I don’t know much about the Ultimate Fighting Championship (“UFC”). I don’t follow the sport. However, I do follow the NLRB dockets and the matter Zubba, LLC d/b/a Ultimate Fighting Championship caught my attention. After some diligent research (a/k/a googling it), I learned that this case was apparently causing some scuttlebutt in the UFC world. However, employers in all industries where unionization efforts are prevalent can learn something from the complaint.
The complainant in the case is Leslie Smith. Ms. Smith is a female mixed martial artist (“MMA”). She apparently is good enough to have obtained a world wide ranking of #9. She has fought on the UFC circuit for several years. In her spare time, Ms. Smith also leads an organization called “Project Spearhead.” Project Spearhead isan effort to unionize UCF’s fighters. Among other things, Ms. Smith launched a website www.projectspearhed.com to draw attention to her cause. Ms. Smith had promoted the website and her unionization efforts through social media, traditional media, and planned on wearing a mouth piece in an upcoming fight to promoted her pro-union webpage.
On April 21, 2018, Ms. Smith was schedule to fight, but her opponent apparently did make weight. (Louden Swain she was not.) That fight would have been Ms. Smith’s last fight under her contract with UFC. Ms. Smith requested that the UCF extend her contract for two more fights in exchange for her fighting a heavier weighing opponent. UFC declined. Moreover, UFC notified Ms. Smith that her contract would not be renewed.
The success of Ms. Smith’s case hinges on whether she is an employee or independent contractor. The National Labor Relations Act protects employees but not independent contractors. Ms. Smith claims she has been mis-classified as an independent contractor. The employee v. independent contractor has been a hot issue of late. The NLRB will apply a eleven (11) factor test known as the right to control test to determine whether Ms. Smith is an employee or independent contractor. As the Board and Courts have held no one factor is controlling. But, following the decision in FedEx Home Delivery v. Nat’l Labor Relations Bd., 849 F.3d 1123 (D.C. Cir., 2017), 849 F.3d 1123, 1126 (D.C. Cir. 2017) whether the “putative independent contractors have significant entrepreneurial opportunity for gain or loss” has become a critical factor. Smith is vulnerable on this issue.
If I were representing UCF, on cross examination, I would ask Ms. Smith a series of questions concerning this factor, such as, whether she considers herself a brand, whether she hopes to win her fights, whether she hopes that he ranking will improve, and whether she hopes her success will lead to opportunities to derive income from sources other than actual fights (i.e sponsorship and licensing deals).
The Takeaways.
I see two takeaways for employers in industries that are the frequent target of unionization efforts.
- Ignore the Gut Reaction to Rid Yourself of the Problem.
Ms. Smith is claiming she was effectively terminated because of her union activities. Simply put, under the National Labor Relations Act you cannot retailate against an employee who voices support for unions or unionization. The complaint underscores the need to treat anyone engaged in a unionization effort careful before terminating them or simply changing their employment conditions. Even if this was not a motivating factor in UFC’s decision to not renew her contract, the decision could have been a strategic error.
The complaint does not mention whether her Project Spearhead was gaining any traction with other MMA fighters. Apparently there are 350 UCF MMA fighters. So, for Ms. Smith’s efforts to go anywhere she would have to obtain signatures from 30% of those fighters or 105. If Ms. Smith was able to obtain that level of support, then the Board would determine whether the critical issue of whether the fighters are employees, entitled to a union election, or independent contractors, who are not. Now, as Ms. Smith seems to boast in he complaint, that threshold issue can be decided without her having to first obtain the 105 signatures.
UCF strategic mistake is that they could have effectively dealt with Ms. Smith unionization efforts by keeping her in the fold through carefully crafted PR campaign and other efforts to dissuade fighters from forming a union. Meanwhile, they could preserve the issue of independent contractor status for a later date and even begin the process of creating a record specifically tailored to address that issue, if and when, the date arrived when it needed to be argued. If Ms. Smith’s complaint is successful, a future UCF unionization effort becomes much easier.
2. Call her bluff.
If you are concerned about your company becoming unionized, then you need to look hard at how your are treating your employees and how your are educating them on what it means to be union. If your are treating your employees well then they are not going to be receptive to the union message. How well you are treating your employees needs to be viewed objectively. Also, you need to constantly educate your employees why employee free choice is superior to unionization. The union message is seductive, in part, because the union organizer is a highly trained salesperson and knows what to say to get in the door with your workforce. However, a properly educated workforce will see the message for what it is, cheap sales talk that the union cannot often back up.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
