Friday, December 26, 2014

Peter Nowak sues Major League Soccer, players' union for causing his firing

Updated June 17 with further statements from the Major League Soccer Players' Union.

Peter Nowak sues Major League Soccer, players’ union for causing his firing

(Mike Stobe/Getty Images file photo)
(Mike Stobe/Getty Images file photo)

Updated June 17 with further statements from the Major League Soccer Players' Union.

It has been 21 months since a judge ruled that Peter Nowak’s wrongful termination lawsuit against the Philadelphia Union had to be decided in arbitration, not federal court, and dismissed.

Since then, we’ve heard next to nothing about the matter, except for a brief move in September of 2013 to declare the case “closed” for statistical reporting purposes. Once the case went to the arbitrator, it disappeared from public view. In fact, it’s still is not known publicly whether the arbitration has been completed.

Nowak’s determination to have a legal brawl, however, seems to have not gone away.

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One day shy of the two-year anniversary of his firing, Nowak filed suit against Major League Soccer and the MLS Players Union in the U.S. District Court’s Eastern District of Pennsylvania.

Nowak seeks damages “in excess” of $1 million from the two parties on two counts of “tortuous interference,” claiming that his dismissal from PPL Park “was directly caused” by the league and union. He also specifically "demands a trial by jury as to all issues."

The most notable of those issues is Nowak's assertion that during the “discovery process” of the suit, Nowak learned that his firing was “precipitated by an investigation demanded” by the players’ union and conducted by MLS. That investigation, the suit later claims, was related to “a disputed training exercise” which took place in May of 2012.

There are no further details of what the exercise in question was, but a letter given to Nowak in 2012 outlining the causes of his termination mentioned “putting the health and safety of Team players at risk by “requiring injured players to participate in strenuous training activities [and] not allowing players to have water during such activities despite temperatures in excess of 80 degrees.”

That letter was included as an exhibit in Nowak’s suit against the Philadelphia Union, and is included as an exhibit in his suit against MLS and the players’ union.

Elsewhere in the suit, Nowak claims that in a deposition by Union owner Jay Sugarman related to the arbitration process, Sugarman “testified that the decision to fire Piotr Nowak was based on a directive from MLS that Mr. Nowak be terminated as a coach.”

Nowak claims that he was never questioned during the investigation, and did not find out about its existence until after he was fired.

Many of the facts and exhibits in the filing, which you can read in full here, have been reported on in the past. Back in 2012, I wrote about Nowak’s contract and other documents that were submitted as evidence in the suit against the Philadelphia Union.

There are also new claims, though, relating to the specific charges against the league and players’ union.

Here are some excerpts from the filing.

From the section labeled “Background”:

6. On June 13, 2012, The Philadelphia Union announced the firing of the Union's coach and Team Manager, Piotr Nowak.

7. At the time of his firing, Mr. Nowak was under contract with the Philadelphia Union to perform services as the Union's Coach and Team Manager through December 31, 2015.

8. The termination of Piotr Nowak was directly caused by the tortious interference of the Defendants MLS and the Players Union as more fully set forth below.

From the section labeled “Facts”:

10. On or about June 1, 2009, The Philadelphia Union and Mr. Nowak entered into the Manager Employment Agreement ("Original Agreement"), a contract which employed Mr.Nowak as the Team Manager of the Philadelphia Union through December 31, 2012.

[…]

15. On or about December 20,2011, with Mr. Nowak having commendably performed his duties under the Original Agreement, the Club named Mr. Nowak as the Union's "Manager and Executive Vice President of Soccer Operations" and extended Mr. Nowak's contract through December 31, 2015 via a letter extension and amendment ("Extension Agreement").

[…]

16. On or about June 13, 2012, Mr. Nowak was notified verbally that he was being terminated.

17. Also on June 13, 2012, defendants provided Mr. Nowak with written "options" as follows: (1) sign a Separation Agreement and General Release which would deem him terminated as of June 13, 2012, but continue his salary through December 31, 2012 (while depriving him of the salary and benefits to which he was otherwise contractually entitled through December 31, 2015 or (2) if he refused to sign, a letter would be issued indicating that he was being terminated for cause pursuant to Paragraph III (A) of the Original Agreement, in which case, Mr. Nowak would receive no severance.

[…]

19. Defendants notified Plaintiff that if he did not sign the Separation Agreement and General Release by Friday, July 20, 2012, the letter terminating him for cause will be issued.

20. Plaintiff notified the Philadelphia Union that he would not sign the Separation Agreement and General Release, creating a material dispute between the parties.

21. The Philadelphia Union had no good faith basis for their assertion of a "for cause" termination.

22. In addition, even if the Philadelphia Union had grounds for a claim of contractual breach under Paragraph III (A), the Philadelphia Union failed to satisfy the condition precedent to termination of the contract and/or breach the contract by (1) failing to provide Mr. Nowak  with notice of the termination before it actually occurred and/or (2) failing to provide Mr. Nowak with an opportunity to cure the concerns as stated in the "for cause" letter.

23. Subsequent to his termination, Plaintiff brought an action in this court seeking a declaratory judgment regarding his termination, Piotr Nowak v. Pennsylvania Professional Sports, LLC and Keystone Sports & Entertainment LLC, No. 2:12-cv-04165-MAM.

