In October 2011, the Minnesota Court of Appeals affirmed a $1,000,000.00 jury verdict in favor of assistant coach Jimmy Williams. Coach Williams brought a claim against the University of Minnesota (“University”) and Tubby Smith for negligent misrepresentation, alleging that Smith, University’s men’s basketball coach, offered him a position of assistant coach, but negligently misrepresented that he had authority to hire Coach Williams. A more detailed discussion of the facts can be found here.
The Minnesota Court of Appeals concluded 1) Smith owed Williams a duty of care “during the hiring negotiations;” 2) University was engaged in a proprietary enterprise—collegiate sport; and 3) Williams reasonably relied on Smith representations regarding his authority to hire. The Minnesota Supreme Court reversed the decision of the Minnesota Court of Appeals and held that University and Smith did not owe a duty to Williams. The Minnesota Supreme Court indicated that Williams had successfully negotiated a number of contracts with college and professional basketball programs and was experienced in the hiring practices for college basketball programs. As a result, the Minnesota Supreme Court concluded that when a prospective government employment relationship is negotiated at arm’s length between sophisticated business persons who do not have a professional, fiduciary, or other special legal relationship, the prospective employee is not entitled to protection against negligent misrepresentations by the representative for the prospective government employer.