May 16 (Bloomberg) -- Former National Basketball Players Association Executive Director Billy Hunter sued the union, its president and his publicist, alleging that they engaged in secret negotiations with team owners to end the 2011 lockout.
Hunter claims the secret talks were aimed at benefiting the participants, the owners and certain players, according to a complaint filed today in California state court in Oakland.
Hunter was fired as the union’s executive director in February, ending a 16-year tenure. Player representatives from 24 of the 30 NBA teams in Houston for All-Star weekend voted unanimously to oust the former federal prosecutor, Derek Fisher, the association president, said at the time.
The lawsuit is the latest in a battle between the union, Fisher and Hunter, who was criticized in an independent review of association business and hiring practices.
Dan Wasserman, a spokesman for the New York-based union, and Jamie Wior, Fisher’s publicist, declined to comment on today’s complaint.
The claims in the 36-page complaint include breach of contract, intentional misrepresentation and defamation.
Hunter said that on Oct. 27, 2011, he was telephoned by one of the highest-paid NBA players and his agent. The player, whose name wasn’t disclosed and who previously supported Hunter’s hardline negotiating stance, told the executive director that a deal had already been cut with owners and that he should just accept it, according to the complaint.
Hunter said that after the call he learned that Fisher and Wior had negotiated in secret with the owners. Fisher denied the allegation, according to the complaint.
Fisher, 38 is a 17-year veteran with five championships on his resume. He has played for the Los Angeles Lakers, Golden State Warriors, Utah Jazz, Dallas Mavericks and, this year, Oklahoma City Thunder, who were eliminated from the playoffs last night.
In 2011, in the midst of labor talks, Fisher was in the second year of a three-year, $10.5 million contract. Given his declining production, Fisher could have rightly assumed that this contract would probably be his last, according to the complaint.
“Fisher faced great pressure to secure a soft landing for himself as his career neared its end,” Hunter said in the complaint. “Fisher knew full well that the key to landing a well-compensated position with the NBA, a team’s front office, or with the NBA’s partners is maintaining good relationships with the NBA and team owners. Fisher had every incentive to ingratiate himself with the NBA and team owners by aligning himself with their interests rather than with the players’ interests.”
The union and the NBA settled the six-month lockout in November 2011, agreeing on a 50-50 split of revenue compared with 57 percent for the players in the previous contract.
The review that preceded Hunter’s firing, which was conducted by the New York law firm Paul Weiss Rifkind Wharton & Garrison, concluded that while Hunter did nothing illegal, he failed to manage conflicts of interest, lacked proper corporate governance and didn’t disclose that his $3 million-a-year contract wasn’t properly ratified.
The review followed Fisher’s public call for an examination of union business, including its hiring practices. Hunter wasn’t permitted to address the player representatives prior to being ousted as head of the union.
The association since 2001 paid $4.8 million to Hunter’s family members and their professional firms, Bloomberg News reported in April, citing public records, a pattern of nepotism that the audit called “unacceptable.” Hunter earlier this year purged family members from the association.
The union’s business practices are being probed by the U.S. Attorney’s Office in Manhattan, the U.S. Department of Labor and the New York State Attorney General.
Joe Lombardo, founder of Prim Capital Corp., which advised the union and employed Hunter’s son, faces federal charges that he obstructed a U.S. grand jury probe of a $3 million fraud scheme.
Lombardo and Carolyn Kaufman, a Prim principal who served as president of the company’s advisory services unit, were charged in a criminal complaint unsealed last month in federal court in Manhattan with obstructing the investigation.
In today’s complaint, Hunter alleged the union breached his employment contract by firing him prior to the end of his term and that he’s suffered “great financial and other harm.”
He seeks compensatory and punitive damages.
Hunter, a former National Football League player, helped negotiate collective bargaining agreements that pushed the average NBA player’s salary to more than $5 million, the highest in U.S. team sports. The union, in debt when Hunter took over, now has $80 million in net assets, according to his rebuttal to the independent review.
Hunter also said in his online rebuttal that he’s contractually owed more than $10 million.
The Paul Weiss report said the union had “no obligation” to accept the document as enforceable.
The case is Hunter v. Fisher, RG13679736, California Superior Court, Alameda County (Oakland).
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