Two weeks after Paul, Weiss, Rifkind, Wharton & Garrison issued a report critical of G. William "Billy" Hunter‘s performance as executive director of the National Basketball Players Association, the players union has placed Hunter on administrative leave.
The decision to sideline Hunter, announced by the New York–based NBPA on Friday through its president Derek Fisher, followed the release of a 469-page Paul Weiss report clearing Hunter of illegal activity but holding him responsible for ethical transgressions that raised questions about how the union conducted business under his leadership.
The U.S. Department of Labor and the U.S. attorney’s office in Manhattan are conducting ongoing criminal and civil investigations into the NBPA’s business and hiring practices under Hunter, who himself is a former federal prosecutor. (The union’s executive committee retained Paul Weiss to conduct an internal investigation in April 2012, according to our previous reports.)
In a press release issued Friday announcing Hunter’s removal from day-to-day management of the NBPA, the union stated that deputy general counsel Ronald Klempner would serve as acting executive director until further notice.
Klempner, a former associate at Weil, Gotshal & Manges, effectively became the NBPA’s top in-house lawyer following the death of the union’s longtime general counsel Gary Hall in May 2011. The Paul Weiss report was also critical of Hall—a longtime friend and adviser to Hunter—for allowing the executive director to send union business to outside firms that employed his children, as well as hiring other relatives to fill in-house jobs.
Bloomberg reported last week that the NBPA had moved to terminate family members hired by Hunter—including daughter-in-law, attorney, and director of special events and partnerships Megan Natsuko Inaba and daughter and director of player benefits and services Robyn Hunter—in the aftermath of the Paul Weiss report.
Arn Tellem, a former Manatt, Phelps & Phillips partner now serving as a high-profile agent for basketball players in his current role as vice-chairman and managing director of team sports at the Wasserman Media Group, also issued a letter last week calling for Hunter to step down from the NBPA as a result of the Paul Weiss probe. (Click here for a copy of Tellem’s letter, courtesy of The New York Times.)
NBA stars such as Andre Iguodala and Deron Williams have already come out publicly in support of the decision by the union’s five-member executive committee to place Hunter on indefinite leave. NBPA president Fisher—whose often contentious relationship with Hunter escalated last year after he tried to hire Patton Boggs for a review of the union’s business practices—has been mentioned as a potential successor to Hunter.
Hunter’s attorney, Newark-based criminal defense lawyer and solo practitioner Thomas Ashley, did not respond to The Am Law Daily‘s request for comment.
But Ashley told CBS Sports last week that the NBPA’s placement of his client on administrative leave was "highly questionable" given that Hunter had not been given the chance to respond to the Paul Weiss report, which found (among other things) that Hunter’s most recent contract extension in 2010 was never officially approved by the union.
Ashley also told CBS that the NBPA constitution and bylaws did not support placing Hunter on leave—a topic CBS has covered before, specifically citing a passage from Exhibit 7 of the Paul Weiss report stating that there is no specific procedure for removing the head of the union.
Hunter had been scheduled to meet with players during the NBA’s annual All-Star Weekend, which is to take place in Houston from February 15–17. That otherwise celebratory event could now serve as the venue for Hunter’s official removal.
In its statement announcing Hunter’s leave of absence, the NBPA also said that it would retain outside counsel in "moving the NBPA forward through All-Star Weekend 2013."
Talia Bargil, an NBPA spokeswoman, did not respond to a request for comment about which firm, if any, the union has hired. Nor did interim union boss Klempner, who Labor Department filings show was paid $244,831 for his services in the period between July 1, 2011 and June 30, 2012. (By comparison, Hunter made nearly $3.2 million during that period; Inaba received $174,500; Robyn Hunter earned $97,928; and the estate of Gary Hall was paid $18,942.)
A profile of Klempner on LinkedIn shows that he was an associate at Weil from 1988 to 1993 before going in-house at the NBPA. Also at Weil during that period: longtime NBPA outside counsel Jeffrey Kessler, who left Weil in 2003 to head the sports litigation practice at Dewey Ballantine, which merged four years later with LeBoeuf, Lamb, Greene & MacRae.
When the ill-fated Dewey & LeBoeuf merger collapsed spectacularly in 2012, Kessler took a 60-lawyer team to Winston & Strawn, where he currently serves as head of the firm’s antitrust practice and coheads its sports law group. A call to Kessler—pictured here with Hunter in happier times—was not returned by the time of this story. The Am Law Daily reported in 2011 that Dewey had received $1.1 million from the NBPA between 2005 and 2010.
The NBPA’s most recent Labor Department filings show that the union paid Dewey more than $1.3 million in the 12 months prior to June 30, 2012. Steptoe, which employs Hunter’s other daughter Alexis Hunter as special counsel, was paid nearly $1.4 million during that period. (Boies, Schiller & Flexner, which the union brought in during the final stages of a labor dispute with league owners in 2011, received $221,167.)
CBS reported Monday that multiple NBA agents want Donald Fehr—an attorney and former leader of the Major League Baseball Players Association who last month helped guide the National Hockey League Players’ Association to a new collective bargaining agreement—to be named the new head of the NBPA.
If Fehr were to take the NBPA reins, history would in some ways be repeating itself. Before the NHLPA installed him in its top post in December 2010, the union first had to settle with its previous executive director.
The NHLPA fired Paul Kelly in August 2009—less than two years after hiring the former federal prosecutor and founding partner of Boston’s Kelly, Libby & Hoopes to lead the union. Five months later, the NHLPA agreed to pay Kelly $1.5 million in compensation and $200,000 in attorneys’ fees to settle a dispute over his dismissal, according to our previous reports. (Jackson Lewis hired Kelly last year.)
It remains to be seen whether or not the NBPA will need to reach a similar settlement with Hunter, 70, who was hired by the union in 1996. The Am Law Daily reported last year on the passing of Simon Gourdine, a well-regarded attorney and civil servant who headed the union for a short time before Hunter.