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Keywords

contractlawsuitdamagesappealtrialgood faithmaterial breachbench trial
contractlawsuitbreach of contractbad faithmaterial breach

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O’Brien v. Ohio State Univ., Not Reported in N.E.2d, 2007 WL 2729077, 2007 -Ohio- 4833

Facts

James J. O'Brien, the former men's basketball coach at The Ohio State University (OSU), was terminated from his position and subsequently filed a lawsuit against OSU for breach of his employment contract. The university claimed that O'Brien materially breached the contract by loaning $6,000 to the family of a Serbian recruit, Alex Radojevic, and failing to report this loan for over five years. The Court of Claims held a bench trial and found that while O'Brien did breach the contract, it was not a material breach that justified termination. The court awarded O'Brien approximately $2.49 million in damages, leading both parties to appeal the decision.

Issue

Did the state university act in accordance with the undisputed terms of the employment contract when firing men's basketball coach James J. O'Brien?

Whether the state university acted in accordance with undisputed terms of employment contract when firing men's basketball coach, which ultimately turned on whether coach materially breached contract in making loan to a recruit and not reporting it to university for over five years.

Rule

The employment contract allowed for termination for cause only in the event of a material breach by the coach or a finding by the NCAA of a major infraction. A material breach is determined by examining the nature of the breach, the harm caused, and whether the breaching party acted in good faith. The after-acquired evidence doctrine does not serve as a complete bar to a former employee's claims if the evidence was known prior to termination.

Analysis

The court analyzed whether O'Brien's actions constituted a material breach of the contract. It found that the loan to Radojevic, while a breach, did not cause serious harm to OSU, and O'Brien acted in good faith. The court also noted that OSU failed to provide O'Brien with an opportunity to remedy the breach, as required by the contract. Furthermore, the after-acquired evidence doctrine was deemed inapplicable since the university was aware of the loan before terminating O'Brien.

Independently of allegedly violating National Collegiate Athletic Association (NCAA) bylaws, basketball coach did not materially breach employment contract with state university, so as to permit termination for cause, by loaning $6,000 to family of player who was never eligible to play college basketball and by not reporting loan to university for over five years; university suffered no serious harm, coach did not act out of bad faith and would forfeit millions of dollars in guaranteed salary if university's nonperformance were excused, and university failed to give coach an opportunity to cure purported breach, as required by contract.

Conclusion

The court concluded that O'Brien did not materially breach his employment contract, and thus OSU was not justified in terminating him for cause. The judgment for O'Brien was affirmed.

The court determined that the loan was not a material breach of the contract and that the university was not justified in terminating O'Brien's employment.

Who won?

James J. O'Brien prevailed in his lawsuit against The Ohio State University. The court found that although O'Brien breached his contract by making a loan to a recruit, this breach was not material enough to justify his termination. The court emphasized that O'Brien acted out of humanitarian concern and that OSU did not suffer significant harm from his actions. As a result, O'Brien was awarded nearly $2.5 million in damages, affirming his position that the termination was unjustified.

James J. O'Brien prevailed in his lawsuit against The Ohio State University, as the court found that his breach of contract was not material enough to justify termination. The court emphasized that O'Brien acted out of humanitarian concern and that OSU did not suffer significant harm from his actions.

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