FARGO — For what is believed to be the first time in athletic department history -- certainly in the Division I era -- North Dakota State is figuring out how to dissolve the final year of a coaching contract.
The phrase on the street when it comes to Maren Walseth and her exit as the head women’s basketball coach is commonly called a buyout. It may not be that easy.
Walseth and the university agreed "to mutually part ways" two weeks ago. NDSU athletic director Matt Larsen said Monday that the two parties are working on the “separation language in her contract.”
“There are always opportunities to negotiate different terms based on what’s best for her and best for the school,” Larsen said. “Those are conversations that we are having now, based on how she sees her future.”
What that means could be many things, said attorney Chris Kennelly of Kennelly Business Law in downtown Fargo.
Kennelly has negotiated Division I coaching contracts.
“A separation agreement is generally entered into because one of the parties to the contract believes that they are entitled to something other than what was agreed to in the original contract," he said. "It is not always clear which party believes they are in the position to negotiate a new agreement."
Under Walseth’s six-year contract that was signed in 2014, terminating the contract for “just cause” would have to include any of four factors: A breach of university rule, state or federal law; dishonesty by coach in documents or records; any act that brings the coach or NDSU into public contempt, scandal or ridicule; or failure by the coach to be a good citizen.
There is no evidence, at least publicly, that Walseth breached any of those standards.
If that’s the case, why address the separation language?
“It’s almost like they’re suspending her with pay,” Kennelly said. “So then they’re saying, look, why don’t we negotiate the terms of our separation agreement? Instead of paying you (the amount of her final contract year), what’s the one-time payout we can reach? Is it $40,000? Is it $50,000? What’s this one-time agreement we can reach?”
Not winning enough games would not warrant just cause. Walseth was 72-105 in her five years. But by contract, she is required to “mitigate NDSU’s damages by making reasonable and diligent efforts to obtain new employment.”
“If a coach believes she can obtain new employment immediately, it could be in the coach's best interests to negotiate a specific buyout amount," Kennelly said. "The coach would receive the money and be able to accept the new employment without losing most or all of the money owed under the terminated contract. From the school's perspective, it prevents the coach from a taking a year off from coaching and being responsible for the full amount under the contract."
Walseth was an assistant for seven years at a successful Penn State program that won three Big Ten Conference championships and made four NCAA Tournament appearances while she was there. She spent three years at Navy and is a former WNBA player. She is one of the all-time greatest Minnesota high school players.
So, considering her background, getting back into the Division I basketball business in short order is possible.
But if Walseth were to take a position out of basketball, NDSU would be obligated for her entire year’s salary. Her base for 2018-19 is $158,450. NDSU would have to cover her benefits for the year, also.
Taking a total salary buyout is not necessarily cut and dried in the business. When Division I mid-major school Wright State (Ohio) fired men’s basketball coach Billy Donlon in 2016, he had two years remaining on his contract. But Donlon signed a separation agreement for $225,000 -- about equal to one year salary of his contract.
Larsen said he has dealt with a similar situation before when he was an assistant athletic director at Stony Brook University (N.Y.), where he was the athletic department’s chief financial officer. The biggest difference is Stony Brook employees were members of a union.
“There were always opportunities to negotiate differences that were beneficial to the employee and also beneficial to the institution,” Larsen said. “There’s always flexibility.”
Kennelly said “the sky’s the limit” as to what could factor into a potential separation agreement.
“Unlimited," he said. "It is possible NDSU believes Walseth breached the contract or that Walseth will immediately gain employment in which case it is likely that the negotiated payment would be less than the contract amount. It is also possible that Walseth believes NDSU breached the contract and she has claims against the school that exceed the salary owed in which case it is likely that the negotiated payment would be greater than the contract amount."