Dallas Mavericks owner Mark Cuban (Photo: Diego M. Radzinschi/ALM) Dallas Mavericks owner Mark Cuban (Photo: Diego M. Radzinschi/ALM)

General counsel may want to take a page out of this playbook: It's the report released this week after a seven-month investigation into sexual misconduct at the Dallas Mavericks organization.The 43-page report could hold important lessons for GCs, along with at least one key piece of advice for company owners—hire a general counsel. The Mavericks finally did.

The report did not accuse Mark Cuban, the National Basketball Association team's owner, of wrongdoing. But it did cite Cuban's “significant errors in judgment” and “institutional failures.” (When he's not running a pro team, Cuban can be seen as one of the self-made tycoons on ABC's “Shark Tank.”)

During an interview Wednesday on ESPN, Cuban apologized to the women who had been victimized during his 18-year tenure. The owner also agreed to contribute $10 million to organizations committed to supporting the leadership and development of women and combating domestic violence.

The Mavericks began the probe after Sports Illustrated first reported the allegations in an exclusive story in February. It was conducted by former New Jersey Attorney General Anne Milgram, now a special counsel with Lowenstein Sandler; along with former New York City prosecutor Evan Krutoy, a senior counsel at New York's Nesenoff & Miltenberg as well as a solo practitioner at Krutoy Law. The NBA's oversight was led by David Anders, a partner at Wachtell, Lipton, Rosen & Katz and a former assistant U.S. Attorney for the Southern District of New York.

Among other misconduct, the independent investigation found:

  • Improper workplace conduct toward 15 female employees by the Mavericks' former president and CEO, Terdema Ussery, including inappropriate comments, touching and forcible kissing. Ussery previously has denied the allegations.
  • A former Mavericks ticket sales employee made inappropriate sexual comments to women, viewed pornographic images and videos and made unwanted sexual advances.
  • A former Mavs.com reporter committed two acts of domestic violence, including one against a team employee.
  • Mavericks' management was ineffective, including a lack of compliance and internal controls.

The Mavericks set up a website tagged “Rebound” that contains links to the full report, a statement from the NBA and a press conference detailing the cultural transformation underway at the organization.

The team has already adopted most of the report's 13 recommendations, including hiring a new CEO, naming its first full-time general counsel and creating a chief of compliance job. In March, the team named Cynthia Wales as chief ethics and compliance officer, a newly created position. In July, it named Sekou Lewis, a former pro basketball player and coach who was a seven-year associate at Schnader Harrison Segal & Lewis in Philadelphia, to the general counsel role.

As the Mavericks continue their reforms, other general counsel may want to study the report's recommendations as well to see what might apply at their own companies.

Los Angeles-based workplace attorney Carney Shegerian, the founder of Shegerian & Associates, told Corporate Counsel that Cuban's response to the crisis could be a model for other employers.

“Unfortunately many internal investigations are nowhere near as thorough or effective in actually affecting action by the employer,” Shegerian said, “let alone an apology by the employer's owner.”

Shegerian said the Mavericks' problems showed that employers need to treat all employee complaints with urgency and respond to them, “no matter how benign they may seem.”

He added, “This episode illustrates the reality that upper management and leadership are pivotal in dictating the work environment, including in the prevalence of disparate treatment and harassment.”

Davida Perry, co-founder and managing partner of the boutique employment law firm Schwartz Perry & Heller, said the Mavericks' problems illustrated that human resources personnel need to be fully trained to handle discrimination complaints. The report said the Mavericks employees weren't well trained. Perry also recommended that C-suite executives and the company owner be present for some or all of a company's sexual harassment/anti-discrimination training sessions.

When it comes to sexual harassment and discrimination, “C-suite executives and owners should not adopt a hands-off policy and allow others to represent them,” Perry said, which is what the report indicated Cuban did.

In a memo Friday to all NBA teams, Commissioner Adam Silver said he wanted all teams to hire more women, especially in leadership and supervisory positions. Silver also urged them to take some of the mandates that the Dallas Mavericks have adopted as an impetus to improve working conditions within their own organizations. The Associated Press, which obtained a copy of the memo, said he stopped short of ordering the teams to adopt new hiring and sexual harassment policies.

Read more:

Lowenstein Sandler Among Firms Hired for Mavs Probe of Ex-Big Law Associate

This story has been updated to include information about Silver's memo to NBA teams. The story has also been corrected to show that Lewis had been an associate at Schnader for seven years, not five.