Robert Sarver, Owner of the Phoenix Suns and Phoenix Mercury, Suspended for One Year and Fined $10 Million for Workplace Misconduct and Organizational Deficiencies

[1]

Robert Sarver, owner of the NBA’s Phoenix Suns and the WNBA’s Phoenix Mercury, has been suspended for one year and fined $10 million by the NBA as a result of an investigation that was commissioned after ESPN published a story in November 2021 detailing allegations of racist, misogynistic, and hostile incidents over his nearly two-decade tenure as owner.[2]

The NBA announced the punishment last Tuesday, stating the investigation found that Sarver “engaged in conduct that clearly violated common workplace standards, as reflected in team and league rules and policies.”[3] “This conduct included the use of racially insensitive language; unequal treatment of female employees; sex-related statements and conduct; and harsh treatment of employees that on occasion constituted bullying.”[4]

The investigation, led by New York-based law firm Wachtell Lipton, included interviews with more than 320 current and former employees as well as Sarver, and examined more than 80,000 documents and other materials, including human resources records, internal emails, text messages, and videos.[5] “While it is difficult to identify with precision what motivated Sarver’s workplace behavior described in this report, certain patterns emerged from witness accounts: Sarver often acted aggressively in an apparent effort to provoke a reaction from his targets; Sarver’s sense of humor was sophomoric and inappropriate for the workplace; and Sarver behaved as though workplace norms and policies did not apply to him,” said Wachtell Lipton.[6]

In particular, the investigation found that during his tenure with the Suns and Mercury, Sarver: (a) “Repeated the N-word when recounting the statements of others” on at least five separate occasions;[7] (b) “Engaged in instances of inequitable conduct toward female employees . . . [and] made inappropriate comments about the physical appearance of female employees and other women;”[8] (c) Engaged in “crude, sexual and vulgar commentary and conduct in the workplace,” including references to sexual acts, condoms and the anatomy, referring to both his own and those of others;[9] (d) Sent a small number of male Suns employees “joking pornographic material and crude emails, including emails containing photos of a nude woman and a video of two people having sex;”[10] (e) “Engaged in inappropriate physical conduct toward male employees” on several occasions, including unnecessarily exposing himself to a male Suns employee during a fitness check, grabbing and dancing “pelvis to pelvis” with another male employee at a holiday party, and standing nude in front of a male employee following a shower;[11] and (f) “Engaged in demeaning and harsh treatment of employees, including by yelling and cursing at them.”[12]

Sarver said in a statement released through the Suns: “While I disagree with some of the particulars of the NBA’s report, I would like to apologize for my words and actions that offended our employees . . . I take full responsibility for what I have done. I am sorry for causing this pain, and these errors in judgment are not consistent with my personal philosophy or my values . . . I accept the consequences of the NBA’s decision. This moment is an opportunity for me to demonstrate a capacity to learn and grow as we continue to build a working culture where every employee feels comfortable and valued.”[13]

The $10 million fine imposed against Sarver is the maximum permitted by the NBA.[14] The NBA will donate the money “to organizations that are committed to addressing race and gender-based issues in and outside the workplace,” just like it did when Dallas Mavericks owner Mark Cuban was fined after an investigation into the Mavericks’ dysfunctional workplace culture.[15]

It’s the second-largest penalty ever levied by the NBA against a team owner, behind Donald Sterling’s $2.5 million fine in 2014, the largest allowable fine at that time, and his forced sale of the Los Angeles Clippers.[16] Unlike Sterling, however, Sarver isn’t being forced to sell his team. While NBA Commissioner Adam Silver said Sarver’s conduct was “indefensible” at a Board of Governors meeting in New York last Wednesday, he added that he “didn’t have the right to take away his team.”[17] A key phrase in the 36-page report produced by Wachtell Lipton said, “the investigation makes no finding that Sarver’s conduct was motivated by racial or gender-based animus.”[18] This is in stark contrast to the Sterling case, where there was clear racial animus evident from his racist comments in a recorded conversation.[19] Due to the lack of conclusive evidence that Sarver acted with animus, the NBA opted not to pursue a larger penalty.[20]

