New York Giants assistant coach Bret Bielema, who previously served as University of Arkansas head football coach, filed a $7 million lawsuit against the Arkansas Razorback Foundation. Sportico has obtained the civil cover sheet and 64-page complaint, which will be litigated in Arkansas federal court. The case could become key precedent for duty to mitigate clauses in coaches’ contracts.
Bielema contends that the Razorback Foundation, a nonprofit 501(c)(3) entity that fundraises and supports Arkansas Athletics, breached a contractual obligation to pay him about $12 million. This monetary amount reflects a buyout agreement that Bielema signed in January 2018 in the aftermath of him being fired.
The Foundation’s unwillingness to pay Bielema stems from its conclusion that the former Big Ten coach of the year has willfully refused to mitigate the amount of money owed to him. The duty to mitigate in coaches’ contracts is the obligation of a fired coach who is still owed money from his or her school to make reasonable efforts to find another job, the income from which offsets money owed by the school. Sportico has uncovered copies of relevant contracts in the dispute.
Bielema’s complaint contains multiples claims for breach, as well as a claim that he was portrayed in a misleading way.
Marshall Ney, the attorney for the Razorback Foundation, in an email said it appeared Bielema filed suit in order to avoid being sued.
“What I can share at this point before digesting the entire document is that the Foundation previously demanded that Bret Bielema return the $4,555,833.29 that had been paid to him prior to the Foundation’s discovery of his multiple material breaches of the agreement,” Ney said.
Bielema’s coaching history and its relevance to the case
Bielema, 50, served as head coach at the University of Wisconsin from 2006 to 2012. He compiled an impressive record of 68-24 during those seven seasons. Bielema was named Big Ten coach of the year in 2006 and, in 2010, was a finalist for the Bear Bryant Award given to the top coach in college football. He also led the Badgers to three straight Rose Bowls.
Bielema’s success at Wisconsin attracted Arkansas, a Southeastern Conference program that finished 4-8 in 2012 under John L. Smith. Arkansas had also fired Bobby Petrino earlier in 2012 after it was discovered that he hired his mistress over more than 150 qualified candidates.
In December 2012, Arkansas hired Bielema. Bielema’s success at Wisconsin, however, didn’t translate with the Razorbacks. He compiled a 29-34 record over five seasons. The school fired him in November 2017 and a month later hired Southern Methodist University head coach Chad Morris.
Bielema’s next coaching opportunity came in the NFL. In July 2018, the New England Patriots hired Bielema as a consultant to head coach Bill Belichick. Bielema served in that capacity during the 2018 NFL season, which ended with the Patriots defeating the Los Angeles Rams in the Super Bowl. He became the Patriots defensive line coach in the 2019 season. In January, the New York Giants and its new head coach, Joe Judge, hired Bielema as outside linebackers’ coach and senior assistant. Bielema and Judge previously coached together with the Patriots.
Bielema could become a Division I head coach again. His success at Wisconsin and role with a Super Bowl winning team would attract many programs. Earlier this year, Bielema interviewed at Colorado and was under consideration for the same role at Michigan State. Further, as detailed below, Bielema and his representatives have reached out to college programs with head coach openings.
It’s also possible that Bielema will stay in the NFL and continue to move up the coaching ladder.
He is now part of the Belichick coaching tree that over the last two decades has produced a dozen NFL head coaches, including Bill O’Brien (Houston Texans), Matt Patricia (Detroit Lions), Brian Flores (Miami Dolphins) and Judge.
The multiple contracts Bielema signed with the University and the Razorback Foundation
Understanding the legal dispute between Bielema and Arkansas requires an overview of the multiple contracts they signed.
In December 2012, the university’s Board of Trustees signed Bielema to a six-year contract. It specified that Arkansas would pay Bielema an annual salary of $2.95 million. The contract contained details on other benefits, including performance incentives. For example, Bielema would be paid an additional $100,000 if he won an SEC championship game. He would also receive at least $50,000 if the Razorbacks appeared in a bowl game. The contract further guaranteed Bielema memberships at The Blessings Golf Club and the Fayetteville Country Club.
