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Sports Law Development of the Week: NCAA Show-Cause Order Issued to Former USC Coach Todd McNair Declared Illegal by California Judge

Sports Law Development of the Week: NCAA Show-Cause Order Issued to Former USC Coach Todd McNair Declared Illegal by California Judge

By: Cameron Miller

Former USC assistant football coach Todd McNair’s long-running feud with the NCAA is not over yet, and its latest chapter—a tentative ruling invalidating the NCAA’s show-cause order entered against him eight years ago—could end up being the most impactful.

A brief synopsis of McNair’s years-long battle against the NCAA is appropriate. McNair, a former NFL running back, joined USC’s football staff in 2004; while there, he coached Heisman Trophy-winning running back Reggie Bush. Bush and his family, it was later discovered, accepted benefits disallowed under NCAA rules. McNair became implicated in the scandal when Lloyd Lake, the individual providing benefits to Bush and his family, told NCAA investigators he had spoken with McNair in 2006 about his (Lake’s) potential future representation of Bush. When NCAA investigators asked McNair about the phone call, they incorrectly framed it as having occurred in 2005. McNair denied speaking with Lake and otherwise discussing Bush’s receipt of benefits during his playing career. But the NCAA later charged McNair with unethical conduct for allegedly lying to and misleading its investigators, and was ultimately handed a one-year recruiting ban and one-year show-cause penalty. McNair claimed the Committee on Infractions (COI) was unduly influenced by non-voting members of its committee, which included several NCAA officials, who he alleges presupposed his guilt before the proceedings even began. He sued the NCAA in Los Angeles County Superior Court in 2011 for, among other things, defamation; after a protracted process marred by appeals and other delays, the defamation claim went to trial in April 2018. A jury found for the NCAA.

Still pending, however, is McNair’s claim for declaratory relief, which seeks to undo his show-cause penalty. That sanction “requires a member institution to demonstrate to the satisfaction of the Committee on Infractions why it should not be subject to a penalty or additional penalty for not taking appropriate disciplinary or corrective action with regard to an institutional staff member or representative of the institution’s athletics interests found by the committee as having been involved in a violation of the NCAA constitution and bylaws.” In McNair’s case, the show-cause order, which was in effect from June 2010 to June 2011, prevented him from engaging in recruiting activities on behalf of USC and would have required any school hiring McNair during that window to “show cause” (i.e., appear before an NCAA committee) why the penalty should not also apply to McNair at the new institution. Although schools are not prohibited from hiring coaches with active show-cause orders, the sanction is somewhat of a scarlet letter—it can deter schools from hiring those coaches due to effort required to prove that “appropriate disciplinary or corrective action” is being taken and the attendant possibility the institution will face sanctions if it fails meet that burden. McNair, for his part, has blamed the COI’s findings and its show-cause penalty for his continued inability to re-enter the college coaching ranks.

In late August, the judge presiding over McNair’s case (Frederick Shaller) gave a strong indication of how he would rule on the show-cause matter, issuing an eight-page tentative decision finding the NCAA’s show-cause penalties void under §16600 of California’s Business and Professions Code. §16600 provides that “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

After finding that McNair’s show-cause order “not only restricted, but was intended to restrict, McNair from securing unrestricted employment at any NCAA school” during the term of the sanction and that the penalty was “in essence equivalent to a college coaching career-termination,” Shaller’s tentative decision answered three questions:

1) Does McNair’s claim present a controversy sufficiently ripe to present an actual controversy pursuant to CCP § 1060?

In disposing of this procedural issue, Shaller determined whether McNair’s request for declaratory relief was “ripe” and, if so, “whether the actual controversy merits declaratory relief as necessary and proper[.]” Shaller found in the affirmative, ruling that McNair’s only redress for the “restraint on [his] ability to be employed by another NCAA school” was through declaratory relief. Unless that cause of action is fully adjudicated, Shaller reasoned, the “stigmatizing effect” of the NCAA’s penalties will linger and McNair’s coaching prospects will continue to be hindered.

