Real Salt Lake’s players and fans are gearing up for the postseason, which begins this Saturday vs. the Portland Timbers. The team’s attorneys are ramping up for a battle all their own against the team’s ousted coach.
Legal filings have shot back and forth in recent days, giving a sense of how this fight may play out and what it might mean for the club.
RSL believes it had the right to fire Mike Petke and is asking the judge to dismiss the former coach’s lawsuit, moving the dispute into arbitration, a process that is not likely to be public.
Petke argues that the team violated its contract with him and he wants the nearly $700,000 remaining on his contract. His legal team is seeking all agreements and communications between the team and 10 of its big sponsors, including Zions Bank, Ford and Maverik.
RSL fired Petke in August after a multi-pronged suspension and hefty fine over his treatment of a referee after a Leagues Cup Match in July. The coach had berated a referee using a Spanish-language homophobic slur.
Petke’s argument is after that incident, he signed an agreement with RSL that stipulated he could return to coaching if he met certain conditions, and the club reneged on that after video surfaced of RSL owner Dell Loy Hansen discussing Petke’s potential firing with fans after a Utah Royals FC game.
The club, however, argues it had every right to fire Petke for what he had done.
Two employment attorneys who reviewed Petke’s initial complaint at the request of The Salt Lake Tribune agreed the dispute will more than likely reach a settlement, but they had different views about how strong an argument Petke is making.
Lauren Scholnick, an employment and labor law attorney at Strindberg & Scholnick, sees the post-incident agreement, dated July 29, as more akin to a formal disciplinary notice that’s added to an employee’s file. If that's how the agreement is interpreted, then the team had the right to fire him, she said.
But Petke could have a point if the courts see that agreement as an extension of his contract. In that case, “maybe he does have an argument that the team acted in bad faith,” Scholnick added.
The agreement from July stated Petke was suspended for two weeks without pay and barred him from any contact with the club. It also mandated him to attend anger management courses with a therapist chosen by RSL, and issue written apologies to MLS Commissioner Don Garber, MLS Executive Vice President of Competition and Player Relations Todd Durbin, and the referees from the Tigres match.
If Petke further violated any portion of RSL’s policy, he would be fired for cause, the agreement says.
Utah employment attorney Spencer Phillips believes Petke has a case — a good one — because of that agreement.
“The claims against Real Salt Lake have real merit and will be taken seriously by the court,” Phillips said. “This is not a frivolous lawsuit by any means.”
Phillips said there appeared to be no grounds for firing Petke because there was no evidence that he violated any terms of that July 29 agreement.
“I also see a strong claim that RSL violated their obligation to treat Mr. Petke fairly or with good faith, which is an implied obligation in any contractual relationship,” he said.
Another point of contention is the request for arbitration. Under Major League Soccer’s constitution, disputes between any MLS employees or teams can be arbitrated by Garber or someone Garber appoints. RSL argues that a provision in Petke’s contract compels him to resolve the matter between him and the club.
Petke’s lawyers believe that is overstating it. They say the contract never explicitly requires arbitration, and instead makes reference to disputes being handled according to Utah laws.
Scholnick said the language simply isn’t explicit enough to merit RSL’s assertion that the dispute end up in arbitration, and that the club is “doing a lot of contortions” to reach that conclusion.
“They could have just as easily written something that said, ‘All disputes under the employment agreement must go to arbitration under the MLS constitution’ and they didn’t do that,” Scholnick said. “So it’s some creative lawyering on the part of Real.”
If it doesn’t get sent to arbitration, Scholnick and Phillips say settlement negotiations, rather than a trial, appear likely.
As Phillips put it, “There’s a lot of security and comfort that comes from resolving a dispute in a way that the parties have control over the terms of that settlement instead of leaving it up to somebody else where you don’t know what that decision is going to be at the end of the day.”
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