Ball State University paid former men's basketball coach Ronny Thompson $200,000 Tuesday as part of a settlement released Wednesday.
While the parties agreed to the settlement, according to the agreement they also agreed that each party denies it is liable of any inappropriate or illegal acts.
The settlement stemmed from Thompson's claims that he worked in a racially hostile environment at Ball State. He left in July after the first year of his five-year contract.
According to the settlement, the agreement is in exchange for Ball State and Thompson relinquishing their right to file any claims against each other, or any of their representatives, in court. Also, any charges or complaints that were filed are to be dropped, according to the agreement.
As part of the settlement, Ball State and Thompson agreed to cooperate in all NCAA matters that relate to Thompson's time with the men's basketball program. Thompson has the right to review all of the university's reports to the NCAA before they are sent in, according to the settlement.
According to a previous release from Ball State about an external investigation by judge Myra Selby, she found isolated incidences of racially hostile or insensitive behaviors within the athletics department.
Director of Intercollegiate Athletics Tom Collins and Thompson's lawyer Matthew Keiser both declined comment about the agreement.
The two days before Selby's findings were released on Dec. 19, Ball State and Thompson participated in a mediation session, which led to the settlement, according to the agreement.
The parties agreed in the settlement that their only public comment would be a joint statement that was released with findings from Selby's investigation. Any other comment from Ball State or Thompson would have to be agreed upon in advance in writing, according to the agreement.
Ken Dau-Schmidt, professor of labor and employment law at Indiana University, said settlements like the one between Ball State and Thompson are common when high ranking officials leave companies.
By settling with Thompson now, Dau-Schmidt said, Ball State does not get sued, the dispute does not get drawn out and its image is protected from further damage.
In the settlement Ball State and Thompson agreed to an indemnification, which said the university will defend Thompson against any liabilities, costs or damages if he is made a party or threatened to be made a party in any suit or proceeding arising from his employment at Ball State.
Because of the indemnification, Ball State has to defend Thompson like he is the current coach, Dau-Schmidt said. He said it was no surprise that Keiser wanted an indemnification.
"If they didn't agree to that, now the university has incentive to blame him for everything that went wrong," Dau-Schmidt said.
If a claim is brought against Thompson, Ball State will pay for his legal fees, according to the settlement.
The sides agreed to use their best efforts to avoid any public disparagement of each other, according to the agreement.
There are a couple claims Thompson could have had against Ball State based on the agreement, Dau-Schmidt said.
Thompson could have had a constructive discharge case, Dau-Schmidt said, which means the circumstances at Ball State were so bad Thompson had to resign. With that circumstance, Thompson would have practically been fired, Dau-Schmidt said.
The other possible claim is that Ball State could have fostered a racially hostile environment, Dau-Schmidt said. If so, Thompson could have had claims that his civil liberties were violated, Dau-Schmidt said.
Dau-Schmidt said the agreement did not surprise him and he thought the settlement was a good agreement for Ball State.
Thompson had four years left of his five-year contract, which paid him $182,000 annually. The $200,000 is a good deal for Ball State compared to paying the more than $700,000 that remained on Thompson's deal, Dau-Schmidt said.
"If [Thompson] had a viable claim, it was a good deal for [Ball State] to only lose about one year's salary," Dau-Schmidt said.
Click here to see the final signed agreement between Ronny Thompson and Ball State
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