Bellator President Scott Coker heard the complaints from his new signees.
Fighters who came over as free agents after their UFC contracts expired had very similar gripes, many of them about the UFC’s “athlete outfitting policy” under an exclusive apparel deal with Reebok. What Coker couldn’t understand was how it was even legal.
“Listen, they’re independent contractors,” Coker said in June. “How they’re forced to wear a uniform, to this day, still baffles me. It should be against the labor laws or something.”
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As the UFC has placed more restrictions on its fighters, the case for keeping them classified as independent contractors has weakened, according to some observers both in and outside the MMA industry. And if the employment classification of UFC fighters was ever successfully challenged, it could mean major change for the industry leader.
“One consequence for the UFC is if they’re misclassifying employees as independent contractors, then they owe the IRS a lot of money,” said Justin Swartz, an attorney with the firm Outten & Golden, one of the nation’s largest law firms to focus solely on employment law.
Swartz has worked on similar cases involving the misclassification of exotic dancers in New York, where some clubs were eventually forced to pay millions of dollars in settlements after years of misclassifying employees as independent contractors.
“Dancers at strip clubs, they have schedules, they have rules to follow, and they have no business at all without the club,” Swartz said. “In some ways it’s the same with fighters. The fighters rely on the UFC in order to do their business, and they have a dress code, they have a lot of rules. But if they’re getting paid as independent contractors, then they’re paying their own employment tax, and they may be entitled to a refund.”
It’s not just a question of taxes, either. As independent contractors, fighters enjoy fewer protections than they would as employees. Their right to form a union isn’t protected. If they’re fired, they can’t seek unemployment benefits. An injury on the job doesn’t entitle them to workers’ compensation.
By keeping fighters as independent contractors while heaping more and more restrictions on them, the UFC has managed to have the best of both worlds, according to Gary Ibarra, a manager who has represented fighters such as Cung Le and Ben Rothwell. (UFC representatives declined to comment for this story.)
“(The UFC wants) the benefits of having employees, stuff like forcing the guys to wear uniforms, basically, which is an earmark of an employee,” Ibarra said. “But also when certain things happen that would be negatives, then, no, the UFC can say, ‘Hey, they’re independent contractors.’ That’s because, since the UFC has kind of gone unchecked, no one has forced them to adhere to one side or another.”
Which is not to say that a legal challenge couldn’t be forthcoming.
Full Article: Are UFC fighters employees or contractors? Why the distinction matters – and could mean millions