NBA Turns to Familiar Wachtell Lipton to Investigate Suns Owner Sarver

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In the wake of ESPN’s report that Phoenix Suns owner Robert Sarver used a racial epithet in conversation, routinely made inappropriate remarks about women and oversaw a workplace where employees felt whistleblowing would result in retaliation—claims which Sarver and the Suns fully deny—the NBA has retained the law firm Wachtell, Lipton, Rosen & Katz to investigate.

In the past, similar league-commissioned investigations have been able to delve more deeply into allegations of ownership misconduct, and history could repeat with the NBA’s Suns probe.

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In this case, it’s likely that additional witnesses will speak with the attorneys. ESPN conducted interviews with more than 70 current and former Suns employees. In 2018, attorneys retained by the Dallas Mavericks to probe workplace misconduct held interviews with 215 witnesses, including every current Mavs employee. Cooperation was required as a condition of employment and refusal could have led to termination.

When a journalist calls an employee of an NBA team, the employee has no obligation to speak—just the opposite. There is risk in returning the call, especially if the employee signed a non-disclosure agreement or is obligated to refer media inquiries to the team’s PR department. By gaining access to more witnesses, the NBA is likely to gain a fuller picture.

In addition, witnesses might be more willing to offer details and share electronic evidence when responding to Wachtell Lipton. While neither ESPN nor the law firm is interviewing witnesses under oath, and neither has the ability to compel testimony or documents through subpoenas, Wachtell Lipton has advantages that journalists do not. Under Article 24 of the league constitution, NBA commissioner Adam Silver has sweeping and incontestable powers to investigate and punish team employees for conduct detrimental. Staff of NBA teams must follow employment contracts, workplace policies and league edicts. Staff who seem non-cooperative or untruthful in a league investigation likely won’t remain employed long.

On top of that, the NBA could indemnify witnesses who might violate non-disclosure agreements by cooperating. The NFL, as Sportico reported, did not indemnify witnesses in the Washington Football Team investigation. That has sparked questions about the investigation’s completeness and accuracy. If Wachtell Lipton finds that NDAs are interfering, the NBA could turn to indemnification.

The NBA can also credibly maintain confidentiality, which should facilitate conversations with reticent witnesses. While the NFL has suffered from damaging leaks as part of the Washington Football Team investigation, the NBA has generally eschewed such controversies.

The NBA has retained a law firm with relevant expertise. Under the direction of litigation partner and former federal prosecutor David Anders, Wachtell Lipton probed the Los Angeles Clippers and Atlanta Hawks after their principal owners, Donald Sterling and Bruce Levenson, made racist comments.

Both owners lost their teams, though not by NBA action. Sterling, whom the NBA had permanently banned, saw a judge transfer control of the family trust to Shelly Sterling. Levenson, who in emails worried that black Hawks fans had “scared away” white Hawks fans, sold the team. The NBA also turned to Wachtell Lipton to investigate the Los Angeles Lakers for tampering.

The Suns’ investigation could take months. Not only is Sarver accused of numerous transgressions over many years, but the Suns human resources department allegedly discouraged complaints. The Mavericks investigation, which was similarly multifaceted and involved review of more than 1.6 million emails and other documents, lasted seven months. The Suns investigation could be cut short if Sarver—like Levenson—“voluntarily” sells the franchise. For now, that seems unlikely.

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