The Big 10 Expansion Groundswell

[PaloAltoCougar]

That would certainly strengthen the ACC's claim. I guess along those lines I would be surprised if the charter said anything that specific, although it may have language regarding what a majority vote can and cannot force on other members.

Furthermore, short of an explicit ratification of limitless exit fees, I imagine they would have a hard time enforcing the exit fees because they are so outside the realm of earlier exit fees used by the ACC and other conferences that $50 million would be deemed to be well beyond the contemplation of the schools when the charter (or whatever) was created.

True. Maryland could argue that the size of the fee is not a reasonable liquidated damages amount, but rather an unenforceable penalty. My 8-Ball says Christmas has come early for certain litigators and expert witnesses.

[doctorcoug]

That would certainly strengthen the ACC's claim. I guess along those lines I would be surprised if the charter said anything that specific, although it may have language regarding what a majority vote can and cannot force on other members.

Furthermore, short of an explicit ratification of limitless exit fees, I imagine they would have a hard time enforcing the exit fees because they are so outside the realm of earlier exit fees used by the ACC and other conferences that $50 million would be deemed to be well beyond the contemplation of the schools when the charter (or whatever) was created.

Isn't this idea kind of a long the same lines of non compete clauses? Courts don't like them because they are predatory?

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[Donuthole]

Isn't this idea kind of a long the same lines of non compete clauses? Courts don't like them because they are predatory?

via a galaxy s3 far far away

Au contraire; many courts love non-compete clauses. Stick to the chiropractics, bub.

[Paperback Writer]

I think those massive exit fees are a terrible idea. I would love to see this shot down in court.

I think the granting of TV rights to a conference for a set period of time is the best course. That way if a member leaves a conference, the conference retains the TV rights to all its home games during the contract period. That's what the Big 10 does and is what the Big 12 went to.

An interesting tidbit that I learned when Nebraska left the Big 12 for the Big 10 was that the exit penalty/fees were not something that Nebraska paid to the Big 12. What occurred then is that the TV revenue checks for the prior season went from the networks to the Big 12. The conference then dolled out the revenue to each school. So all the Big 12 had to do was withhold the settlement amount from Nebraska once they received those big check from the networks.

In Maryland's case, that withholding period would have to be over several seasons since there's no way ACC schools receive $50 million per season. That's probably why the ACC has a requirment to inform the conference a couple of years in advance so they can begin withholding funds.

Another interesting fact about the grant of revenue rights is that Nebraska insisted the Big 12 do this in order for it to promise to stay for the next TV contract period. Some Big 12 schools would not agree to this (cough...Texas...cough) so Nebraska questioned the future stability of the Big 12 and bolted for the Big 10 (they may have left regardless but that was the last straw). Interesting that Big 12 schools now have signed over their TV rights to the conference.

[Scratch]

True. Maryland could argue that the size of the fee is not a reasonable liquidated damages amount, but rather an unenforceable penalty. My 8-Ball says Christmas has come early for certain litigators and expert witnesses.

Yep, I was just going to jump on to say that the clause would have to be a liquidated damages clause, so there will be hoops to jump through in enforcing those liquidated damages, depending on what North Carolina law says are the standards for determining the enforceability of such a clause.

That said, I still would not be surprised if there is some caselaw out there, either in NC or otherwise, that says that a liquidated damages clause cannot be imposed upon one member of a group of contracting parties if that individual party did not agree to it. Should be an interesting case.

[Jeff Lebowski]

I think the granting of TV rights to a conference for a set period of time is the best course. That way if a member leaves a conference, the conference retains the TV rights to all its home games during the contract period. That's what the Big 10 does and is what the Big 12 went to.

An interesting tidbit that I learned when Nebraska left the Big 12 for the Big 10 was that the exit penalty/fees were not something that Nebraska paid to the Big 12. What occurred then is that the TV revenue checks for the prior season went from the networks to the Big 12. The conference then dolled out the revenue to each school. So all the Big 12 had to do was withhold the settlement amount from Nebraska once they received those big check from the networks.

In Maryland's case, that withholding period would have to be over several seasons since there's no way ACC schools receive $50 million per season. That's probably why the ACC has a requirment to inform the conference a couple of years in advance so they can begin withholding funds.

