How are WWE wrestlers Independent Contractors?

[rapidfire187]

So I know this has been brought up a few times in the past, most recently when Scott Levy and a few others tried to sue the WWE. This week, I started taking Employment Law, and one of the first things we're covering is the differences between an Independent Contractor and an Employee. Since companies have to pay more taxes on an Employee, they'll often times try to cheat and call somebody an IC when they're really an employee. The IRS usually cracks down on these situations.

An employee is somebody that is hired to continuously do a job. They are told when to do it and how to do it. They are told what to wear, how to behave, what to say, etc. Basically, an employee is somebody who's boss controls every aspect of the job. If you work at McDonald's, you're not just told to cook hamburgers, you're told exactly how to do it, provided with a uniform, given a set schedule that you have to work, and are given duties other than the main purpose of your job.

An Independent Contractor is somebody that is hired to do a specific job, and that's about it. For instance, if you were to hire somebody to pressure wash your house you would agree on a price and when the work should be done. You MAY have something in the contract that says if the work is done before X date, there will be a $Y bonus for every day that the work is completed early. Or if the work is done after X date, there will be a $Y deduction for every day that it's late. The IC would provide the equipment, and would only do what is in the contract.

To take it even further, FedEx found themselves in a similar situation. They were classifying their drivers as IC's, but they were treating them like employees. Some employees filed a lawsuit and won. You can read about it here. www.pfslaw.com/fedex_class_action%202005.htm

So my question is, how are WWE wrestlers independent contractors? They are told when to work, how to work, what to say, what to do, how to dress, etc. What am I missing here?

[Dub H]

I never even knew they were "independent contractors"


if they were ,there shouldnt be a 90 days clause

[randomranter]

Jan 15, 2010 16:24:05 GMT -5 rapidfire187 said:

So my question is, how are WWE wrestlers independent contractors? They are told when to work, how to work, what to say, what to do, how to dress, etc. What am I missing here?

Simple: Nobody's been able to get past WWE's wall of lawyers. The WWE has a crapton of financial incentive to make sure that this never sees the inside of a courtroom, so any time the subject is brought up, the lawyers either find some loophole to get the case dismissed, or they simply drag the case out until the other side simply doesn't have the money to fight any more.

[H-Fist]

I think the argument begins with the history of the business, in that wrestlers have been independent contractors for the better part of a century. They showed up to wrestle, got an envelope of cash, and drove to the next town. WWE's long-term practice has been to sign wrestlers to contracts giving WWE exclusive rights to their in-ring usage. The IC status also makes it easier for WWE to employ the downside guarantee practice. That is, since they aren't employees, there is no minimum wage/livelihood issue. If they were employees, then WWE would have a hard time giving non-contracted talent tryouts on programming or at non-televised events: there would be employees who would be getting screwed out of appearance fees. As it stands today, a local talent or tryout is simply one IC chosen to perform over another one.

I agree that overall it's a shady way of dealing with the talent, but it does make sense in the world of wrestling.

[nerdinitupagain]

The problem is the WWE has evolved from a point in time when they were bringing in wrestlers as Independent Contractors legit to a point where they now really have employees. However, now it seems to more and more people that they are no longer IC's, but employees.

The only way this will probably ever change is if TNA does become a successful #2 federation, and TNA hires wrestlers as employees and gives the benefits of being an employee over WWE guys. It'd be a huge way to lure some mid-card talent away.

[Urethra Franklin]

Jan 15, 2010 16:36:21 GMT -5 nerdinitupagain said:

The problem is the WWE has evolved from a point in time when they were bringing in wrestlers as Independent Contractors legit to a point where they now really have employees. However, now it seems to more and more people that they are no longer IC's, but employees.

The only way this will probably ever change is if TNA does become a successful #2 federation, and TNA hires wrestlers as employees and gives the benefits of being an employee over WWE guys. It'd be a huge way to lure some mid-card talent away.

That would be the first step towards unionization and I don't think any promotion wants to go down that road.

[Fiddleford H. McGucket]

I'm going to have to jump on the "Semantics and History" bandwagon.