2) Is declaratory relief necessary and proper under all the circumstances?

Shaller again finds for McNair, mainly on public policy grounds. §16600, Shaller writes, evinces California’s overall objective of reducing restrictions on “employee mobility” and enabling workers to “pursue any lawful employment and enterprise of their choice.” McNair’s show-cause order, which effectively ended his college coaching career and, as Shaller notes, restrained other schools’ right to hire him, was clearly in conflict with §16600’s intent. Shaller again emphasized that declaratory relief is necessary because no other cause of action can remedy the harm done to McNair’s career.

3) Does §16600 apply to McNair?

Shaller, consistent with legislative intent and existing common law, embraces an expansive reading of §16600 to apply its protections to McNair. It is important to note here that McNair and the NCAA were never contractual partners; it is USC and the NCAA that have such a relationship by virtue of the former’s membership in the latter. In opposition to the declaratory relief claim, the NCAA argued that distinction prohibited McNair from seeking relief under §16600. But Shaller found the statute’s use of the term “anyone” extended its scope to third parties like McNair. That interpretation is consistent with the overarching aim of §16600, which is meant to safeguard workers’ economic self-determination from private restrictions. Although no other California court has yet read §16600 to apply to persons like McNair who are not one of the contracting parties, Shaller argues that is no reason not to give §16600 “effect according to its clear wording and legislative purpose.” The show-cause order is especially pernicious under §16600, Shaller reasons, because of the NCAA’s near-monopoly on high-level college athletics—meaning that “restrictive covenants (such as the show-cause order) provide a much greater restriction than a single non-compete agreement between employee and employer[.]”

On these bases, Shaller’s tentative decision declares as void the NCAA’s rules governing show-cause orders. If the ruling stands, it would be one of, if not the first, in the country to challenge the validity of the show-cause penalty. And because the NCAA is likely to appeal, there is the possibility that Shaller’s ruling becomes binding not only in the McNair matter, but in other legal jurisdictions in the state (and possibly the entire state if the case were to reach the California supreme court). If show-cause orders were void throughout California, the downstream effects could be significant: In-state coaches issued a show-cause penalty could seek employment at another in-state school without fear of it hampering their competitiveness as an applicant (though the simple fact of being implicated in NCAA violations would a strong deterrent itself). Similarly, out-of-state coaches with active show-cause orders could seek employment in California to avoid the application of the NCAA’s show-cause provisions. Whether California schools are prepared to flaunt NCAA rules in favor of state law remains to be seen, and it seems likely that some coaches may have to seek legal relief (similar to McNair) to have their show-cause penalty voided. That is especially true if Shaller’s ruling remains binding only in Los Angeles County or some intermediate appellate jurisdiction (as opposed to the whole state). Shaller’s decision could also prompt an analysis of other states’ antitrust statutes and common law to determine whether efforts to undo show-cause orders in other jurisdictions may reach the same result. If so, Shaller’s ruling may have provided a valuable roadmap to other coaches—like former Southern Miss head basketball coach Donnie Tyndall (issued a ten-year show-cause penalty in 2016) or a former San Jose State baseball coach who in early September was hit with a one-year show-cause order—who may wish to undo those sanctions and remove a substantial impediment to their return to college coaching.

For McNair, the impact will likely be far less drastic. His show-cause order expired in June 2011—meaning any NCAA school hiring him past that date would not have been subject to any show-cause requirements. Still, it is not an insignificant victory as the former coach works to clear his name and undo his blackballing within the industry. Regardless of whether he coaches in the collegiate ranks again, Todd McNair’s crusade may have spared future coaches the “scarlet” show-cause order.

Cameron Miller is a 2016 graduate of Stanford University and earned a Master's in Sports Law & Business from Arizona State University in 2017. He is the Sports Lawyers Association's Research Assistant and is a first-year law student at Georgetown University.


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