Heather McPhee, the union’s associate general counsel since 2009, accused top executives of illegal retaliation, sex discrimination, and breach of fiduciary duty after being placed.
A senior union attorney filed federal lawsuit Thursday, alleging that executives conspired to prevent her from cooperating with federal investigators examining organizational finances and potential criminal misconduct. Heather McPhee, the union’s associate general counsel since 2009, accused top leadership of illegal retaliation, sex discrimination, breach of fiduciary duty, and misconduct designed to silence her before she became the star witness in a yearlong criminal inquiry.
“McPhee was not the leaker,” the lawsuit stated, defending her character amid organizational attempts to portray her as undermining leadership. “She deserves accountability.”
McPhee filed the 52-page federal complaint Thursday in U.S. District Court in Washington, D.C., seeking at least $10 million in damages for lost earning potential and emotional distress. The lawsuit alleges that placement on paid administrative leave in August represented retaliation designed specifically to prevent her testimony before federal grand jury investigating both the union and the Major League Baseball Players Association regarding organizational finances.
The union issued a statement saying officials were “reviewing the complaint” while declining further comment due to pending litigation. An attorney for former executive director Lloyd Howell Jr. did not immediately respond to requests for comment regarding the allegations.
When internal legal concerns trigger organizational retaliation
McPhee initially raised concerns internally during November 2024 regarding whether senior executive decisions violated labor laws governing conflicts of interest and fiduciary duty obligations. Over subsequent months, she alleged, union leaders systematically targeted her “in order to conceal and deflect their own misconduct and failures.”
Among her primary complaints, McPhee challenged the legality of senior executive incentive plan proposed by OneTeam Partners the $2 billion licensing company jointly owned by both players associations. The plan would have paid millions in bonuses to Howell, Major League Baseball Players Association executive director Tony Clark, and other senior executives.
“Specifically, the grants appeared intended to financially enrich the union’s representatives on OTP’s Board,” the lawsuit stated. “Labor organization representatives are prohibited under federal law from receiving anything of value from ‘an employer’ where influence on their judgment looms.”
McPhee also opposed Howell’s decision to keep from union members an arbitrator’s ruling from January that found evidence NFL commissioner Roger Goodell and several NFL owners had discussed limiting guaranteed quarterback contracts. The union agreed to confidentiality agreements keeping the arbitrator’s decision “from all union members for six months.”
When organizational leadership portrays dissent as disloyalty
As McPhee raised legal concerns, union executives characterized her as not being “on their team,” with Howell allegedly telling the executive committee that McPhee “is a problem and we will deal with it.” General counsel Tom DePaso allegedly sought to undermine her by leaking confidential information to media while portraying her as “too intense and emotional.”
Federal prosecutors sought McPhee’s cooperation last May as grand jury witness to testify about alleged criminal misconduct. After union leaders discovered her agreement to cooperate, Howell and DePaso sidelined her from meetings while prohibiting communication with organizational leadership and players.
Matt Curtin, now Players Inc. president, allegedly bragged to OneTeam personnel that he had “ordered the Code Red” on McPhee language suggesting organized organizational effort to eliminate her from decision-making processes.
When administrative leave appears strategically timed
On August 12, several weeks after Howell resigned following reports regarding union fund spending at strip clubs, interim successor David White placed McPhee on paid administrative leave for alleged workplace behavior complaints. The union alleged she failed following supervisors’ directions, bullied colleagues, and disrupted organizational work environment.
“McPhee’s paid administrative leave appears designed to prevent her from cooperating with DOJ,” the lawsuit stated. McPhee claims the union has never presented detailed allegations against her and characterized the workplace complaints as “pretextual, discriminatory and retaliatory.”
Sources familiar with the criminal investigation said that prosecutors in the Eastern District of New York are examining alleged financial misconduct, misuse of union funds, and retaliatory actions by current and former union and baseball union officials.
When organizational schemes allegedly violate labor law
The complaint alleges that OneTeam Partners executives, including CEO Sean Sansiveri, drafted binding term sheets for incentive plans benefiting themselves while union member-owners remained unaware of the arrangements. The lawsuit claims executives attempted getting around federal labor restrictions by allocating cash to unions for subsequent bonus distribution to executives.
“Executives’ attempt to ‘get around this’ arrangement would likely be a criminal violation of labor laws,” the lawsuit alleged.
OneTeam Partners was founded in 2019 by both players associations alongside private equity firm RedBird Capital Partners to offer players’ licensing rights for video games, trading cards, and related products. Initially valued at $375 million, the company’s valuation zoomed to $2 billion when RedBird Capital sold its shares in 2022 creating substantial financial incentive for organizational leadership to maximize personal compensation opportunities.
McPhee alleges that Sansiveri was functioning as both general counsel of Players Inc. and OneTeam CEO during summer 2023 when he drafted the incentive plan term sheets. The arrangement would have benefited himself, Howell, Curtin, and Clark while union member-owners remained completely unaware that senior executives were structuring compensation schemes without their knowledge or approval.
When external legal review allegedly whitewashes organizational misconduct
McPhee claims the union conducted flawed outside legal inquiry into the bonus plan while executives launched “pressure campaigns to shut down thorough review” that would have exposed potential legal violations. Howell allegedly complained that discussions were “upsetting OneTeam board members and hurting the company’s ability to conduct business.”
Sansiveri repeatedly told organizational executive committee members that McPhee was “making a big deal about nothing,” characterizing her legal concerns as overblown. He told player-leaders that McPhee “might be a genius, but there’s a thin line between genius and crazy” a character assassination designed to undermine her professional credibility and dismiss her legal expertise.
The complaint alleges that the outside legal review inexplicably found no problems with the bonus plan’s legality despite McPhee’s documented concerns regarding potential federal labor law violations. General counsel DePaso “appeared satisfied with the report, and after reviewing it, approved ending the investigation of OneTeam without taking any corrective action,” according to the lawsuit.
When gender-based disparities emerge in organizational accountability
McPhee characterizes her administrative leave as particularly troubling given that union executives failed to discipline male colleagues facing comparable workplace concerns. She alleges that senior male executives who failed filing annual labor disclosures or faced investigation for toxic behavior escaped organizational discipline that was swiftly imposed upon her.
That selective enforcement raises questions regarding whether the administrative leave represented gender-based retaliation against a female executive rather than legitimate organizational concern regarding workplace behavior. The lawsuit positions McPhee as victim of discriminatory enforcement patterns rather than acknowledging legitimate performance concerns affecting male executives similarly situated.
When federal prosecutors examine organizational structure
Multiple sources informed that prosecutors in the Eastern District of New York are examining alleged financial misconduct, misuse of union funds, and retaliatory actions by union officials. The criminal inquiry was triggered by whistleblower complaint filed against Clark alleging self-dealing, misuse of resources, abuse of power, and nepotism.
Sources familiar with the investigation indicated that McPhee has not yet testified before the grand jury or spoken with prosecutors. McPhee apparently intends her civil lawsuit as detailed roadmap to alleged wrongdoing she claims witnessing inside organizational leadership structure a comprehensive documentation of alleged misconduct that could inform prosecutors’ subsequent criminal investigation conclusions.
The accountability framework moving forward
McPhee’s lawyers released statement characterizing the case as revealing “egregious failures by those still at the organization who owe legal and moral duties to thousands of union members.” Her legal action seeks not only financial compensation but organizational accountability for alleged wrongdoing that compromised organizational leadership integrity and fiduciary obligations to union membership.