Behind the Business: Independent Contractors or Employees



Watching a recent video interview with Lorenzo Fertita, Owner of the Ultimate Fighting Championship (UFC), and his take on the unionization of Station Casino's workers, among other things, got me thinking about the development of a MMA fighter's union and if it would be good, or detrimental, to the sport, but I will not rehash that argument.  The question that came to my mind was regarding the fighters.

With over 250 fighters listed on their official roster, the UFC boasts the largest stable of mixed martial arts (MMA) fighters in the world.  By signing these fighters to exclusive contracts and providing accident insuranceto the fighters brings up the question of whether UFC fighters are employeesof the UFC, or merely independent contractors.

Why is this pertinent? If UFC fighters are indeed independent contractors, not employees, then they are not included in the National Labor Relations Act of 1935, and will nothave the Federal Government's support in creating a new labor union.  Additionally, as small business owners, independent conractors can be subject to anti-trust lawsuits if they decide to organize as an independent labor union, albeit the chances seem slim upon further investigation.  (This seems to be the perfect time to throw in the disclaimer that I am merely a fan doing research and am in no way attempting to provide legal advice of any kind).

So, what are fighters to the UFC?

Let's take a closer look after the jump:

U.S. Common Law breaks this issue into multiple parts all involving control over the subject.  Under the headings of Behavioral Control, Financial Control and Type of Relationship, I will attempt to dissect whether UFC fighters are truly employees or independent contractors.  Hat tip to which has a great breakdown of these categories and what they mean.

Behavioral Control

Does the UFC have the right to direct or control how the worker does the work through the type of instructions given, the degree of those instructions, the evaluation systems and training? 

Fighters train independently from the UFC, they receive instruction from coaches and managers, none of whom are employed by the UFC, and fighters have the ability to turn down fights.  These factors would initially lead us to believe that the fighters are not controlled in this aspect.  But, the UFC has control over the fighter in terms of the exclusive contract  It would be hard to argue that the UFC does not have behavioral control over the fighters because of the contract, and impossible to argue that the champion's clause does not give the UFC 100% control over its champions.

Financial Control

Do fighters have to make a significant monetary investment to have this occupation? Do they have unreimbursed expenses?  Is there an opportunity for individual profit or loss? Can the fighter make his services available to the market? How is the fighter paid?

Being a fighter isn't cheap.  Licensing, insurance, trainers, dietician, training partners, gym time, equipment, etc, etc, etc.  None of these expenses are reimbursed by the UFC, but I am guessing that some of this can be given through sponsorships or affiliations with certain well-known gyms.  Regardless, the UFC does not, and will not, foot the bill for fighters to develop their trade.  It is completely up to the individual fighters how much money he invests in his career and, accordingly, this will also determine if the fighter makes any money.  The potential for complete bankruptcy is there, and explains why we continue to hear about Ken Shamrock and Jens Pulver fighting well past their fighting prime.  Some fighters fight because that is all they know and the opportunity to do something else is not there. They need the fight payday because they are paid by the fight, not in a weekly/bi-weekly stipend like the rest of us working-class fools.

That being said, we once again run into a road block after thinking that these fighters might be independent contractors.  UFC fighters cannot fight whenever and whomever they want.  While under contract to the UFC, fighters can only fight for the UFC and only fight other UFC fighters.  We have seen this contested by fighters like Randy Couture, but the strength of the UFC contract was held up in court, and the fighter inevitably came back to the fight promotion. The UFC financially controls its fighters.

Type of Relationship

Are there written contracts? Are there employee benefits? How permanent is the relationship? Are the services provided a key activity of the business?

check. check. not very, unless you are English. check. Not much room for doubt on this one.

After delving into the arguments, I believe there is little doubt that UFC fighters are, in fact considered employees of the organization.  It starts with the exclusive contract and ends with the exclusive contract.  On one hand, I find it good to know that the fighters will have the support of US common law if they ever decide to attempt to promote a union in the UFC.  On the other hand, i personally do not believe that a union is the answer to increased fighter pay and benefits.

What do you think?


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