The Phoenix Suns, while facing several lawsuits from current and former employees, told employees this spring that in order to retain their jobs they needed to sign an agreement limiting their ability to sue the team over workforce matters, multiple team sources told ESPN.
Suns employees were notified via email on May 27 that they'd be receiving a two-part updated version of the team's employee handbook -- Part A and Part B -- with a request to review and agree to the terms within three days, according to documents reviewed by ESPN.
Part A of the handbook constituted 50 pages and covered many of the same topics listed in the 2023 version of the 63-page handbook, including information about the team's commitment to diversity, equity and inclusion; its respect in the workplace policies and other information about employee benefits, arena rules and more.
But a four-page Part B -- "Confidential information, Intellectual Property, and Dispute Resolution Agreement" -- was new, team sources said. The contents were described as contractual obligations, and the document noted that agreeing to them was "a condition of your offer of employment and/or continued employment." Employees were asked to head to an external website to acknowledge their understanding and acceptance of Parts A and B of the handbook.
Under the passage focused on dispute resolution, which followed a passage on confidential information, the document stated that the Suns and employees would "agree all legal disputes and claims identified below shall be determined exclusively by final and binding individual arbitration." It further stated that the provision would last beyond that employee's employment with the company.
The provision covered disputes involving employment discrimination, which is the focus of several lawsuits the team is facing. Such disputes would instead be "submitted exclusively first to confidential mandatory mediation." There were exceptions, including any disputes that would constitute violations of state or federal laws.
Multiple attorneys unaffiliated with the Suns who spoke with ESPN said such agreements are not unusual but potentially problematic.
"They have been, and are becoming, close to industry standard in corporate America," said Patrick Hammon, a San Francisco-based corporate litigator who specializes in employment litigation and arbitration. "What makes this situation more unique is that it appears that these new terms are being imposed upon employees mid-stream. Courts [in Arizona and elsewhere] will almost always require such modifications to be supported by 'consideration' -- meaning the employees need to be getting something, anything, really in exchange for the change to the parties' legal relationship.
"Imagine having a year-long contract with a neighbor to mow your lawn or babysit your kids for $20 an hour; most would agree that it would feel unfair if, half-way through the year, that neighbor just decided on his or her own to increase that rate to $25/hour. To ensure that the party imposing such terms is doing so fairly, and not just taking advantage of the fact that the other side has grown to expect or rely on the other, courts will generally require that both sides get something during the modification. In Arizona, courts generally will not view 'continued employment' as sufficient."
It's unclear how many Suns employees signed the agreement.
One of the law firms suing the Suns over allegations of employee discrimination and retaliation calls the process intimidating and distracting.
"From the beginning, we have said we will hold the Phoenix Suns accountable for discrimination and retaliation. Instead of addressing these issues, the organization is pressuring employees to sign away their rights with only three days' notice or risk losing their jobs," Cortney Walters, a Florida-based attorney representing several ex-Suns employees who are suing the team, told ESPN. "Mandatory arbitration denies people their day in court and hides systemic problems from the public. This latest move is not an isolated decision. It is part of a continuing pattern of silencing employees rather than confronting discrimination. The Suns' actions make clear that protecting their image matters more to them than protecting people."
In a statement to ESPN, Stacey Mitch, the Suns' Senior Vice President of Communications, said: "This policy is standard at most large organizations including Disney, ESPN, and many other NBA teams. This policy does not result in the waiver of claims."
ESPN doesn't require new hires to agree to mandatory arbitration clauses, and there is no such requirement in the Disney Handbook.
The Suns have been sued six times since October 2024. The latest lawsuit, from late August, is from a pair of Suns minority owners who were holdovers from the previous regime under former owner Robert Sarver. The two men are suing the team, alleging that current Suns owner Mat Ishbia has refused access to internal records.
The other five lawsuits were by current or former employees. Some of their allegations include discrimination, retaliation, harassment and wrongful termination.
The Suns have denied the allegations.