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February 24, 2010 4:42 PM

Ex-Ropes, Foley Hoag Lawyer Settles With NHLPA In Employment Dispute

Posted by Brian Baxter

Unceremoniously fired by the National Hockey League Players' Association as its executive director in late August, Paul Kelly reached an official settlement with his former employer on Wednesday under which he is to receive $1.5 million in compensation and $200,000 for attorneys' fees, according to the Toronto Star.

A spokesman for the players' union did not immediately respond to a request for comment. Kelly's attorney H. James Hartley, a name partner at Boston boutique Shilepsky O'Connell Hartley Casey Michon Yelen Robb, declined to comment.

The Am Law Daily has learned that Bryan Finlay, the head of the litigation practice at Toronto firm WeirFoulds, advised the NHLPA on the settlement along with litigation partner Caroline Abela. Finlay did not immediately respond to a request for comment.

The NHLPA's dispute with Kelly is hardly its first legal entanglement. In past years the union's labor negotiations with the NHL's lawyers at Proskauer Rose grew so contentious that it split the loyalties of its rank-and-file. The NHLPA hired Kelly, a former federal prosecutor who worked at Ropes & Gray and Foley Hoag before cofounding Boston's Kelly, Libby & Hoopes in 2000, three years ago to right the ship after his predecessor Ted Saskin was fired for reading player e-mails. Kelly's abrupt departure last summer set off another round of legal machinations.

The union retained R. Roy McMurtry, Jr., a former chief justice of Ontario and counsel at Canadian firm Gowling Lafleur Henderson to investigate the circumstances surrounding Kelly's firing. McMurtry released a nine-page legal opinion in September that found the NHLPA was justified in terminating Kelly.

But after issuing the report, McMurtry was criticized for failing to inform the union that he had a potential conflict of interest through his relationship with former NHLPA boss Alan Eagleson. In his time as a federal prosecutor in Boston, Kelly had helped to indict Eagleson on corruption and embezzlement charges that resulted in the former union chief receiving an 18-month prison sentence after entering a guilty plea in 1998.

In the months that followed, the NHLPA went through more legal turmoil. Interim executive director Ian Penny, profiled by sibling publication Corporate Counsel two years ago after he became the union's general counsel, stepped down in October, citing an unmanageable working environment at the union. Also resigning were the NHLPA's outside counsel, led by Paul Cavalluzzo from Toronto firm Cavalluzzo Hayes Shilton McIntyre & Cornish, reportedly because of "undescribed ethical considerations" that arose in the wake of Kelly's firing.

With the loss of its outside lawyers, negotiations between the union and Kelly on a settlement stalled. In November the NHLPA turned to Donald Fehr, an attorney and former longtime head of the Major League Baseball Players Association, to aid the union in its search for a new leader. (One of those reported to be in the running for the NHLPA leadership post is Dewey & LeBoeuf sports and entertainment litigation cochair David Feher.)

It was Fehr who the New York Post reports was on an NHLPA conference call announcing a tentative settlement with Kelly back in January. The settlement, which the Post reports contains a confidentiality clause that prohibits Kelly and union officials from discussing his dismissal, must be approved by a majority vote of player representatives from each of the NHL's 30 teams.

It's not the first time an NLHPA executive director has been paid to go away. The union paid Kelly's predecessor, Saskin (represented by Earl Cherniak of Toronto firm Lerners), $400,000 in a similar settlement in March 2008. It was Kelly who helped broker that deal for the NHLPA.

Fired less than two years into his five-year contract with the union, Kelly is now the executive director of College Hockey, Inc., an organization that handles the business side of the college game for Division I hockey schools in the NCAA. An e-mail to Kelly requesting comment on the settlement was not immediately returned.

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