Here's a hrd to follow anecdote to help explain my point:

NC is a Hire/Fire State, meaning that unless there is a BLATANT illegal act on the part of your employer in firing you (Racist etc) then it's all hunky-dory. It makes no sense but its the way things have evolved in my state.

WWE is basically using the same business model as far as Employees/ICs that they've used forever and get away with it simply because they have the legal team to back them up and are the biggest game in town.

So what if you don't like thier business practices and thier labor contracts? They're the "big Time" and they basically are calling the shots on who's the big name and who's not. It's not right in any way, but they've taken what was an IC position, and in indy promotions still may is, and turned it into an employee position, but No one with the tenacity or legal acumen has dared really try to change things.

If anyone wanted to affect REAL change it's gotta be an outside force, if only to limit blacklisting any participents should the case turn sour.

[Big L]

idk!!!!

[CT LFC Fan]

Simple version: Most athletes in team sports are considered employees.
Most athletes in individual sports where they are free to determine their own style of play are independent contractors.

Long version:
www.edd.ca.gov/UIBDG/Total_and_Partial_Unemployment_TPU_4154.htm

[Dave at the Movies]

WWE's people are totally employees. The fact that WWE has been able to get away with calling them ICs for this long is incredible. I'm guessing they have some deal worked out with the government because there is no way most companies would be able to get away with it.

[stjames]

What would happen if John Cena told Vince at his next contract talks that he wanted to be a wwe employee and enjoy all the stuff that would entail? Would Vince let him walk?

[HMARK Center]

Jan 15, 2010 19:02:16 GMT -5 stjames said:

What would happen if John Cena told Vince at his next contract talks that he wanted to be a wwe employee and enjoy all the stuff that would entail? Would Vince let him walk?

Vince would offer him an office job or behind the scenes position; every one of those folks in the WWE is considered an "employee", it's only the performing talent that get the "independent contractor" label. If Cena did both, he could be considered an employee, and Vince would have given it to him in a way that wouldn't get other wrestlers to follow suit, since only the absolute tip-top guys could get jobs like that.

This all goes back into the history of the business; wrestlers truly used to live like independent contractors, and were done business with as such. When the business changed and they were treated more like employees, most guys still didn't want to challenge things; bringing a case to court meant breaking kayfabe, which was the biggest no-no of all for years and years.

So even though kayfabe is dead and gone, it's going to take a long time to overcome almost a century of history leading up to this point, and now WWE is so big, so powerful, and so rich that no wrestler or group of wrestlers, unless it included most of the main eventers, could hope to break through.

Of course, the main eventers won't go for it, since it would likely hurt their bottom line.

[wwefan78]

If WWE wrestlers are IC and not employees, how come they can't work for other promotions or pretty much make any media apperances without Vince saying it's ok. Isn't there a limit for the lenght of an exclusive contract between employer and IC before the lather must be deemed as a employee? FE If you sign someone to a 3-year deal that says he can't appear anywhere else publicly without permission, is he or she by definiton still a indepent contractor? As a european I find american law kinda confusing at times..Someone please elaborate!

[kropotkin]

History aside, there is a bigger issue here for the modern era. The reason why the WWE has fought tooth and nail to keep their wrestlers as ICs versus employees is because of the union issue. There have been a number of high profile names over the years that tried to get some traction with a wrestler's union (Foley and Jesse Ventura come to mind as the most well known) but they were shut down rather quickly, and rather violently at that.

It's hard enough for most employees now a days to unionize, nevermind those unfortunate enough to find themselves categorized as ICs. What the WWE has done is create a sort of fail-safe mechanism. Even if their workers were able to get together and create enough consensus to form a union, the company has these legalistic framework they would have to tackle before they could ever get around to the actual process of unionizing--which is itself usually made incredibly difficult by employers.

This is, of course, part of a wide phenomenon today in the corporate world, and likewise, has a long history. There's a reason why, for instance, in a factory where there are really only, say, four kinds of jobs, employers create 27 different "positions" and "job descriptions." It's an effort to make it more difficult for employees to organize.

It's bad enough that in wrestling, to a certain extent, you have this hierarchy of where your "spot" on the card is but on top of that the WWE (and others) have made it so that your supposedly a ICs. This despite the fact as the OP rightly pointed out they control every aspect of your life, or just about, inside and outside of the ring.

