microscope after years of high-profile scandals. For years, former school doctor Larry Nassar sexually assaulted US Olympics team gymnasts, casting a cloud over university management as the school fought the state to keep some records about the matter from the Michigan Attorney General. The school also recently was openly criticized by Gov. Gretchen Whitmer (D), one of its most famous alumna, for the school’s shallow investigation into a February shooting in which three students were murdered.

‘For Cause’

At the center of the controversy is a legal question of how to interpret the “for cause” firing clause in Tucker’s deal.

Normally, in “for cause” firings, an employer can only terminate an employee “if they designate the reason they are being terminated and can prove that the employee actually did what the employer claims caused the termination,” Heidi Sharp, the chair of the State Bar of Michigan Labor and Employment Law Section, said in an email.

Employers can terminate without a warning if the action or conduct of the employee is of a magnitude that it cannot be remedied, is detrimental to the employer’s business, or was listed as a reason for termination in their employment contract, she said. “Most employment contracts will list the reasons an employee could be terminated for cause such as fraud, dishonesty, a felony conviction, violation of company policy.”

Tucker’s mega-deal was negotiated in late 2021, when both Tucker and the Spartans he coached were flying high.

He’d led Michigan State University to a 9-2 record, and a No. 12 College Football Playoff ranking with a signature victory over University of Michigan—the school’s bitter rival who was ranked sixth in the country at the time.

“Spartan fans around the country are enjoying the success of this year’s football program and we look forward to many more successful seasons, competing at the highest levels under Coach Tucker,” then-Michigan State University President Samuel L. Stanley Jr. said in a November 2021 statement.

‘Leverage’

Tucker is appealing an internal university hearing from last week that found he harassed Tracy. If unsuccessful, his next move would be to sue to enforce his deal in state court.

Tucker declined requests for comment. But even if he mounts compelling evidence for his case, recent coach firings have demonstrated the power of universities to respond quickly to controversy and part ways with coaches relying on contract terms.

In July, Northwestern University fired longtime football coach Pat Fitzgerald due to hazing within the team. There’s no evidence Fitzgerald knew about the hazing, but college football rules and a strong contract meant his 10-year, $57 million deal could be severed.

This is par for the course now. Law school classes are taught, and law review articles written, on how schools and brands can use things like “morality” clauses to gain leverage in “for cause” firing scenarios.

To prevent another school from stealing Tucker, Michigan State entered into a 10-year deal estimated at roughly $95 million. But with the large payout came a school-favoring clause allowing termination of Tucker “for cause” if he “engages in any conduct which constitutes moral turpitude, or which, in the University’s reasonable judgment, would tend to bring public disrespect, contempt or ridicule upon the University.”

“We stand by our decision to terminate Tucker’s contract for cause and will vigorously defend against any claim brought forward,” university spokesman Dan Olsen said in an email.

Coaches get big paydays, while schools win leverage in the details, Carfagna said. Contracts with squishy terms like “conduct unbecoming” and “reputation,” as well as terms that give the university power to define those words, can schools to sign “the hot hand” popular coach and often break ties if things go sideways.

“I’m sure they left themselves gaping holes in each of these variations to be able to say, ‘we gotcha, we gotcha good’ or they wouldn’t have pulled the trigger,” he said.

The case is Brenda Tracy, LLC v. Alvarado, Mich. Cir. Ct., No. 23-000671-CZ, stipulated protective order 10/26/23.