1099 Misclassification Lawsuit

Three wrestlers have filed suit against Connecticut based, World Wrestling Entertainment, Inc, on grounds they were misclassified as Independent Contractors. The case has recently been moved from state to federal court, and should prove to be an interesting one as we have seen the fighting techniques previously deployed by those involved.

An official copy of the wrestler's compliant can be viewed here, and contains some interesting allegations with details of the amount of control the WWE exercised over the independent contractors. Using the basis that most misclassification suits center around the evidence of control upon said contractors, the WWE would need to demonstrate how each of these wrestlers are behaving independently and free of control (per IRS guidelines). If these claims turn out to be true, it may be difficult for WWE to defend the 1099 classification. Details of the control are included the wrestlers' allegations listed below.

Behavioral Control Claims 

• WWE determines wrestlers' physical training routine, and skill levels of training.
• WWE determines location where the wrestlers are to perform (including setting of time).
• WWE determines who the wrestlers will compete with and against, the duration of each match and - I hope this does not come as a shocking disappointment to you fans out there - the outcome of each match.
• WWE determines the costumes and hairstyles that the wrestlers are to wear, including their props and stage personas and signature moves.

Wrestling entrepreneur Eric Bischoff has provided a bit of commentary on the subject in his blog, not suprisingly speaking out against the lawsuit. Mr. Bischoff seems to recognize the severity of this case, providing emotional detail of his own painful battering from the IRS in the late 80's/early 90's.

Begin Heating Popcorn Now 

Readers are putting their bets on both Vince McMahon (WWE Chairman) and the prosecuting wrestlers over at the CFOSnafu blog.  A comical summary of the suit is provided, with a noteworthy detail: The WWE avoided paying for and providing costly benefits such as health insurance, sick time, and workers compensation by classifying these wrestlers as Independent Contractors rather than employees. One can only imagine how useful these benefits would have been to the wrestlers in this line of work.

Stay tuned for more details on this interesting case. It is sure to be an entertaining battle, as these wrestlers know how to put on a show.