National Basketball Players Association executive director Billy Hunter and union general counsel Gary Hall failed to get proper player representative approval for a five-year, $15 million contract extension for Hunter in 2010, Yahoo! Sports has learned.
The possible violation of the NBPA's constitution raises questions about the legitimacy of Hunter's contract and his future as executive director.
In a copy of the NBPA constitution and by-laws, obtained by Yahoo! Sports, Article V, Section I states that "the appointment of an Executive Director, and the terms of his employment contract, must be approved by two-thirds (2/3) of the combined total of all Board of Player Representatives and Executive Committee members."
Hunter signed the contract at an NBPA executive committee meeting on June 23, 2010, at the Wynn Hotel in Las Vegas, but he and Hall, the late union general counsel, never brought the deal to a vote of the 30 team player representatives for approval, multiple sources told Yahoo! Sports.
Three player representatives at the team representative meeting on June 24 told Yahoo! Sports that the issue of Hunter's contract was never brought for a vote – nor its existence ever broached.
Hunter and an NBPA spokesperson did not return phone or text messages Thursday morning.
Hunter's contract extension began on July 1, 2011, the first day the NBA's lockout of the players began. While the NBA's players began to lose salary and benefits in what would become a five-month lockout, the NBPA began paying Hunter on a contract that afforded him a $700,000 annual raise to $3 million a year.
As part of an ongoing probe, the law firm of Paul, Weiss, Rifkind, Wharton and Garrison has investigated the the business practices of the union under Hunter's leadership. The Paul-Weiss report is expected to be released Thursday and explore multiple potential conflicts, including Hunter family nepotism. It is unclear if the probe will include findings on the veracity of Hunter's contract.
At odds with Hunter's business practices, NBPA president Derek Fisher pushed the union's executive committee to undertake the internal probe.
The U.S. Justice Department also has been jointly investigating Hunter and the NBPA's business practices with the Department of Labor. That investigation is ongoing, sources with knowledge of the probe said.
In April, Yahoo! Sports reported on Hunter's attempt to invest several million dollars of union funds into a failing New Jersey bank with business ties to his son.
Ronald Shechtman, the managing partner and chairman for the Pryor Cashman firm's Labor and Employment Group in New York, told Yahoo! Sports that the remainder of Hunter's contract could be in peril.
"They may have grounds to terminate his employment because he has no legal agreement," Shechtman said. "Even if he does have a binding agreement, he may have breached that agreement, and there may be cause to terminate him.
"It's up to the leadership of the union to take whatever action is appropriate."
Hunter and Hall, his top union attorney, longtime friend and colleague, cleared a conference room at the Wynn Hotel before meeting with several members of the executive committee on June 23, 2010, sources told Yahoo! Sports.
In the recorded minutes of that committee meeting made available at a later date, there is no item that includes the finalization of Hunter's new contract, sources with knowledge of the document told Yahoo! Sports. Nevertheless, the executive committee met with Hunter and Hall and finalized the terms of the five-year, $15 million contract extension. The players had no legal representation, sources said.
Two months earlier, on April 22, Hall sent an email to members of the executive committee that included the attachment of Hunter's $2.3 million annual contract that ran through 2011. In the email, Hall reported to executive committee members the apparent comparable salaries of pro sports union leaders, including the late NFLPA director Gene Upshaw and his successor, DeMaurice Smith.
Hall wrote that Upshaw had made "approximately $6.8 million with incentives." Hall also wrote that "[Upshaw's] successor, DeMaurice Smith, has a first contract of three years and makes about 2.8M per year … "
In using those comparative salaries to build a case for escalating Hunter's salary to $3 million annually, Hall did not cite a source for those figures. Hall wrote that Michael Weiner had recently been appointed as executive director of the Major League Baseball Players Association, but did not have a finalized contract.
In labor filings, Smith made $1.6 million in 2010 and $1.38 million in 2011 – far lower than Hall's claims of "about $2.8 million per year."
Hall died on May 16, 2011.
Hunter signed the five-year, $15 million contract one day before a majority of the NBA's team player representatives met at the Wynn Hotel on June 24, 2010. Under normal circumstances, that player rep meeting would have been cause for when Hunter's contract would be voted upon for ratification.
Hunter's contract, according to details obtained by Y! Sports, calls for him to be terminated for cause only in the event of embezzlement, theft or fraud. In the event of a conviction or plea of no contest, upon termination, Hunter is still to be paid his full salary and accrued and unused vacation for the remainder of that contract year.
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