FTC bans Non Compete Clauses

[Jonathan Michaels]

deadline.com/2024/04/non-compete-ban-ftc-1235893007/

So, this may be rather significant for WWE and AEW, eh?

[tafkaga]

Oh yes.

[Legion]

Employee contracts might be the key word there, given the status of independent contractors that most of the wrestlers have.

Plus, isn't the way releases work that although it feels like people being fired - and for all intent and purposes it is being fired - the way it actually works is being released is actually notice that in 90 days your contract will be ending early.

That isn't the same as the sort of non-compete they are talking about here, is it?

[polarbearpete]

As far as I’m aware, WWE does not technically have non compete clauses, they have 90-day notice periods where they inform you you’re being terminated in 90 days and you’re paid during this period (and could even be booked).

[HMARK Center]

Was just about to comment on this; the wording I've seen is that it applies to "all workers", though I'm sure more details will come out to specify if this covers "independent contractors" or not.

If nothing else, it does open the door for people to challenge the system WWE's had in place where it's basically "here's three months notice we're not going to use you, now sit home and lose out on building hype before your contract runs out."

[dbrussel]

AEW doesn't use them and the WWE Non Compete is not a real one legally, soooo i dont see this changing things.

[polarbearpete]

Apr 23, 2024 15:48:11 GMT -5 HMARK Center said:

Was just about to comment on this; the wording I've seen is that it applies to "all workers", though I'm sure more details will come out to specify if this covers "independent contractors" or not.

If nothing else, it does open the door for people to challenge the system WWE's had in place where it's basically "here's three months notice we're not going to use you, now sit home and lose out on building hype before your contract runs out."

The regulations do apply to “workers” with no differentiating between employees and independent contractors. But yes, this likely would not apply to WWE’s contracts due to it being a notice period and not a non-compete.

This is an example of the language found on a publicly available talent contract (Stephanie’s 2013 talent deal):

“ 11. EARLY TERMINATION

11.1 (a) This Agreement may be terminated by PROMOTER during the Term for any or no reason whatsoever by providing WRESTLER at least ninety (90) advance written notice of said termination. The ninetieth (90th) day shall be defined as the “Termination Date”.

[Soultastic]

Debuts are about to get crazy.

[tafkaga]

Apr 23, 2024 15:57:26 GMT -5 Soultastic said:

Debuts are about to get crazy.

[polarbearpete]

Working through the FTC’s rules and the comments they published in conjunction with the rules, it seems to make clear that the WWE notice period would not be barred:

However, the Commission notes that an agreement whereby the worker is still employed and receiving the same total annual compensation and benefits on a pro rata basis would not be a non-compete clause under the definition, because such an agreement is not a post-employment restriction. Instead, the worker continues to be employed, even though the worker’s job duties or access to colleagues or the workplace may be significantly or entirely curtailed.

[El Cokehead del Knife Fight]

Funtionally the release is being told that you're being fired in 90 days and that you're still under contract. Now I'd love to see someone challenge that because it feels designed to make sure that the release cannot benefit from any immediate goodwill which is shitty but funtionally there hasn't been a no compete since Del Rio sued back in like 2014.

[Dub H]

Apr 23, 2024 15:54:14 GMT -5 dbrussel said:

AEW doesn't use them and the WWE Non Compete is not a real one legally, soooo i dont see this changing things.

Im not a law expert but it could be argued it is.

Im sure WWE will say its not,while it is in practice and it will be taken to court at some point.

[polarbearpete]

Apr 23, 2024 16:20:39 GMT -5 Dub H said:

Apr 23, 2024 15:54:14 GMT -5 dbrussel said:

AEW doesn't use them and the WWE Non Compete is not a real one legally, soooo i dont see this changing things.

Im not a law expert but it could be argued it is.

Im sure WWE will say its not,while it is in practice and it will be taken to court at some point.

I’m an expert and I think the notice period is pretty airtight as written now. Especially in light of the language I quoted above from the FTC, in which they’ve discussed pretty much the same scenario as the WWE’s.

[Oh Cry Me a Screwball]

I doubt this ruling will effect WWE's clauses, not because of the employee/independent contractor deal, but because WWE still pays people for those 90 days, so they essentially aren't fired until the no-compete duration is over.

It may empower some people to try to get work before the clause is over, but I think most people would still take the paid 90 days to recover nagging injuries, brainstorm new ideas, and secure bookings/contracts after the period is over.

["Evil Brood" Jackson Vanik]

If WWE doesn't use non competes, then how was Del Rio able to get out of his in 2014? Presumably they wouldn't have let him out of it if it was legally sound.

[john84]

Apr 23, 2024 16:15:07 GMT -5 tafkaga said:

Apr 23, 2024 15:57:26 GMT -5 Soultastic said:

Debuts are about to get crazy.

Wait a minute! WHAT'S HE DOING HERE? He doesn't work here!

[This Player Hating Mothman]

Apr 23, 2024 17:09:31 GMT -5 "Evil Brood" Jackson Vanik said:

If WWE doesn't use non competes, then how was Del Rio able to get out of his in 2014? Presumably they wouldn't have let him out of it if it was legally sound.

To my understanding, WWE had no-competes in big money contracts that were separate from the 90 day release thing. Apparently Del Rio and Punk were both hit by efforts to keep them away from any wrestling at all for at least a year, and they tried to block out Brock when he first left before he tried to call them on it. When Punk and especially later Del Rio fought back against them, they seem to have backed off, or at least haven't had anyone in a contract so big that it became an issue try to get into somewhere else.

[polarbearpete]

Apr 23, 2024 17:09:31 GMT -5 "Evil Brood" Jackson Vanik said:

If WWE doesn't use non competes, then how was Del Rio able to get out of his in 2014? Presumably they wouldn't have let him out of it if it was legally sound.

The notice periods are legally sound, in my opinion. Del Rio I believe they fired for cause and tried to enforce a one year ban or something similar.

[cjh]

Apr 23, 2024 17:24:35 GMT -5 polarbearpete said:

Apr 23, 2024 17:09:31 GMT -5 "Evil Brood" Jackson Vanik said:

If WWE doesn't use non competes, then how was Del Rio able to get out of his in 2014? Presumably they wouldn't have let him out of it if it was legally sound.

The notice periods are legally sound, in my opinion. Del Rio I believe they fired for cause and tried to enforce a one year ban or something similar.

Exactly.  It was completely different from the normal terms of a WWE release and was not enforceable due to the excessive terms they wanted.

[Alice Syndrome]

Yeah, they've also done stuff like Naomi, Mercedes, and PAC, who I feel they were intentionally making sit out the rest of their contract and those might need separate challenges on them