Another interesting fact about the grant of revenue rights is that Nebraska insisted the Big 12 do this in order for it to promise to stay for the next TV contract period. Some Big 12 schools would not agree to this (cough...Texas...cough) so Nebraska questioned the future stability of the Big 12 and bolted for the Big 10 (they may have left regardless but that was the last straw). Interesting that Big 12 schools now have signed over their TV rights to the conference.

I am also against granting of rights. Free market, baby.

[Paperback Writer]

True. Maryland could argue that the size of the fee is not a reasonable liquidated damages amount, but rather an unenforceable penalty. My 8-Ball says Christmas has come early for certain litigators and expert witnesses.

My 8-ball says that there's no way this goes to court to allow expert witness testimony. But there's probably still a lot of money on the table for those attorneys skilled at negotiation. But you most likely have a much better 8-ball in your possession since I'm not an attorney (nor do I try to play one...at least not here on CUF).

When Nebraska was leaving the Big 12, there was a lot of chatter about arguments that would be used to avoid any penalties, etc. Until a lawyer in the know mentioned that there was enough dirty laundry to damage both sides and that agreement would soon be reached on a settlement amount. He/she was right. But the fan reaction by many was that they hoped it would actually go to court so the dirty laundry could be seen by all.

[Paperback Writer]

I am also against granting of rights. Free market, baby.

No man is an island...in college football...unless that man is Notre Dame.

[wuapinmon]

I am also against granting of rights. Free market, baby.

What about patents?

[doctorcoug]

Au contraire; many courts love non-compete clauses. Stick to the chiropractics, bub.

And that is why I asked a question, not stating a fact.

Interestingly, I just read about state bars that say it is a violation of professional conduct to enforce a non compete against another attorney. For instance, Wisconsin.

I'd like to hear the argument why it is ok for other professions to restrict competition but it is unethical for attorneys.

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[falafel]

And that is why I asked a question, not stating a fact.

Interestingly, I just read about state bars that say it is a violation of professional conduct to enforce a non compete against another attorney. For instance, Wisconsin.

I'd like to hear the argument why it is ok for other professions to restrict competition but it is unethical for attorneys.

via a galaxy s3 far far away

I don't understand. How can an attorney enforce a non-compete against another lawyer?

[doctorcoug]

I don't understand. How can an attorney enforce a non-compete against another lawyer?

Attorney a is hired by attorney b. Attorney a works for two years, builds a clientele and then leaves, taking clients with him/her. Unfortunately, attorney a signed a non-compete with attorney b and b sues.

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[Joe Public]

And that is why I asked a question, not stating a fact.

Interestingly, I just read about state bars that say it is a violation of professional conduct to enforce a non compete against another attorney. For instance, Wisconsin.

I'd like to hear the argument why it is ok for other professions to restrict competition but it is unethical for attorneys.

via a galaxy s3 far far away

I doubt any state bar association has opined on the ethical considerations of non-compete agreements in other professions. For attorneys, though, one concern is access to legal representation.

[doctorcoug]

I doubt any state bar association has opined on the ethical considerations of non-compete agreements in other professions. For attorneys, though, one concern is access to legal representation.

I'd love to hear the inner thoughts of attorneys as they Draft these contracts or review them. "idiot, I can't believe you guys are falling for this". That will be $5000.

If it is about access to representation, why do these organizations support non competes for healthcare? There is dramatically more of a shortage in healthcare than in law.

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[Joe Public]

If it is about access to representation, why do these organizations support non competes for healthcare? There is dramatically more of a shortage in healthcare than in law.

I'm not sure to which organizations you refer or what support you suggest they are giving. I don't know how it is in other states, but in California non-compete clauses are enforceable only in very narrow circumstances.

One of those circumstances is the sale of a business. To change your example somewhat, assume chiropractor A hires chiropractor B. After a few years, A offers to sell her practice to B for $X, which is a multiple of average annual revenue for the past three years. B agrees. A then opens a new office next door and invites all her former clients to switch to the new office with her. They have a long-standing relationship with her and gladly make the switch. California law allows for some protections against this in the sale agreement.