SUNDAY EDITION | Why firing Tom Jurich could be ‘complicated or very expensive’ for University of Louisville
A look at how Tom Jurich's employment contract is structured in his favor.
LOUISVILLE, Ky. (WDRB) -- If the University of Louisville board of trustees wants to fire Tom Jurich, the university likely will owe the longtime athletics director a year’s pay – something on the order of $2 million or $3 million – even if U of L asserts that Jurich knowingly broke the rules or the law.
In 2011, former U of L President James Ramsey obligated U of L to pay Jurich even if he is terminated “for cause” under his contract.
The unusually generous provision – combined with other contractual terms that are favorable to Jurich – underscore the obstacles U of L trustees face if they wish to oust Jurich without breaking the bank, according to employment lawyers who reviewed Jurich’s contractual documents at the request of WDRB News.
“I think it’s either going to be complicated or very expensive” if the board chooses to fire Jurich, said attorney Michele Henry, of Louisville’s Craig Henry PLLC, who has represented employers and employees in workplace disputes.
Dennis Murrell, an attorney with Middleton Reutlinger who negotiates employment terms for corporate executives, said the language of Jurich’s 2007 contract makes it “a tough fight” for the university to establish justifications for his firing.
Jurich, who is widely credited with catapulting U of L athletics into a different league during his 20-year tenure, was placed on administrative leave on Sept. 27.
Jurich, whose total pay was more than $5 million last year, has nine years remaining on his contract, and his attorney has characterized the suspension as, in essence, a firing.
U of L interim President Greg Postel sidelined Jurich a day after federal authorities unveiled criminal complaints alleging corruption in college basketball.
While no individual at U of L has been charged, federal prosecutors say at least one U of L basketball coach was complicit in a scheme to funnel $100,000 from Adidas, the university’s longtime apparel sponsor, to the family of a prized recruit.
The allegations came only months after the NCAA handed down severe penalties related to a separate scandal that engulfed the basketball program involving strippers and prostitutes.
In the wake of the federal probe, U of L’s athletics board has already begun the process of firing head coach Rick Pitino, a move the board could complete at its meeting Monday.
Jurich’s fate, however, is less certain.
The board will likely discuss Jurich’s status at its meeting Wednesday, though it’s unclear if the body will make any decisions.
Postel has appointed an acting athletics director, Vince Tyra, from outside the university.
Jurich’s laywer, Alison Stemler, said in a Sept. 29 letter that the naming of a temporary replacement suggests U of L “do(es) not plan for Tom to return to his job in the foreseeable future.”
But two major athletics donors have been vocal in their support for Jurich in recent weeks.
And Gov. Matt Bevin, who appoints 10 of the 13 members of the board of trustees, said in an interview on WHAS-840 last week that he’s “not convinced” Jurich’s career at U of L is over.
“I think there are many, many people in this community who recognize the value of what he’s done,” Bevin said, adding that Jurich’s fate is up to the trustees.
“All I can tell you is that we are continuing to gather facts and learn about the investigation," Postel told reporters following that meeting. "There is only so much that is known at this point and we anticipate there will be much more for us to learn about and digest.”
'High bar' for justified firing
Even if U of L fires Jurich for cause, the 2011 letter from Ramsey appears to obligate the university to pay him, in a lump sum, the “actual total compensation,” without retention bonuses, that he earned in the previous fiscal year.
“It doesn’t appear there is any way to avoid that provision,” no matter what misconduct U of L might allege against Jurich, Henry said.
While the amount U of L would owe was not immediately available, Jurich’s total compensation from U of L and its nonprofit foundation averaged $2.76 million a year from 2010 to 2016, according to a forensic investigation of the foundation released in June.
Jurich’s pay jumped to $5.35 million in 2016 mainly because of the vesting of an annuity and tax benefit worth $3.35 million, according to U of L athletics spokesman Kenny Klein. The annuity, first promised to Jurich in 2004, pays an after-tax $200,000 a year for a decade beginning when Jurich turned 60.
But to oust Jurich with only a year’s severance would also require U of L to meet what Murrell called a “high bar” of alleging not only that misconduct occurred on Jurich’s watch, but that he participated in it or condoned it.
“He has to know about it,” said Murrell, who negotiates contracts on behalf of high-level corporate executives. “There is nothing here that appears to allow him to be terminated, for cause, for negligence.”
Jurich’s contract lists four situations that can lead to his justified termination, including a “knowing violation” of his job duties and the “known tolerance” of others in the athletics who run afoul of NCAA rules.
It also lists “dishonest conduct” and “willful misconduct” to the detriment of the university, with an example of Jurich being convicted of a felony.
Glenn Wong, a professor and executive director of the sports law program at Arizona State University, said the university may be able to argue that Jurich committed a “knowing violation” of one or more of his job duties as outlined in the contract.
Among those duties is to supervise coaches and ensure compliance with the law and NCAA rules.
“If what is alleged in the FBI's complaints is true, did Jurich fulfill his duty to ‘supervise’ the men’s basketball coaching staff? To what extent did Jurich's ‘supervision’ duties require him to go?,” Wong said in an email to WDRB News. “These are questions of law and fact that cannot yet be answered but will be key to the disposition of any contract dispute” between Jurich and U of L.
Jurich may also be vulnerable under the contract’s requirement that he serve U of L “in a collegial fashion” and to represent the university “in the best possible light,” according to Wong.
While Jurich’s tenure has been “nothing short of amazing” overall, Wong said, “Clearly, the recent developments do not paint the University in the best light, and they have occurred on Jurich’s watch. Jurich’s culpability in these latest issues may determine whether his ‘service to the University’ can be considered compliant,” with his contract.
In his Sept. 27 letter placing Jurich on administrative leave, Postel bemoaned the alleged conduct described in the criminal complaint unveiled last month, but stopped short of alleging Jurich knew about it.
Nor did Postel specify the particular provisions of Jurich’s contract that the university might invoke if it tries to fire him for cause, Henry noted.
“The level of misconduct and criminal activity alleged to have been engaged in by your coaching staff, combined with the negative local, regional, and national attention brought upon the University of Louisville by the Athletics Department, is unacceptable,” Postel said in the letter.
Stemler, Jurich’s lawyer, stressed in her Sept. 29 letter to U of L that Jurich had “no knowledge of the alleged misconduct and criminal activity” described in the federal criminal complaint. Nor did Jurich “cause or contribute to the negative publicity” the case has brought on U of L, she said.
“The extraordinary and unprecedented alleged wrongful behavior was kept from Tom precisely because everyone in the Athletics Department knows that Tom will not tolerate any violation of law or NCAA rules,” she said. Stemler did not return a call for this story.
Meanwhile, should the university fire Jurich without cause, Ramsey’s 2011 memo says Jurich would be owed at least four years of his base salary – currently, $1.3 million – and three years of Jurich’s annual $150,000 “key employee” deferred compensation credit, plus three years of his continued university-paid country club memberships.
Ramsey also specified that the $150,000 annual contribution be “grossed up” to cover Jurich’s income taxes, a practice that can increase the payments by 75 percent.
Jurich's contract documents, obtained under the Kentucky Open Records Act, are below: