Sunday, May 22, 2022

Worker's rights: Sasha Banks and Naomi dustup could result in challenge to WWE's contracts

I haven't posted in a good while, but a recent comment I made on a YouTube video (hat tip, JDfromNY206) about an interesting case involving long-standing misclassification of workers -- the classic independent contractor vs employee situation, debated and legislated long and hard here in California in recent years re: AB5 (see my numerous posts about it here; ironically on the side of certain indy contractors/freelancers, such as gigging musicians, not being forced to be classified as employees), made me take notice of the issue occurring over in Stamford, CT, with World Wrestling Entertainment, a billion-dollar mega company that is a fertile legal test case regarding its bizarre and craven, controlling contracts of its professional wrestlers, er, Superstars, as WWE prefers them to be called. They are athlete-performers that work year-round acting and engaging in challenging physical, often dangerous feats for our entertainment guided by scripted storylines. 

What piqued my interest? Well I'm a lapsed wrestling fan just recently reacquainting myself with the landscape, and these issues related to the walkout of two main roster talents, Mercedes Vernado (ring name owned by WWE, Sasha Banks) and Trinity Fatu (ring name Naomi) are blowing up the Internet. I won't go into detail as to why they walked off (there's plenty to read both on wrestling and mainstream news sites with various perspectives), and what kind of punishment WWE felt it needed to mete out.

Goodness knows I could write a year's worth of posts about WWE's non-traditional approach to hiring and treatment of talent, but quite honestly I've been waiting for the day SOMEONE on the roster with enough clout and a good lawyer would challenge the unbelievable contracts these folks sign as "independent contractors." One has to believe that the company has gone out of its way to keep challenges quashed and the Department of Labor out of its practices. But an investigation is long overdue. ANYHOO...

This is an expansion and condensation of my YouTube and Reddit comments on the matter...


Sure, WWE can discipline Sasha and Naomi for walking out during a show (WWE's version of events here). They can choose to handle the situation as they have -- suspensionremoval of merchdeleting Facebook pages, etc. BUT if they push any of their top talent too far, they can take WWE to court and win on every WWE wrestler contract's state and federal labor law violations -- and that can blow the roof off the industry as a whole.

WWE should be concerned about any challenge to the validity of its contracts in relation to independent contractor status versus employee. It doesn't matter whether wrestlers sign a WWE contract if they are not legally worth the paper they are printed on. WWE has coasted on the fact that there has not been sufficient competition in the industry, and thus wrestlers sign contracts that wouldn't hold water. They violate laws in Connecticut (see below) and other states regarding the definition of what an independent contractor is.

These performers have no control over what they wear, when they travel, how they travel, whether they can take independent bookings outside of WWE, etc. that is the definition of an EMPLOYEE. Not to mention its practice of releasing people under contract yet the same people cannot leave the contract before it's terminated is open to question legally.

Only wrestlers with sufficient clout and money would be able to ride out such a lawsuit, even if they are going to win it -- do Sasha and Naomi have that clout or desire to change the industry to benefit themselves and their peers? Most wrestlers have chosen not to rock the boat. To a degree, All Elite Wrestling (AEW) does treat its wrestlers as independent contractors because they can earn a living taking independent bookings, having their own merch shops, and owning their own twitch accounts etc.

That is also giving wrestlers bargaining power when they choose whether to leave WWE.

I'd like to see the Internet Wrestling Community (IWC) discuss the issue from this perspective in a sane manner, devoid of tribalism. It really is worthwhile because we are at a critical point where even actor and former WWE writer Freddie Prinze, Jr is in the process of creating his own wrestling promotion where he will treat his wrestlers as employees who will be members of the Screen Actors Guild as performers, a union that provides the very benefits that WWE wrestlers do not have and cannot have as long as the company considers them independent contractors.

WWE tries to treat them like independent contractors when it suits them, and treats them like employees when they want to control them. WWE can't have it both ways. 

Why? The documentation is out there.

As I mentioned, Connecticut (the HQ location of WWE/Titan) is one of 20 states that have adopted the ABC test for unemployment insurance eligibility and/or wage and hour protections for employees. So it is relevant if a company is classifying people as independent contractors when they may actually be employees...

"To address the problem of misclassification, more than 20 states have adopted what is known as the ABC test for determining whether an individual is an employee or an independent contractor for purposes of coverage of certain workplace laws. The ABC test got its name from the three, interlocking elements of the test—parts (A), (B), and (C). It establishes a presumption that an individual performing services for an employer is an employee, not an independent contractor, unless the employer can establish three factors:

(A) The work is done without the direction and control of the employer.

(B) The work is performed outside the usual course of the employer’s business.

(C) The work is done by someone who has their own, independent business or trade doing that kind of work."

Source: Misclassification, the ABC test, and employee status -

So, according to Connecticut state law, the WWE is clearly misclassifying the wrestlers that work for them. Factor (A) is the more egregious of the three. The wrestlers are misclassified just on that clause alone. Nearly every aspect of their work is controlled by the WWE. What they wear, how they travel, where they have to be, and the company determines their hours of work. How are they NOT employees?

The implications are huge re: burden on the employer and tax withholding, unemployment benefits, workman's comp, etc.

So yes, the WWE does not want its contracts being challenged in court on that basis.

The E has benefited from these contracts up until a few years ago because they were the only real game in town -- if wrestlers wanted to work and earn a decent living in the industry. WWE tries to eliminate competing, ascendant promotions not just in the name of market "competition," it is to protect its contract practices by squashing any competition challenging that norm.

The IWC should be behind the talent's ability to negotiate fair employment for their services that entertain us, rather than fealty to any promotion for tribal reasoning.

AEW, for example, may pay less, but its talent has the ability to earn more income through independent bookings and side gigs that WWE disallows or takes a cut out of. It and all promotions would be affected by changes wrought by legal scrutiny of WWE's contracts.

I also want to note that these issues are wholly separate from the matter of unionization, which seems to get conflated with the issue for some reason. I doubt the wrestlers themselves would agree to unionize any time soon, though a sale of the company could change that (see at the end). Addressing the question of whether WWE is violating existing labor law practices in its contracts would more profoundly, positively impact talent if challenged.

The benefits and other collateral issues would likely resolve themselves if the WWE would simply offer legal, truly independent contractor status contracts to talent -- or hire them as employees. but it won't do so willingly.

Will Sasha or Naomi challenge the E on this matter? Hard to say.

BTW, if WWE is ever sold, the employee/independent contractor status will be a HUGE issue for the buyer -- it surely will have to comply with state and federal law if that transaction is to go through, and WWE, particularly CEO Nick Khan, who is from the entertainment industry, knows this. For instance, Disney, based in CA, has to comply with state law AB5 -- that specifically defines what an independent contractor and employee are (Source: California's Historic AB5 Gig-Worker Law It will surely have to clean up all active "independent contractor" contracts WWE holds.

What I don't understand is the tribalism of WWE fans. You can enjoy the company's past/present content and still understand how the company has continually strong-armed the talent by attempting to crush its competition to ensure it is a monopoly. If there is no competition, that means wrestlers have zero negotiating power for decent benefits or contract terms. Even worse, its clout has allowed it to repeatedly skirt  labor laws -- how is that beneficial to the wrestlers people are supposed to be fans of? I find it strange.

WWE fans should be happy that there is an AEW (or Impact, NJPW, etc.), and hope for additional independents to thrive -- it means more wrestling of different types to enjoy, and more places of employment for the talent to earn a living. It also forces promotions to put out a better product to woo its audiences. It's a win-win for everyone.


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