Connecticut Employment Law Blog Insight on Labor & Employment Developments for Connecticut Businesses

WWE Lawsuit Update: WWE Files Motion to Dismiss and Discloses Booking Contracts of Wrestlers

Posted in Litigation

UPDATE 10/8/08 – I have posted a FAQ on the lawsuit this morning due to the extraordinary interest in this subject. You can find it here

UPDATE 10/7/08 – Welcome various wrestling fans (who are visiting by the thousands this morning)!  The links to the contracts are below. 

One note to clarify some of the reports on this: These contracts were not "leaked". They were filed by WWE in federal court in Connecticut and are publicly available on the court’s website.  I have merely downloaded them and have them available here since many people don’t know how to access the court system.  If you have any questions or comments, please feel free to use the comment box.

As expected, WWE filed its motion to dismiss (download here) the lawsuit brought by three wrestlers who claimed that they were improperly classified as "independent contractors" and not employees.  (For prior blog coverage, see prior posts here and here.)

The argument is lengthy but fortunately the WWE has prepared a "summary of argument".  The gist of the argument is that the wrestlers don’t have a a legal claim ancourtesy wikipedia commonsd that even if they did, those claims are barred by statute of limitations.  But reading it, one is also left with the impression that WWE’s arguments have been developed over time and nuanced to withstand judicial scrutiny. 

First, … the plain and unambiguous language of the Booking Contracts does not obligate WWE to pay plaintiffs’ taxes or make withholdings to pay such taxes, nor obligate WWE to provide plaintiffs with the “rights, incidents and benefits of employment.” Second, plaintiffs’ unjust enrichment claims fail as a matter of law because all aspects of plaintiffs’ relationships with WWE are governed by their Booking Contracts, including specifically those aspects of the relationship at issue in the present litigation. Third, plaintiffs’ breach of contract and unjust enrichment claims are barred by the applicable statutes of limitation. Fourth, plaintiffs’ state law claims are disguised attempts to create a private cause of action based upon the application of federal and/or state tax law and to circumvent the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq. …

Fifth, even if plaintiffs sought leave to amend their state law claims as direct claims under ERISA, such an amendment would be futile since their claims must be dismissed for failure to file their Complaint within the applicable limitations period, for failure to allege exhaustion of administrative remedies, and for failure to allege any facts to support standing to bring direct claims under ERISA. Finally, because plaintiffs’ individual claims against WWE fail, plaintiffs cannot, as a matter of constitutional standing, continue to assert putative class claims on behalf of absent class members.

The wrestlers will now have several weeks to respond, though don’t be surprised to see them ask for an extension of time of at least 30 days to respond further to it. 

While the legal brief may be of interest to in-house counsel and others in the entertainment industry, the exhibits to the motion will be of much greater interest to most.  Why? Because the exhibits contain the booking contracts of each of the wrestlers.

Wrestler Scott Levy’s contract in 2000 (download here) appears to be the richest with guarantee minimums of $75,000, $150,000 and $200,000 for the first three years.  By comparison, wrestler Michael Sanders’ contract in 2001 (download here), called for guarantees of $52,000 and $75,000 in the first two years.  And Chris Klucsarits’ contract in 2002 (download here) called for a guarantee of $100,000 in each contract year.   

Wrestling fans may enjoy reading about their favorite wrestlers but for human resource professionals and others, the contracts are useful to read because they show a serious attempt by WWE to keep the wrestlers as independent contractors and not employees. 

In fact, paragraph 13.1 of the agreement specifically addresses this issue. That provision states "WRESTLER is an independent contractor" and "Nothing in this Agreement shall be construed to constitute WRESTLER as an employee…"  Will this be dispositive?  Probably not since parties cannot avoid legal obligations just by language of a contract, but it will be an obstacle for the wrestlers to overcome. 

Who will ultimately prevail? It’s too early to tell, particularly without seeing the wrestlers’ response.  But one thing is certain — even WWE can’t script the outcome to this fight.

  • http://www.charlesakrugel.com Charles Krugel

    As a management side labor & employment attorney & WWE fan, thanks for posting all of this information. It’s fascinating.

  • Aaron R. Hemgesberg

    I am a WWE stock holder and in my yearly stock report from the WWE it metions that the wrestlers are independent contractors.

  • chris

    a true “independent contractor” by legal description, SHOULD allow the “worker” and not a WWE employee, to work elsewhere while also working for the WWE. The WWE doesn’t allow this. So “independent contractor” is a flippant term that the WWE uses to protect themselves from constituting that their wrestlers are employees for tax and liability purposes. Smart business move but pretty crummy employer. Whoops! I guess the WWE and it’s presidential leaders, CEO’s and chairmen wouldn’t be called employers, would they?

  • Kilroy

    This is great reading.
    13.1 of the agreement states “WRESTLER is an independent contractor” and “Nothing in this Agreement shall be construed to constitute WRESTLER as an employee…”
    Do you think that the other provisions barring the wrestler from doing outside work contradicts that provision? You can’t be considered independent if you are also exclusive can you?

  • JD Storm

    i have to agree with those that say that the wrestlers aren’t truly “independant contractors”, as WWE is claiming. if they were truly “independant contractors”, like their contracts claim, they’d have the right to work when, where & how they want.
    if i hired a contractor to fix up my home, i can’t go around telling them not to work for other people. i typically can’t tell them how to do their job. about all i can do is tell them what work i want done. how they accomplish the work would be their concern, so long as they aren’t violating any state/federal laws.

  • link

    lets see , they are on tv every week like people on ER, heroes,CSI, and any other program you can think of, so why arent they members of SAG Screen Actors Guild, where they might get some Union representation……Oh wait Vinny dont want no Union cause then he wont have complete control over every aspect of the character that he creates !!!! these are actors portraying a character on tv, so treat them as such and pay them accordingly and protect them when they get injured on the job. even sanatation workers, cops, and nurses have health insurance and workmen compensation

  • http://www.ctemploymentlawblog.com/2008/10/articles/decisions-and-rulings/wwe-lawsuit-update-what-you-need-to-know/index.html Connecticut Employment Law Blog

    WWE Lawsuit Update: What You Need to Know

    My post on the WWE lawsuit involving three former wrestlers known as Raven, Kanyon and Mike Sanders has drawn extraordinary interest. (Although I used to follow things when I was younger — Jimmy "Superfly" Snuka was among my favorites –…

  • Jim

    The crucial determination of an employee versus independent contractor is CONTROL over the individual. Since the WWE tells them where to work, when to work, how to work and bars them from working elsewhere there is no further control they can have over the individual. I have been involved in tax audits for clients that have exerted far less control over their independent contractors and they were classified as employees. I think they are employees…….Vince needs to be ready to pony up his share if the FICA tax soon !!!

  • Pingback: Five Years Later, The Most Popular Post Was About....Wrestling? | Connecticut Employment Law Blog