Bielema’s first season as Razorbacks coach was a disappointment. The team finished 3-9. However, the roster consisted mainly of players whom Bielema had inherited. Bielema’s second season reflected a stark improvement: the Razorbacks rose to 7-6 and they defeated the University of Texas in the Texas Bowl.
As a reward, Arkansas negotiated an extension and raise for Bielema. In February 2015, Bielema signed two contracts with Arkansas. The first was titled “First Amendment to Employment Agreement” (hereinafter “amendment”). The amendment modified several terms in the 2012 contract. For starters, it changed the ending date of December 31, 2018 to December 31, 2020. Second, it elevated Bielema’s annual salaries so that he would earn a base of $3.25 million in 2015. The base would then increase by $100,000 each year through 2020. Third, the amendment added a separate $250,000 annual payment as “retention compensation.”
The amendment also detailed how much money the Razorback Foundation would owe Bielema if the school fired him. The amount depended on when the firing occurred:
|Feb. 6, 2015 through Dec. 31, 2015||$15,400,000.00|
|Jan. 1, 2016 through Dec. 31, 2016||$15,400,000.00|
|Jan. 1, 2017 through Dec. 31, 2017||$15,400,000.00|
|Jan. 1, 2018 through Dec. 31, 2018||$11,700,000.00|
|Jan. 1, 2019 through Dec. 31, 2019||$7,900,000.00|
|Jan. 1, 2020 through Dec. 31, 2020||$4,000,000.00|
Bielema signed a second document in February 2015. It was titled “Personal Services and Guarantee Agreement” (personal services agreement). The personal services agreement noted that the Razorback Foundation “relies heavily and extensively” upon its coaches “to make speeches before various booster groups, Razorback Club meetings, public appearances before other organizations, and various fundraising activities.” It thus made clear that Bielema’s job with Arkansas extended beyond coaching and recruiting.
Bielema was also expected to raise money for the Razorback Foundation and promote the university through media, public and alumni appearances. This was standard language: coaches at “big time” programs tend to draw audiences. Schools understandably want to capitalize on that effect.
Bielema would be compensated for these promotional services on behalf of the Razorback Foundation—and compensated well. The personal services agreement instructed that he would be paid $500,000 per year “for speaking engagements and other obligations” to the Foundation. His relationship with the Foundation would be “that of an independent contractor” while he was an employee of the public university.
Bielema’s duty to mitigate and the Razorback Foundation’s right to offset
The personal services agreement also addressed Bielema’s duties if fired. This was a realistic scenario from the beginning of the Bielema-Arkansas relationship. Every year, football programs decide they need a new coach.
In exchange for termination pay, Bielema agreed to forgo various legal claims against the school and its officers. He also agreed to try to get another job. Here is the key language:
11. If Bielema is terminated by the University of Arkansas for its convenience and the Foundation is obligated to pay the amounts specified. . . Bielema agrees that those payments shall be subject to the following mitigation provisions. Bielema shall be required to do the following: Bielema shall have the duty to mitigate his damages by making reasonable efforts to gain re-employment. The parties understand and agree that if Bielema is successful in gaining such re-employment, or alternative employment of any kind the Foundation’s Guaranty Payment obligations shall be reduced by the amount of compensation the Coach earns from such employment (so long as such employment coincides with the Guaranty Payments). The Foundation’s right to reduce its obligations shall not include amounts Coach may earn from passive investments or interest not associated with new employment.
The language notes that, if fired, Bielema had a duty to mitigate what Arkansas would owe him. He had to make “reasonable efforts to gain re-employment.”
Bielema’s duty to mitigate would appear in yet another contract he signed with Arkansas. In January 2018, Bielema and the Razorback Foundation signed a “Release and Waiver Agreement” (“release”). The release was essentially a settlement. It concerned the aftermath of the school firing Bielema as coach two months earlier and was intended to avert potential legal disputes. The release set the value of the buyout at $11.9 million, which was to be paid in monthly installments into 2020. Over the next two years, Bielema was paid approximately $4.3 million.
According to Bielema’s complaint, the Razorback Foundation has demanded repayment of the $4.3 million. The Foundation also ceased making payments to Bielema as of January 2019. Bielema insists he is owed $7.7 million under the terms of the release. Crucial to the disagreement is whether Bielema complied with his duty to mitigate. The duty, as mentioned above, is expressed in the personal services agreement. It is also referenced in the release, where it receives much more detail.
In the release, Bielema agreed that he has “an affirmative duty of mitigation to diligently seek and to obtain other employment.” Whereas the personal services agreement required Bielema to make “reasonable efforts” to land a new job, the release expressed he was obligated “to use his best efforts to maximize his earning potential with any new employer(s) consistent with compensation rates for similar positions in the given industry at the time such other reemployment is obtained.” Bielema was also compelled to provide a written summary to the Razorback Foundation every six months that explained his job hunt efforts.
If Bielema landed a new job, the amount his employer paid him would be deducted from the amount Arkansas owed him. This offset would cover not only a full-time job but any income derived from consulting fees and honoraria.
There were exceptions to the offset. The Foundation agreed that Bielema earning money from passive investments that aren’t tied to new employment wouldn’t offset. In addition, the Foundation agreed to pay Bielema certain amounts of excluded income—in other words, even if Bielema landed a new job, the Foundation would be on the hook to pay him as follows: $150,000 to cover Nov. 25, 2017 to Dec. 31, 2017; $150,000 to cover Jan. 1, 2018 to Dec. 31, 2018; $125,000 to cover Jan. 1, 2019 to Dec. 31, 2019; and $100,000 to cover Jan. 1, 2020 to Dec. 31, 2020.
Bielema asserts the Razorback Foundation stopped paying him because of a belief he failed to mitigate his damages. According to the Arkansas Democrat-Gazette, Bielema “volunteered” for part of his time with the Patriots in 2018 before joining the Patriots in a paid coaching position in 2019. Sportico has learned that Bielema was compensated by the Patriots in 2018. Also, the Patriots could have paid him as much as $150,000 per year without such pay counting as an offset.
Bielema has several arguments that work to his advantage
• Bielema appears to have evidence he has actively sought top level college coaching positions.
While Bielema was employed by the Patriots, Sportico has learned that he and his agent, Neil Cornrich, let representatives of major college football programs know that Bielema was interested in head coaching positions. Among the schools with which the Bielema camp had contact were Florida Atlantic University, Boston College, the University of South Florida and Rutgers. Each school hired a different coach.
Sportico has also learned that Bielema’s contract with the Patriots allowed him to leave at any time, without penalty, to become a Division I head coach. His contract with the Giants, Sportico has further learned, contains a provision with the same effect. Not long after he joined the Giants, Bielema interviewed with Colorado and was under consideration at Michigan State. This activity suggests that Bielema pursued opportunities that would have resulted in high-paying positions that reduced or eliminated the amount owed by Arkansas. This helps Bielema to show he satisfied his duty to mitigate.
• As worded, the duty to mitigate has demanded little of Bielema
If the Razorback Foundation required that Bielema pursue other high-paying coaching jobs in college, the contractual language should say as much. It doesn’t.
Analogously, if the Razorback Foundation was worried that Bielema might take a pay cut to reposition his coaching career in the NFL, the contractual language should address that possibility. Again, it doesn’t.
Indeed, Bielema has neither been under obligation to seek employment with another college nor compelled to take jobs that pay a certain amount. The duty to mitigate implicitly invites Bielema to pursue employment in the NFL, the XFL (while it was in operation), a TV network, a radio network, a sports media publication, a high school or numerous other types of occupations. Nothing is stated about salary, status or other terms and conditions of employment.
Considering that the Foundation, as the employing body, likely played a crucial role in drafting the language, the Foundation arguably should own the words it included and didn’t include. This underscores Bielema’s best argument: as expressed in writing, the bar for him to meet the duty to mitigate is low. So long as he has made reasonable efforts to land a new job, and best efforts to maximize how much that job paid, he has satisfied his duty.
