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Chavis v. LSU: Dispute Over Liquidated Damages Clause in Coaching Contract

On February 27, 2015, Johnny J. Chavis (“Chavis”) filed suit against Louisiana State University and Agricultural and Mechanical College (“LSU”) and Texas A&M University (“A&M”) is Brazos County, Texas. In his complaint, Chavis explains he entered into an employment agreement with LSU on January 1, 2009 to serve as the defensive coordinator and linebackers’ coach. The term of the original agreement was from January 1, 2009 to December 31, 2011. On January 1, 2012, Chavis and LSU amended the employment agreement to extend his employment until December 31, 2014. On January 10, 2013, Chavis and LSU again extended his employment to conclude on December 31, 2015.

According to the complaint, under Section 12(c)(1) of the amended agreement, Chavis was afforded the right to terminate his employment agreement with LSU without cause upon thirty (30) days written notice to LSU. As per Section 12(c)(1) of the employment agreement, if exercised, the agreement would terminate thirty (30) days after LSU received notice of termination thereby creating the termination date. The amended employment agreement also required Chavis to pay liquidated damages to LSU; however, the liquidated damages provision of the agreement required $0.00 in liquidated damages if he terminated the agreement with LSU between zero (0) and eleven (11) months remaining on the term of the agreement. If terminated with LSU between eleven (11) and twenty-three (23) months remaining on the agreement, then Chavis would owe $400,000.00.

At the conclusion of the 2014 regular season, Chavis and LSU again began discussing an extension of his employment agreement. By mid-December, the parties reached an impasse and were unable to agree on the terms of an extension. According to the complaint, on January 2, 2015, LSU’s director of athletics, Joe Alleva, sent a letter to Chavis demanding payment in the amount of $400,000.00 as liquidated damages. On January 5, 2015, Chavis gave his written notice to LSU terminating his employment without cause. The complaint argues that Chavis’ termination date, as per Section 12(c)(1) of his employment agreement, was February 4, 2015, which falls within the eleventh month remaining on his employment agreement and, thus, he does not owe LSU liquidated damages.

On January 5, 2015, Chavis accepted employment as the defensive coordinator for A&M. According to the complaint, A&M is obligated to satisfy any liquidated damages, if any, associated with his employment with LSU. A&M does not believe that liquidated damages are due and owing to LSU and, thus, has not paid any such amount to LSU. Accordingly, pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code, Chavis requests that the Court declare that “Plaintiff is not obligated to pay LSU liquidated damages as a result of his termination of the Employment Agreement without cause. Alternatively, if the Court rules LSU is in fact entitled to liquidated damages, Plaintiff requests the Court to determine the amount of liquidated damages, if any, due LSU under Chavis’ previous Employment Agreement.” Chavis also requests all costs and reasonable and necessary attorney’s fees pursuant to Section 37.009 of the Texas Civil Practice and Remedies Code.

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