The Hamilton Ave Journal 09.06.08: Volume 1 – Issue 50

And where is Hamilton Ave? That is the location of the WWE Production Studio in Stamford, CT, and thus the most powerful place in the wrestling world. Besides, The East Main Street Journal just does not have the right ring to it.

Who am I? I am JP Prag: consultant, entrepreneur, businessman, journalist, and wrestling fan.

Now, ring the bell because the market is open.

LEAD STORY: A continual look at Raven’s Employee Flock

For several weeks, the Journal has been covering in great detail any and all information about Scot Levy, et al’s lawsuit against the WWE in order to gain employee status. For further detail on this case, please see Issue #47 and Issue #49.

As expected, the release of legal documents thank to the Sun UK has let to a variety of additional notes, concerns, and comments. Given the large amount of feedback, the Journal has decided to dedicate time in the Lead Story to address several points brought up by the readers. Crimefighter began the cycle with this point:

Hey you forgot these important details –

The WWE tells the wrestlers where they can and can’t go during their off-time — see Robbie McAllister.

Those were not specific examples brought up in the legal documents which is why they were not mentioned, but you can believe that they will be brought up in court. Independent contractors decide where and when they work, as well as how the dress and where they go when they are not at a client site. Having control of a person’s time even when they are not working for you can be constituted as employee control.

On the other hand, the WWE may argue that travelling is work time for them and that the plane is a client site. When a wrestler is on a plane, they are “performing” in that respect. Also, in Robbie McAllister’s case, the WWE can plainly show that the entire town of Orlando was their client site for the weekend and that a competitor gained an advantage with their intellectual property represented in Mr. McAllister.

Guest#8221, though, chose to focus in one particular aspect:

So WWE is being sued because they do drug testing (among other things)? It seems like WWE can never do anything right. Everyone has a problem with the WWE for whatever reason, from the government to smarks to disgruntled ex-employees who never got over in the WWE, wrestled and lived dangerously and now in the twilight of his career he needs some pocket money. Whether WWE’s wrestlers should be considered independent contractors or employees means nothing if the wrestlers don’t realize that they need to change their lifestyles. It’s sad to hear so many wrestlers dying young with hardly any money in their bank accounts or wrestlers that have to resort to public fundraisers to help cover the cost of medical procedures.

The point of the lawsuit is not to say that wrestlers should not submit to drug screening. The point is to say that if they are they should be classified as employees and, as such, should receive all of the benefits of being an employee. This suit is not one to make wrestlers be independent contractors and take away what the WWE is doing to/for them, but to make them employees and let the WWE do whatever they want. The WWE is doing whatever it wants anyway, so the lawsuit contends that these people should receive all benefits of being a full time employee. You have good points, and it is most likely these men do need money. Scott Levy is an admitted recovering drug abuser with health and money issues, but Brett responded to your thoughts:

While I do think that Raven, Kanyon, and Sanders are doing this for a monetary gain, I don’t think its because they don’t have enough money. If they didn’t have enough money I doubt they’d be willing to put forth the money that its going to take to pay for this case which will probably last years. They are also probably doing this for the wrestlers that can’t or won’t do it.

That is the important part in this: time. This case will take years, and all three men and their lawyer need to subsist for years to come. They will continue to wrestle or do whatever other work they do now, but they will know they will not be working for the WWE (and most likely not TNA or ROH either) anytime in the future. Raven and Kanyon have often made comments about wanting to change the industry and it looks like this time they are trying to actually do something instead of just talking about it.

Guest#1081 also responded to the issues of drug testing:

Yes. If someone is an independent contractor, they have no boss. Imagine hiring a painter to paint your house, and then telling him he needs to take a drug test first.

You can’t do that. They do. That is why this lawsuit exists. The WWE does numerous things only employees have to suffer through (mainly control).

There is a bit of a misnomer here, though. This reporter has been hired as an independent contractor before and has had to take a drug test and pass a background check before being allowed to begin work for the client. That said, those were one-time items before the work officially began and never came up again (until contract renewal time). The WWE has taken people already under contract and submitted them to random drug testing that is now watched over by someone. Those were not terms the independent contractor agreed to and yet the WWE enforces it. Because of this, it would seem the WWE has taken on an employer role instead of a contract-owner role.

Now, the issue exists out there that wrestlers have jobs similar to other independent contractors. Arnab brings up the point:

What I think though is that the same arguments as the Raven lawsuit can be given by all the TV actors also, and they can also ask for employment, as also the Hollywood actors, specially those who get a 3 film or 5 film deal with a particular actor.

Here is the difference: actors, writers, and the like all belong to the Screen Actors Guild or another similar union. The union negotiates on its members’ behalf and the members have the rights to choose what projects they work for. So, although Robert Downey Jr. may sign a five picture deal, he does not have to work them. The terms have been agreed to on what he’d be paid should they happen, but he can delay them if he chooses. At the end of the day, the studio has “schedules” and times and places they expect the actor to be, but those are terms agreed between them. The studio does not withhold their taxes and does not maintain 100% control over the intellectual property (see: residuals). Meanwhile, even while working on Iron Man, Mr. Downey can negotiate another film deal with a different studio. It is up to him to complete the work when he is able to.

There are consequences for not fulfilling the contract, but those are contractual clauses. Should. Mr. Downey walk out during the filming of the second movie, the studio would have the right to sue him for irreparable damages and the breaking of contract terms. But that would be a civil case that would be resolved in state courts. Still, you cannot force someone to work as that goes against the Thirteenth Amendment.