• Joining Belichick and the Patriots, even as a volunteer, could be a good career move. After being fired by Arkansas, Bielema was coming off an unsuccessful tenure as a college coach. He was also 47 years old at the time. Could Bielema have landed a head coaching job at another FBS school? Probably. A number of schools changed coaches over the next year. Bielema, who pursued jobs, was a credible candidate.
However, many football coaches, particularly those who have just been fired, would find it hard to turn down a chance to join Belichick’s staff— even at modest pay and even at low rank. To date, Belichick is the most successful football coach of the 21st century. When the 68-year-old winner of eight Super Bowls (six with the Patriots and two with the New York Giants) eventually retires, he will be remembered as one of the greatest coaches in sports history. To join Belichick’s coaching staff could “make” one’s career reputationally, not to mention the insight and knowledge a coach would gain by working for him.
As noted above, a dozen of Belichick’s assistants have landed NFL head coaching jobs. Bielema also joined the Patriots in 2018, a season when they were expected to compete for the Super Bowl (they would go on to win it, too).
Bielema may have also eyed an opportunity to advance within the Patriots. In February 2018, the Detroit Lions hired away Patriots defensive coordinator Matt Patricia as head coach. Maybe Bielema anticipated that he would prove himself to Belichick during the 2018 season and then be promoted in 2019. That indeed happened: Belichick promoted Bielema from consultant to defensive line coach. Bielema and his attorneys can make a credible argument that joining the Patriots in 2018 at low or no pay was a sensible career move and not in violation of his duty to mitigate.
How the Razorback Foundation might respond
Arkansas will answer the complaint and, over time in the litigation, detail arguments. One likely argument is to claim that Bielema, knowing Arkansas was on the hook to pay him millions of dollars and knowing about the offset provision, took advantage of the circumstances to secure a high-prestige, but relatively low-paying position with the Patriots.
Perhaps he should have been more diligent in pursuing higher-paying jobs with other college football programs.
Whether there are facts to support that line of reasoning is uncertain. It’s unknown how much the Patriots paid Bielema in 2018 and 2019 and whether Bielema was paid market value. Attorneys for the Foundation might assert that Bielema was paid substantially less by the Patriots than what he would have earned with other NFL teams. In effect, the attorneys would argue that Arkansas was subsidizing Bielema’s Patriots employment.
The strength of this argument would depend on salary data and expert testimony. If persons who held similar jobs with other NFL teams earned considerably more than Bielema, the Foundation could more credibly contend that Bielema failed to make “best efforts” to ensure he was paid market value.
Of course, Bielema could invoke rebuttals detailed above. It’s possible he was paid market value. If not, the opportunity to work for Belichick and coach a Super Bowl team could be considered a superior opportunity to a similar arrangement with another NFL team.
To that end, Bielema could retain experts who testify they would have accepted less in pay for the opportunity Bielema landed with Belichick. This is important since courts have held that the duty to mitigate damages does not require that the fired employee take unreasonable or impractical career steps.
If Bielema couldn’t have accepted the Patriots job because it didn’t pay enough to meet his duty to mitigate, he arguably would have disadvantaged his career.
The case will probably end in a settlement
Bielema’s lawsuit likely won’t be resolved for months. Even in normal times, contract litigation can take a long time. There are several stages of litigation, including time allotted for motions and pretrial discovery. The COVID-19 pandemic only elongates the timeline, with courts limiting operations and postponing hearings.
A trial is also unlikely to happen. It’s been estimated that up to 97% of all civil cases are resolved, usually through a settlement. Odds are Bielema and Arkansas will eventually work out a deal.
However, in the meantime, both sides could conceivably inflict damage on the other. During pretrial discovery, each could compel the other to turn over sensitive emails, texts and other documents that might damage reputations. Likewise, witnesses might become obligated to provide sworn testimony on topics related to Bielema’s hiring and firing.
Michael McCann is an attorney, law professor at UNH Franklin Pierce and sports law reporter for Sportico, Penske Media’s new sports business publication.