In addition to the $10 million fine, Sarver is suspended for one year, during which time he may not: (a) “Be present at any NBA or WNBA team facility, including any office, arena, or practice facility;” (b) “Attend or participate in any NBA or WNBA event or activity, including games, practices, or business partner activity;” (c) “Represent the Suns or Mercury in any public or private capacity;” (d) “Have any involvement with the business or basketball operations of the Suns or Mercury;” or (e) “Have any involvement in the business, governance, or activities of either the NBA or WNBA, including attending or participating in meetings of either league’s Board (and their associated Board committees).”[21] Additionally, Sarver must also complete a training program focused on respectful and appropriate workplace conduct.[22]

Aside from Sarver’s misconduct, the investigation also substantiated instances of “workplace misconduct engaged in by Suns employees that were not directly related to Sarver and a lack of proper organizational policies and controls.”[23] The investigation found instances of “racial insensitivity, mistreatment of female employees, inappropriate commentary related to sex or sexual orientation, and disrespectful communications.”[24] It also found that the Suns’ human resources department was “historically ineffective and not a trusted resource for employees who were subjected to acts of improper workplace conduct.”[25]

Consequentially, the Suns and Mercury organization must fulfill a series of requirements for workplace improvements set forth and monitored by the NBA, which include: (a) “Retaining an outside firm to evaluate and make recommendations with respect to workplace training programs, policies, and procedures, and hiring and compensation practices — with a focus on fostering a diverse, inclusive, and respectful workplace;” (b) “Conducting regular and anonymous workplace culture surveys and responding to survey results with specific action plans;” (c) “Immediately reporting to the league any instances or allegations of significant misconduct by any employee;” (d) “For a period of three years, providing the league with regular reports related to steps taken by the organization to address these requirements;” and (e) “Following league direction for remediation/improvement of workplace issues if/as they arise.”[26]

The Suns Legacy Partners, the LLC that manages and operates the Suns and Mercury, said in a statement that it is “committed to creating a safe, respectful, and inclusive work environment that is free of discrimination and harassment . . . where everyone feels included and valued.”[27]

NBA Commissioner Adam Silver said in his statement: “The statements and conduct described in the findings of the independent investigation are troubling and disappointing . . . I am hopeful that the NBA community will use this opportunity to reflect on what this great game means to people everywhere and the values of equality, respect, and inclusion that it strives to represent. Regardless of position, power, or intent, we all need to recognize the corrosive and hurtful impact of racially insensitive and demeaning language and behavior. On behalf of the entire NBA, I apologize to all of those impacted by the misconduct outlined in the investigators’ report. We must do better.”[28]

[1] Photograph: https://www.cbssports.com/nba/news/nba-to-investigate-suns-owner-robert-sarver-in-wake-of-reported-claims-of-racism-misogyny-workplace-toxicity/

[2] https://www.espn.com/nba/story/_/id/34584665/phoenix-suns-owner-robert-sarver-suspended-year-fined-10-million-investigation-finds-conduct-clearly-violated-workplace-standards

[3] Id.

[4] https://www.usatoday.com/story/sports/nba/suns/2022/09/13/robert-sarver-phoenix-suns-mercury-owner-conduct-penalty-explained/10368844002/

[5] https://www.espn.com/nba/story/_/id/34584665/phoenix-suns-owner-robert-sarver-suspended-year-fined-10-million-investigation-finds-conduct-clearly-violated-workplace-standards

[6] https://apnews.com/article/phoenix-suns-nba-sports-basketball-mercury-10452a9e19873c53422d07502053f798

[7] https://www.espn.com/nba/story/_/id/34584665/phoenix-suns-owner-robert-sarver-suspended-year-fined-10-million-investigation-finds-conduct-clearly-violated-workplace-standards

[8] Id.

[9] https://apnews.com/article/phoenix-suns-nba-sports-basketball-mercury-10452a9e19873c53422d07502053f798

[10] Id.

[11] Id.

[12] https://www.espn.com/nba/story/_/id/34584665/phoenix-suns-owner-robert-sarver-suspended-year-fined-10-million-investigation-finds-conduct-clearly-violated-workplace-standards