[moonlight]

I worked for a creep for 9 years, and he had me working as an independent contractor. He would tell me what to do and when to do it, until I told him I'd turn him in to the IRS.

[Jay Peas 42]

Industry Standards, and the business structure of a wrestling promotion. Wrestlers are okay with it, because Vince being a control freak makes them a lot of money.

Re: American Labor Law: The IRS provides a list; www.irs.gov/businesses/small/article/0,,id=99921,00.html

Keep in mind, the IRS is in the business of tax collection, not labor law. It's primary interest, is tax witholdings and FICA (SSA) Employer tax, not the rights of the workers. As long as The WWE meets the objective requirements for IC status, and show this is an industry standred, and show that Vince isn't primarily doing this to avoid paying taxes, the IRS will accept their logic.

[SAJ Forth]

It is a truely messed up situation.

[Dave at the Movies]

Jan 15, 2010 23:17:33 GMT -5 Jay Peas 42 said:

Industry Standards, and the business structure of a wrestling promotion. Wrestlers are okay with it, because Vince being a control freak makes them a lot of money.

Re: American Labor Law: The IRS provides a list; www.irs.gov/businesses/small/article/0,,id=99921,00.html

Keep in mind, the IRS is in the business of tax collection, not labor law. It's primary interest, is tax witholdings and FICA (SSA) Employer tax, not the rights of the workers. As long as The WWE meets the objective requirements for IC status, and show this is an industry standred, and show that Vince isn't primarily doing this to avoid paying taxes, the IRS will accept their logic.

So basically like I said earlier they worked a deal out with the government. ;D

Actually I have no idea why the government doesn't get involved. How WWE meets the requirements to call their employees ICs has to be a huge mystery. I just don't see how they could do it.

I'm sure the government doesn't care at all. They only go after wrestling if it hurts the business and the guys in it.(steroids)

[rapidfire187]

Jan 15, 2010 16:30:40 GMT -5 randomranter said:

Simple: Nobody's been able to get past WWE's wall of lawyers. The WWE has a crapton of financial incentive to make sure that this never sees the inside of a courtroom, so any time the subject is brought up, the lawyers either find some loophole to get the case dismissed, or they simply drag the case out until the other side simply doesn't have the money to fight any more.

I'm sure the IRS has better lawyers than the WWE, which is what makes the thing baffling to me. It's not that the wrestlers haven't been able to sue, it's that the IRS hasn't cracked down on them yet.

Jan 15, 2010 16:57:58 GMT -5 Fiddleford H. McGucket said:

I'm going to have to jump on the "Semantics and History" bandwagon.

Here's a hrd to follow anecdote to help explain my point:

NC is a Hire/Fire State, meaning that unless there is a BLATANT illegal act on the part of your employer in firing you (Racist etc) then it's all hunky-dory. It makes no sense but its the way things have evolved in my state.

WWE is basically using the same business model as far as Employees/ICs that they've used forever and get away with it simply because they have the legal team to back them up and are the biggest game in town.

So what if you don't like thier business practices and thier labor contracts? They're the "big Time" and they basically are calling the shots on who's the big name and who's not. It's not right in any way, but they've taken what was an IC position, and in indy promotions still may is, and turned it into an employee position, but No one with the tenacity or legal acumen has dared really try to change things.

If anyone wanted to affect REAL change it's gotta be an outside force, if only to limit blacklisting any participents should the case turn sour.

Fire at will states are not too uncommon, it's like that where I live too. I don't see the connection, but I get what you're saying in the rest of the post. Thing is, again...it's the freakin' IRS that should be concerned more than anybody. Those wrestlers make a buttload of money, and the IRS would more than likely get more cash if WWE payed the taxes rather than having the wrestlers do it on their own.

[The Deadly Snake]

Now, I can see any non-WWE and non-TNA workers being considered as Independent Contractors, but for it's hard to say the same for the WWE.

As to why nothing has been done, someone actually sue the WWE in the first place. And then have to make sure they have money to make sure they have lawyers to make a case in court.

WWE has a pretty weak case, if you ask me, but no one has the willpower or the money to oppose their practice.