24. Relying on an arbitration clause in the contract, this Court remanded Plaintiffs claims to arbitration however, retained jurisdiction subject to the outcome of the arbitration.

[…]

25. During the discovery phase of Plaintiffs case against the Philadelphia Union, Plaintiff learned that his termination was precipitated by an investigation demanded by the Major League Soccer Players Association* and conducted by the Major League Soccer which resulted in a Report.

26. Although the Report made allegations of and concerning Piotr Nowak, Mr. Nowak was not notified of the investigation, nor was he questioned during the investigation, nor were any of the allegations independently verified. Mr. Nowak did not see the investigation Report until after he was fired and commenced his lawsuit against the Philadelphia Union.

27. During the deposition testimony of Philadelphia Union President and owner, Jay Sugarman related to the arbitration between the Philadelphia Union and Mr. Nowak (the "Arbitration"), Mr. Sugarman testified that the decision to fire Piotr Nowak was based on a directive from MLS that Mr. Nowak be terminated as a coach.

28. During the Arbitration hearing conducted in late May of 2014, the Executive Director of the Players Union testified that an investigation of Piotr Nowak was demanded by the Player's Union in May of 2012 over a disputed training exercise.

29. The Players Union also demanded that Piotr be fired.

From the charge of tortous interference by the players’ union:

33. The Major League Soccer Players Union intended to harm Piotr Nowak by interfering with his contractual relationship between Nowak and the Philadelphia Union Football Club.

34. The action of the Major League Soccer Players Union was not privileged to interfere with the contract between Piotr Nowak and the Philadelphia Union.

35. As a direct and proximate result of the Players Union's intentional acts, Piotr Nowak lost the value of the remaining years on his contact with the Philadelphia Union.

36. As a direct and proximate result of the Player's Union's intentional actions, Piotr Nowak has been ostracized from the Major League Soccer League and deprived of the opportunity to earn a living.

From the charge of tortious interference by Major League Soccer:

39. Major League Soccer intended to harm Piotr Nowak by interfering with the contractual relationship between Mr. Nowak and the Philadelphia Union Soccer Club.

40. The action of Major League Soccer was not privileged to interfere with the contract between Piotr Nowak and the Philadelphia Union.

41. As a direct and proximate result of the intentional acts of MLS, Piotr Nowak lost the value of the remaining years on his contact with the Philadelphia Union.

42. Upon information and belief, Major League Soccer has directed and/or advised other professional soccer clubs not to employ Piotr Nowak, thus also interfering with Mr. Nowak's prospective contractual relations with the Chicago Fire and other MLS soccer teams,

43. As a direct and proximate result of Defendants intentional actions, Piotr Nowak has been ostracized from the Major League Soccer League and deprived of the  opportunity to earn a living.

Nowak’s attorney, as it was at the time of the first suit, is former Pennsylvania Bar Association president Clifford Haines. I reached out to him, MLS, the players’ union and the Philadelphia Union for comment.

MLS deputy commissioner Mark Abbott offered a reaction on the league's behalf in an emailed comment. He did not mince words.

"We view the case as being without merit and frivolous," Abbott wrote. "We are disappointed that Peter has taken this action."

Players union general counsel Jon Newman told me that his organization "is aware of the lawsuit," but has not officially been served with it yet. 

“We will vigorously defend it," he added, "but we need to review it before we have any comment."

A few days later, the players union put out an official statement.

"It is unfortunate and sad that Peter Nowak has chosen to sue the Players Union," union executive director Bob Foose said. "His lawsuit is frivolous, and we will defend ourselves and our members aggressively against his baseless allegations.”

Chicago Fire midfielder (and Chestnut Hill Academy product) Jeff Larentowicz, a member of the union's executive board, also spoke for the players.

"The Players Union is the players’ organization. By suing it, Peter Nowak has essentially sued every player in the league," he said. "When players have concerns with any coach or anyone else from team or league management, we will take necessary action through our union. The idea that by doing so, the Players Union somehow violated the law is ridiculous."

I have yet to hear back from the Philadelphia Union or Nowak's attorney. I will update this post when they respond.

That this news came up on a Friday afternoon makes it quite understandable that some of the parties involved were not immediately available. On top of that, just about everyone in the soccer community is engrossed in the World Cup, and rightly so.

The timing stirs another memory of Nowak's first lawsuit. You may recall that it was filed just as the entire MLS community arrived in Philadelphia for the 2012 MLS All-Star Game, which took place at PPL Park. Though Nowak lost before the judge, he won a considerable share of the spotlight.

Now, as another big soccer event captivates the region, Nowak is stealing a share of the spotlight again. We will see if he manages to win this time.


Here are links to my past stories on Nowak's lawsuit against the Philadelphia Union:

July 24, 2012: Former Philadelphia Union manager Peter Nowak sues team for wrongful termination and unpaid severance money

August 24, 2012: Philadelphia Union move to dismiss lawsuit by former manager Peter Nowak

September 18, 2012: Lawsuit: Peter Nowak 'may have improperly profited from player transactions' as Philadelphia Union manager

September 27, 2012: Peter Nowak's lawsuit against the Philadelphia Union sent to arbitration by federal judge

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