With the campaign for U.S. Senate winding up in Connecticut soon, there’s been lots of chatter about Linda McMahon’s role with the WWE.
I’ll leave it for others to analyze political issues arising from her relationship with the WWE, if any, but her relationship with the company provides an interesting backdrop to talk about independent contractor agreements.
Indeed, while Ms. McMahon’s relationship was covered, in part, by an employment contract, part of her relationship was covered under a "Booking Contract" — something the company uses for professional wrestlers. The contract, effective February 15, 2000, can be downloaded here.
Yes, Ms. McMahon signed a booking contract in the same fashion that professional wrestlers do. (Lest you think that Ms. McMahon’s contract was unique, there are also booking contracts for Shane McMahon and Vincent McMahon.)
So what services was Ms. McMahon to perform? According to the contract, she granted WWE exclusively "the right to engage [her] performance in wrestling matches at professional wrestling exhibitions, as well as appearances of any type at other events, engagements or entertainment
programs in which [she] performs services as a professional wrestler,entertainer or otherwise directed by [WWE] in its sole discretion…"
The WWE was hardly charged a fortune for her services at least initially. Under Paragraph 7.2, Ms. McMahon was to receive a percentage of gross receipts from any "House Shows" (at no less than $150 per appearance) or $50 for each day of television taping for broadcast.
The contract mirrors many of the same provisions found in the contracts that various professional wrestlers had with WWE.
Indeed, because of those similarities, there are some unusual interactions. For example, according to Paragraph 9.2, Ms. McMahon was responsible for her own conditioning and training and "maintenance of wrestling skills." She was also recommended to "obtain health, life and/or disability insurance to provide benefits in the event of physical injury arising out of [her] professional activities", though it is hard to imagine that the WWE didn’t already provide this to her in her role as CEO.
Moreover, because Ms. McMahon was also acting as President and CEO at the time, any notices to the "company" about the agreement had to be sent to the company care of herself (Paragraph 13.6). Notably, though, the contract was signed by another person on behalf of the company.
As I’ve commented before, the contracts that WWE uses have been upheld time and again as valid and anyone looking for an example of independent contractor contact that has been crafted to meet the particular position would be well served by reviewing the ones that WWE uses. Ms. McMahon’s booking contract with the WWE has examples of such provisions and for that reason, it is worth reviewing if you or your company uses independent contractors.