The National Basketball Players Association announced Friday that embattled union chief Billy Hunter has been placed on indefinite leave of absence.
Longtime union lawyer Ron Klempner was appointed acting executive director of the union until every member of the union "can have a vote in the matter," the NBPA said.
Hunter was notified of the decision Friday morning, sources said.
"This organization has been disrupted and we will no longer tolerate it. Immediate action was necessary and taken to protect you," union president Derek Fisher said in a memo circulated to players Friday.
Hunter's attorney responded that the actions weren't allowable under NBPA rules, setting up the possibility of a Hunter fight to keep his job.
The NBPA announced that it has formed an interim executive committee and advisory committee "to move the organization forward" in the wake of a damaging report by the independent firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP, which was hired to look into the union's business practices under Hunter's leadership. The interim executive committee will consist of the five active members of the most recent executive board, according to union bylaws.
The report last month found no evidence of illegal use of union funds, but revealed that Hunter withheld knowledge that his contract was never properly approved, used poor judgment with his hiring practices and spent improperly on travel and gifts.
The NBPA also will hire outside lawyers to assist it leading into a pivotal set of meetings scheduled for All-Star Weekend in Houston later this month and will consider moving meetings to a different date on the calendar to "ensure that all players will have the best chance to attend without conflict."
Hunter's attorney, Thomas Ashley, said his client had been treated unfairly and already had taken steps to improve the union.
"I am deeply troubled by the lack of fundamental fairness shown my client by a group whose authority to take such action is highly questionable. The act of placing my client on administrative leave is not supported in either the constitution or bylaws of the NBPA," Ashley said. "Furthermore, Mr. Hunter was not given any opportunity to respond to the Paul, Weiss report prior to the time that a decision was made to place him on administrative leave."
Hunter has headed the union since 1996. The review was sought in part by Fisher, who clashed with Hunter during and after the NBA lockout that lasted from July 2011 to November 2011.
Agents were angry with Hunter's strategies, though he has remained popular and respected by many players.
Because Hunter's contract -- worth $3 million a year, signed in 2010 and was to run through either 2015 or 2017 -- was never properly approved, the report found that players were under no obligation to keep him.
According to the report, Hunter was aware by at least November 2011 that the executive committee and player representatives had not approved the deal according to union bylaws.
In a statement released Friday, Fisher said that because of the ongoing investigations being conducted by the U.S. Department of Labor and the U.S. attorney's office, players wanted the executive committee to take steps to protect them.
"Unfortunately, it appears that union management has lost sight of the NBPA's only task, to serve the best interests of their membership. This is the reason I called for a review almost a year ago," Fisher said. "The findings of that review confirm this unfortunate truth and we must now move forward as players. Immediate change is necessary and I, along with the committee members, are committed to driving the process as difficult as it may be."
The report cited areas where Hunter should have known better, particularly when it came to hiring family members.
The union either employed or worked with many people who had ties to Hunter, who hired his daughter and nephew, permitted a daughter-in-law to remain on staff, and spent more than $80,000 of union funds to evaluate an investment in a banking firm that employed his son.
"No matter the explanation, when viewed collectively, his choices created the appearance that he operated the union in part for the benefit of his family and friends," the report said.
"The appearance of favoritism has damaged the union. Mr. Hunter's pattern of involving friends and family in union business contributed to a deep rift among the NBPA staff."
Hunter fired his daughter and daughter-in-law less than two weeks after the report came out.
The report also found that Hunter spent more than $100,000 of union funds to purchase gifts for executive committee members, including a $22,000 watch for Fisher in June 2010, and that he made "questionable choices" when charging travel expenses to the NBPA.
The investigation began in April 2012 and included reviews of documents, financial records and NBPA emails, along with interviews of more than three dozen witnesses. It questioned a payment he received for unused vacation time and the way he filed travel expenses, but couldn't prove they were illegal.
Information from The Associated Press was used in this report.