Liberty University accuses Falwell of conspiracy and breach of contract

When Jerry Falwell Jr. renegotiated his employment contract in 2019 to include generous severance pay, the Liberty University board of directors thought he wanted to insulate himself and the school from backlash over his support for President Donald Trump, according to legal filings. But now the university is suing Falwell, claiming he negotiated the deal to safeguard himself not from political fallout but from a sex and blackmail scandal that he knew was at risk of blowing up.

Falwell left Liberty in August 2020 after he posted a photo showing himself holding a drink with his pants unzipped and an arm around his assistant’s wife. His temporary departure became permanent after a business associate, Giancarlo Granda, said Falwell watched sexual liaisons between his wife and Granda during a yearslong affair. Falwell has acknowledged the affair but said he did not play a part in it. The lawsuit, filed Thursday, seeks more than $20 million in damages to compensate Liberty for the blow Falwell’s actions allegedly dealt to its business and reputation.

The suit claims Falwell misled Liberty’s board and hurt the school’s reputation and enrollment numbers. It charges him with conspiracy, breach of contract, and breach of fiduciary duty—Falwell’s legal responsibility to act in the university’s best interest. It asks for $10 million for breach of fiduciary duty and that much or more for conspiracy.

As evidence that Falwell broke his contractual obligation to tell the school about potentially damaging information, Liberty’s lawsuit submits statements Falwell made to the Washington Examiner, as well as ones that were part of a now-defunct defamation lawsuit. The suit explains at length that Falwell agreed as president to uphold the spiritual foundation and reputation of the school founded by his father, Jerry Falwell Sr., a prominent pastor and conservative activist. The suit says in 2019 Falwell Jr. voted to affirm bylaws that state, “[The President] provides spiritual and worldview leadership to the University in pursuit of excellence.” To support its claim that Falwell failed to meet that standard, the lawsuit includes social media posts, contrasting a photo of Falwell and his wife Becki at a Florida nightclub with students’ behavior requirements. The school forbids students to drink alcohol, and the suit says Becki contacted three members of the board shortly after Falwell’s temporary suspension last fall to alert them that he had been drinking heavily. Even before that, the suit says, “there were concerns that he smelled of alcohol during work interactions.”

The school also accused Falwell of conducting university business on private accounts, refusing to provide login information, and failing to return university-provided devices. It also says he secured his son, Jerry “Trey” Falwell III, a university job with significant pay and minimal oversight. Politico reported on April 14 that Trey has left the school.

Meanwhile, the school has not released an update on its investigation of possible financial self-dealing during Falwell’s tenure. It emailed employees on April 9 telling them not to discuss university matters with Falwell after he implied to Politico that he was still advising the school. A day earlier, Liberty announced his brother Jonathan Falwell will become campus pastor. Jonathan leads Thomas Road Baptist Church, which Falwell Sr. founded. Rev. Jerry Prevo, a politically active former megachurch pastor and former board head, is interim president.

In response to the lawsuit, Falwell told the Associated Press and other outlets, “This lawsuit is full of lies and half-truths, and I assure you that I will defend myself against it with conviction.” University spokesman Scott Lamb said in a text message, “The University’s only word on the subject is the lawsuit itself.”