But when comparing closer to the WWE, one would have to look no farther than sports teams. Last week, the Journal presented Just Adam‘s point:

How is what the WWE is doing for their contracted talent different from players contracted to the NFL, MLB, etc? Most (all?) of what you described seems to apply to these leagues as well, specifically how the athletes get paid while injured and the risk of “losing their spot”. The behavioral category that was given is practically identical to the WWE and professional sport leagues (ongoing evaluations, preseason training, more detailed degree of instructions). If the big “real” sports leagues can get away with similar tactics, what makes you think things will change for the WWE?

BLUEDAY takes the first crack at a response:

Here is the difference. Those leagues have full health benefits, a pension, and have their taxes removed from their pay, the team charters flights for the team and don’t have to pay for travel, even minor league players receive “meal money” daily. None of those are in The WWE. So, yeah they are nothing alike at all.

Not only that the lawsuit is ASKING that they be treated as those athletes.

Of course, what BLUEDAY comes short of saying is that those who work for the NFL, NBA, MLB, and other professional leagues are, in actuality, “employees” of the team. Although they have contracts, they are contracted employees which is perfectly legal in the current IRS system.

In order to confirm this point, the Journal contacted sports historian and writer Jason Clinkscales, purveyor of A Sports Scribe, independent contractor for the The New York Beacon, on air sport talk personality for WHCR, among many other credits. Mr. Clinkscales assured the Journal that players in the NFL, NBA, MLB, and other organization are employees of their respective teams and have been for decades—although the time differentials between the leagues is great.

The only professional sports that he said they were not employees were the PGA and tennis. Since in both of those sports the athletes decide into which tournaments they will enroll (hence when and if they will work), they remain independent contractors.

And much like SAG, the players associations of these leagues act as bargaining agents for the employees. In the pre-amble of the NFL Players agreement with wit the NFL it states:

This Agreement, which is the product of bona fide, arm’s length collective bargaining, is made and entered into as of the 8th day of March, 2006, in accordance with the provisions of the National Labor Relations Act, as amended, by and between the National Football League Management Council (“Management Council” or “NFLMC”), which is recognized as the sole and exclusive bargaining representative of present and future employer member Clubs of the National Football League (“NFL” or “League”), and the National Football League Players Association (“NFLPA”), which is recognized as the sole and exclusive bargaining representative of present and future employee players in the NFL in a bargaining unit described as follows:

4. All undrafted rookie players once they commence negotiation with an NFL Club concerning employment as a player.

The key word is “employed”, not “contracted”. In a contract like this, one can imagine that lawyers have carefully monitored every single word. They would not allow the word “employee” if they did not mean “employee”.

So yes, while Just Adam wrote the Journal many instances showing where the NFL was like the WWE, the bottom line is all of his points are moot because NFL players are employees. At the end of the day, all the notes made about the similarities between the two actually make the point that WWE wrestlers should be employees.

The one open item is that the wrestlers knowingly and willingly signed contracts that said they were “independent contractors”. Legal Eagle ties this one up:

Don’t forget that both Microsoft and FedEx tried the “They sign contracts saying they are independent contractors” defense, and both were struck down.

Absolutely true, and it happened again recently in the NFL (who had not learned their lesson) with their drug testers. They signed them as independent contractors and the IRS rules they were employees. Just because it is in a contract does not mean it is legal and/or binding.

Again, this is not going to happen overnight, but the WWE will have a tough time presenting a defense with so much precedent out there. As always, the Journal will monitor this case closely and appreciates all of the editorials around it.

Other Lawsuit Updates

Aside from the Scot Levy, et al, vs. the WWE lawsuit, there are two other major wrestling related lawsuits that had updates this week. First up, the discovery phase ended in Konnan’s case against TNA and has already led to an early judgment. Although there are many issues at stake with Konnan, the copyright infringement portion has been dismissed “with prejudice”. That means that Konnan never had rights to LAX and the intellectual properties he created while with TNA do, in fact, belong to TNA. The “with prejudice” portion means that Konnan does not have the right to file another suit with a similar claim. In other words, Konnan had to grounds to make the claim and will have no basis to make such a claim in the future.

The rest of charges remain open and will most likely go to court in October unless a settlement is reached beforehand. The courts have been trying to push both parties to a settlement, but at last check Konnan was looking for $3 million in damages.

Meanwhile, THQ/JAKKS Pacific sent out a follow-up press release to their announcement last week that almost all of the WWE’s charges against them have been dismissed. A number of charges were dismissed due to the statute of limitations on the claims. The rest of the charges were dropped at the state level because the WWE suffered no anti-trust losses and the federal courts had already decided the charges were not applicable. The federal charges were then dropped because the state ones were, so JAKKS remained successful in this round.

The WWE has already indicated that they will appeal again and JAKKS has said they will continue to “vigorously defend” against the appeal. Says Jack Friedman, Chairman and CEO of JAKKS Pacific:

“From the outset, we have maintained that WWE’s claims against us were meritless and part of an attempt by WWE to force us to relinquish our financial stake in our licenses. We have refused to be bullied into submission and are delighted that the Connecticut Court has granted summary judgment in our favor.”

Because of this ruling, JAKKS will maintain copyright control over several wresting related licenses that the WWE would like to control and will also be the maker of WWE toys until their contract runs out in 2010.

Newsbites

Some items of note in the rest of the wrestling business world: