What could an association do for UFC fighters? Labor law expert explains

In the wake of the announced pay tiers for the UFC's Reebok apparel deal and the unveiling of the their drug testing policy, there has been…

By: John S. Nash | 8 years ago
What could an association do for UFC fighters? Labor law expert explains
Bloody Elbow 2.0 | Anton Tabuena

In the wake of the announced pay tiers for the UFC’s Reebok apparel deal and the unveiling of the their drug testing policy, there has been a great deal of  discussion around the subjects of unions, associations, and collective bargaining for fighters in MMA. Current fighters like Matt MitrioneRyan Jimmo, and, perhaps most surprising, featherweight champion Jose Aldo, have all shared their thoughts on the subject, while retired fighters have engaged in twitter debates over it. Even Dana White has felt the need to weigh in.

With so much interest, and to be honest, confusion about the subjects, I thought it would be worthwhile to bring in an expert to try and explain some of the facets involved. Who better than Zev J. Eigen, Visiting Professor of Law, Yale University.

Professor Eigen was one of my sources for an article I wrote some time ago titled “Why isn’t there a union in MMA?” That article looked at the logistics of creating a union or association and the many hurdles that would have to be overcome. For those interested in those questions I recommend they read it for today we are going to be focusing on what a union (or labor organization) or an association could do for the fighters.

The first question Zev, is what is the difference between a labor organization, like a union, and an association?

A professional association is broader in scope than a labor organization.

Labor organizations are defined by federal law—the National Labor Relations Act, or “NLRA.” Labor organizations exist to deal with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work. Unions like the Teamsters, or the Screen Actors’ Guild are examples of labor organizations. They are commonly organized around a community of interest in a particular category of work or profession. The Screen Actors Guild advances the interest of actors. The Writers Guild advances the interests of writers. Labor organizations are focused on representing a particular category of individuals and collectively representing them. Unions serve as the exclusive representative for their members in collective bargaining with their employers for wages, hours, and working conditions.

A professional association doesn’t necessarily collectively bargain. It doesn’t benefit from the protections that labor organizations have. For example, rules for labor organizations that pertain to strikes, work stoppages, protections against discrimination, and for union status, do not apply to a professional association, such as the American Bar Association (“ABA”) or the American Medical Association. Professional associations typically promulgate sets of rules or uniform standards pertaining to their members and typically the members are in one profession. Association members, even if they are negotiating with employers or other entities, are supposed to follow those rules or standards.

By coming together as a unified front, fighters would obtain a central voice in shaping the sport in which they compete.

If a professional association establishes standards applicable to members, members of that professional association are expected to abide by those terms. Social, political, and economic tactics are typically used to put pressure put on external organizations to conform to those standards. Professional associations also typically seek to enhance the professionalism of their industry, and provide their members with a central voice in matters that impact their livelihoods.

With a hypothetical fighters’ association, what are some of the benefits you could see it pushing for and achieving for its members?

A fighters association would provide members with a platform for group licensing, branding, and effective lobbying. By coming together as a unified front, fighters would obtain a central voice in shaping the sport in which they compete.

Further, “group licensing” arrangements have proven extremely successful in all of the other major leagues sports associations, fund all operations of these associations, and also provide benefits and royalty checks to members. For example, the Major League Baseball Players’ Association, or MLBPA, is the exclusive negotiating body on behalf of the players for all group licensed products involving more than two players.

Of course, owners prefer dealing with the individual athlete due to the disparity in bargaining power. An association with pooled group licensing rights helps level that playing field.

In other words by pooling their licensing rights the fighters could make sure they received a bigger cut – or at least a cut when they didn’t get one before – of the revenue from those image rights?

Yes, that is the hope. The other thing that I think would be of interest to fighters would be like we just described – a set of minimum terms promulgated by the association.

With regards to an association, since they are independent contractors the fighters couldn’t really risk setting a pay minimum or anything similar for fear of being accused of collusion by the DOJ?

Yes, that’s differences between a labor organization and a professional association.

But if they were a labor organization they could ask the members to only sign contracts that agreed to pay a certain minimum or that didn’t have provisions that allowed for extensions past a certain length or that protected some of the image rights of the fighters? Is that correct?

Yes, along those lines. Just like actors, there is a wide disparity of income potential. Brad Pitt is in a movie–I’m sure he’s not worried about making the minimum requirements. For probably any contract he signs he will exceed the minimum that the Screen Actors Guild has laid out. But on the other hand a day player on the same production cares deeply about the minimum guarantees.

This seems to be a common misconception, that an association or labor organization would somehow only benefit the lower profile athletes and not the stars. But If we use the SAG example, when they organized back in the 30s, it was for the benefit of both the stars and the day players. The day players got the minimums they wanted and the stars got protection from the contracts that locked them into studios for years and prevented them from testing the market and making more.

True. It was known as the Star or Starlet System back then. The Paramount Case is what broke up the vertically and horizontally integrated monopolies the studios had. They had a lock on the means of the production, distribution and exhibition.

The stars in those days were beholden to one studio basically their whole careers. This seems very similar to the pay or play contracts we see in fighting. “We are going to pay you X dollars but we may or may not have you fight.” For the big stars this a problem because you might be able to make more if you can walk across the street and get an offer from Warner Brothers or Sony, but If you can’t shop around because you are under a contract locking you into one studio it’s very hard to drive up your pay. At the top end there is a need to avoid the monopolistic power that is inherent in a single exhibiting venue, otherwise you are greatly limiting your pay.

It doesn’t really matter if the UFC is a monopoly or not – or even if you want to call it monopolistic in that there is probably very few other exhibiting venues – because I think that is hard to deny they have a great deal of leverage on their side. Same with other promoters in the sport, they often are in a much better position than the fighter with whom they are negotiating. One way to balance that out is to increase the bargaining power of fighters. And one way to do that is to solidify and unify the voice with which the fighters are negotiating. And that could happen through an association or a labor organization.

We talked about this last time, but another thing a fighters association could do is lobby for some sort of legal remedy, no? Something like having the Muhammed Ali Reform Boxing Act expanded to cover MMA or a fighters bill of rights?

I think lobbying for the expansion of the Ali act or a bill of rights is a good avenue just to improve fighters’ ability to earn a living, protect them at some level where protection is needed, and help provide a legal basis for remedies. The Ali Act is about transparency, which I think would help.

At the same time I don’t think that’s enough. It’s good to know how much a fighter is getting paid, but that doesn’t improve their pay, or improve their benefits. That doesn’t improve their ability to share in revenue like licensing or derivative rights. It just helps a fighter or his or her manager see how much that fighter is actually getting, and whether the person handing him his check is attempting to defraud him. Just having a legal remedy availably, a statutory basis for obtaining relief isn’t enough because fighters are very rarely in a position to enforce those remedies. What do you think would happen if an entry-level fighter sued the UFC for failing to pay him $10,000 in owed compensation? Even if the UFC paid him all of the $10,000, it would be obviously against that fighter’s long-term interests if he or she wants to fight again and get good fights, etc. That’s where an association or labor organization comes in–

How do they go about using their leverage? They can’t really strike if the promoter doesn’t agree to their term? They can’t even really collectively bargain can they?

Protections under federal law for union activity only applies to employees, not independent contractors. So if fighters are IC’s, then they could not avail of those protections.

You struck on the differences between a labor organization and a professional association. For a professional association it would be all about setting standards, lobbying, and trying to use economic and political leverage effectively.

A labor organization has more leverage and legally derived protections. The most important thing it would allow is the ability to strike and collectively bargain. It is much easier to bargain when you have those tools available to you. An association doesn’t necessarily collectively bargain and an association doesn’t have the protections afforded to a labor organization. There are federal laws protecting employees from adverse employment actions taken against them that result from their desire to form a union or assert collective rights.

There seems to be some disagreement over whether UFC fighters should be classified as independent contractors or employees. What should their status be?

The protections under federal law for union activity only applies to employees, not to independent contractors. So if fighters are ICs, then they could not avail themselves of those protections. The question of whether one is an IC or an employee boils down to a bunch of questions over how much control the employer exerts over the individual. Who controls or directs the employee. There are a number of court cases determining the proper classification of workers in different contexts—workers’ comp, unions, taxes, the Fair Labor Standards Act, etc.

One major indicator is if the person has the ability to work for multiple entities. If a contractor is renovating your house, what do they do when they’re done? They go renovate other people’s houses. They have many multiple homeowners paying them for their work. It is very clear they are independent contractors and not employees of the homeowners. They are less economically dependent on one homeowner, and that makes them ICs.

If you work for only one employer for a long period of time, that employer controls the work a great deal, and there is insufficient entrepreneurial autonomy actually exercised by the individual, it will likely look more like an employment relationship and less like an independent contractor relationship.

And with the new Reebok deal requirements, and the Code of Conduct and the new drug testing policy, that seems like a lot of control over the fighters.

Yes. The more control they exert, the more it looks like an employment relationship.

And who determines if they are employees or independent contractors?

That is up to the courts.

And how do the courts determine it?

If it’s in the context of forming a union you have to be employees, you cannot be independent contractors to qualify for the protections of the National Labor Relations Act. So if the employees formed a union and petitioned for an election – a secret ballot election held to certify the union to be their exclusive representative with regards of collectively bargaining – then the National Labor Relations Board would determine that question. The UFC would likely raise as a defense that the fighters are not employees as required by the Act, in which case, the Board would make that decision. Of course, this could be appealed to a court.

Instead of forming a union to challenge their status could an independent fighter challenge that?

An individual fighter could challenge it in another context if it became relevant. One way it could become relevant is in a class action, the allegations are such that the employees are saying they are employees, or in any action by a fighter against the UFC that would statutorily require an employment relationship as a prerequisite for relief being granted.

But it would have to be filed in the Nevada state court because of the fighter’s contracts, correct? And, unlike a class action, they would have to foot their attorney fees, right?

That would make it less appealing for sure.

Now a lot of people seem to be under the impression that anyone speaking up about a union or association is going to get punished by the UFC, but there’s actually laws protecting those that do, are there not?

Section 8 of the Nation Labors Relations Act protects individuals against employers taking adverse actions against them when those individuals try to exercise their Section 7 right to try and form a union or even to petition the employer in the absence of trying to collectively bargain about things that affect the group of fighters. So even without the intent to form a union or collectively bargain if a fighter stepped forward and said I am speaking on behalf of my fellow fighters and here are some complaints we have–. that’s called “protected concerted activity” and even without the attempt to form a union, the individual would be protected from adverse employment actions. So if the UFC fired that person they’d have to reinstate them. But again that person would have to be an employee and not an independent contractor for that law to apply. You have to be an employee to qualify for the protection. The law is broad— even professional employees would qualify; you just can’t be a manager or supervisor, which I don’t think anyone thinks these fighters are.

In the case of fighters who are supposed to be independent contractors, what happens if they start pushing for a union and then something happens that they think is the promoter punishing them?

In your scenario, if Joe the fighter stepped forward and said “I talked to a bunch of fighters and our big complaint – and it’s not just me this affects all of us – is the new uniform deal.” And then the UFC took some adverse employment actions, then that person could claim the protections of the Act. I would assume the UFC would claim this person does not get that protection because they are not an employee, but rather an independent contractor. And so this is another way this issue would be litigated.

So any actions that could be interpreted as possible punishment for them being vocal? What if, for example, a fighter was used to getting a locker room bonus but for after speaking up didn’t get one? Would that be an adverse employment action?

Absolutely. Adverse employment actions are failures to hire, failures to promote, failures to pay someone. If you are getting a certain level of compensation for a certain amount of work performed, and then that level of compensation drops off, right after a fighter is vocal about complaining about a deal, of course that’s an adverse employment action, for which the remedy would be reinstatement or being made whole for the loss. Employers that retaliate against a “troublemaker” employee who is trying to speak up to advance the interests of him and his fellow workers, are the most likely to get into trouble with the law.

And what do the courts do if they decide that an adverse employment action took place?

It is up to the fighters to actually work together with a collective voice if the want to see their goals achieved.

The typical remedy is to put the employee back in the position he or she would have been in. So if he was terminated he would get his job back. If he got paid $700 but should have got $1000 then they’d have to pay him the $300.

If the court decided that there were other losses they could award more; not punitive damages but there are other damages that could flow from the loss such as loss of reputation.

Is there any advice you’d give fighters that are thinking about a union or association.

Fighters have to have a clear sense of what their interests are. They have to have a clear sense of the best way to obtain those interests in a meaningful way. It has to come from the fighters. If I were running a professional association and I had a list of things I thought were important and the fighters told me no something else should have a higher priority, then I’d reprioritize the list of things that are important for them.

It is up to the fighters themselves to not only determine what’s important but to actually work together with a collective voice if the want to see their goals achieved. Because if we’ve learned anything over the years it’s that no one will do it for them.

Professor Eigen can be contacted via twitter, where his handle is @MMAFA_z

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John S. Nash
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