From January to June, the company recorded losses of $1.2 billion. (In 2015, Uber lost $2 billion.)
In July, after two years and two billion dollars lost in China, Uber bowed out of the country, selling its operations there to hated rival Didi Chuxing.
On August 18, a judge rejected the $100 million settlement Uber had reached with drivers in California and Massachusetts over their independent contractor misclassification. Two weeks later, The Wall Street Journal reported that Google would launch its own ride-sharing service via popular route-finding app Waze.
From January to June, Uber recorded losses of $1.2 billion.
Finally, in October, New York’s Department of Labor ruled that Uber drivers are employees—a ruling echoed later that month by three London judges.
Oof. Even for The Most Valuable Startup in the World, that has to hurt.
It would be hyperbole to say that Uber is in danger of failing. (A $62 billion valuation affords at least a little security.) But, unlike a year or even six months ago, one can now conceive of a world in which Uber falters.
Here are the three greatest threats to the ubiquitous ride-sharing service.
Uber faced 50 federal lawsuits in 2015: more than Lyft, Instacart, Handy, and Airbnb combined. They outpaced these other gig economy companies in 2014, 2013, and 2012 as well.
They have fought more legal battles than billion-dollar startups Snapchat, Pinterest, WeWork, Dropbox, SpaceX, and Palantir (whatever that is). And the end is nowhere in sight.
In April 2016, a $100 million settlement was reached in two class action Uber lawsuits representing 385,000 drivers in California and Massachusetts.
Scores of drivers filed objections to the deal, which they considered unfair. The lead plaintiff, driver Doug O’Connor, fired his attorney. In a formal objection filed with the court, Mr. O’Connor said that the deal “is not in my interest or in the interest of any Uber driver.”
U.S. District Judge Edward Chen agreed. On August 18, 2016, he rejected the Uber settlement, saying it was not “fair, adequate, and reasonable” for drivers. (These cases will now go to arbitration.)
Judge Chen noted that the amount offered to drivers was just ten percent of what the Uber lawsuit claimed drivers were owed: $1 billion.
Dozens of Uber lawsuits are still pending in courts nationwide. In addition to monetary losses, Uber should dread the potential of a judge ruling that Uber misclassifies its employees as contractors.
In his decision, Judge Chen also emphasized that under the terms of the settlement Uber would pay just $1 million in state penalties—which could otherwise total more than $1 billion.
Two weeks later in Pennsylvania, a state regulator reinstated an $11.4 million fine against Uber for exactly these kinds of penalties. This fine arrived about six months after California’s Public Utilities Commission (CPUC) hammered Uber with a $7.6 million fine for shirking state regulations.
The Pennsylvania Public Utility Commission (PUC) says that Uber operated illegally in the state from February to August 2014, providing almost 123,000 rides without state approval. According to the PUC, Uber also obstructed the state’s investigation into its dealings.
Two judges originally set the fine at $49.9 million, but the PUC reduced the total to $11.4 million—against the wishes of state officials.
Uber vowed to appeal, calling the fine “absurd.” But decisions like the PUC’s and CPUC’s often establish a precedent. What is to stop the other 48 states from issuing similar (or even higher) fines?
Moreover, as Uber knows all too well, global expansion is expensive. The startup has met resistance in Australia, Belgium, Brazil, Denmark, France, and countless other countries. Adapting to each nation’s unique laws, waging lengthy legal sieges, and fighting taxi unions costs a lot of money.
In China, Uber tried for two years to make it work. After $2 billion in losses, they threw in the towel.
In May, Google launched an exclusive carpooling service in the Bay Area. Now, through the Waze app, Google is expanding that soft opening so that anyone in San Francisco or Oakland with Waze can request a ride.
The service costs a maximum of just 54 cents per mile, far cheaper than Uber or Lyft. Though it is currently just a carpooling service, presumably Waze will broaden its offerings to include the kinds of on-demand rides made famous by Uber and Lyft.
And like Uber, Waze may not need drivers to do so.
Google’s Self-Driving Car Project (developed by Google X) has been in the works for a decade, with the aim of releasing these cars into the wild in 2020.
It is easy to envision, then, a scenario in which Google/Waze spends the next four years building a ridesharing infrastructure and customer base across the country, and then replaces at least some of its drivers with driverless cars—which would save it a bundle.
In the meantime, Google can learn from Uber’s mistakes and either classify its (human) drivers as employees or offer them similar reimbursements, tips, and other employee rights that Uber has failed to deliver. Because Uber has already waded through so much thorny legal territory (and continues to do so), Waze’s path should be much clearer and smoother.
Uber is the most valuable startup in the world, but Google’s parent company Alphabet Inc. is The Most Valuable Company in the World, with a market value of $546.50 billion: nine times that of Uber.
Uber is a giant, but Google is a god. It has several advantages over Uber (money, branding, experience) and could very well take the startup down—or, more likely, over—in the long run.
July’s jobs report appeared to be great news for the U.S. economy. It showed that 255,000 new jobs were added—well above economist expectations—while the unemployment rate remains unchanged at 4.9 percent, the lowest it’s been since 2008.
To hear the White House and mainstream media tell it, the jobs report is evidence of America’s continuing strong recovery from the Great Recession. America has added roughly 200,000 new jobs a month for about two years and regained all of the 8.7 million jobs that were lost in the Great Recession (and then some), essentially putting us back at what economists consider to be full employment.
A big part of the jobs story–and one that often goes untold–is job quality, not just job quantity.
Yet the economic view on the ground tells a different story. According to a July 2016 Pew Research Center survey, only 30% of Americans believe that economic conditions in this country are “excellent/good,” while just 1/3 believe that economic conditions will improve in a year. A recent CNN poll found that 56% of Americans think their kids will be worse off financially than them. Shockingly, 47% of Americans responded to a Federal Reserve survey saying they didn’t have $400 in savings to cover an emergency.
This economic unease has fueled anti-establishment presidential candidates Donald Trump and Bernie Sanders, both of whom placed messages of economic unfairness at the center of their campaigns. Polls consistently show that the economy is the most important issue of the 2016 campaign, ahead of terrorism, health care, and education.
So what is fueling Americans’ concerns about the economy? Why are so many living paycheck to paycheck in the midst of supposedly improved economic times?
A big part of the story is job quality, not just job quantity. We are seeing the rise of the so-called “contingent worker,” a group that includes contractors and non-traditional workers who aren’t tethered to a single employer—and who also aren’t provided the benefits, legal protections, and security that come with full-time employment. By one estimate, all of the net economic growth of the last decade occurred in contingent work arrangements.
The shift to a contingent workforce is in some respects the result of a changing economy. But companies have also unfairly eliminated labor costs by shifting employment to other parties and misclassifying employees as independent contractors.
The Department of Labor considers employee misclassification a serious problem that harms the entire economy and is cracking down on the practice. Recent court rulings may also make it more difficult for companies that depend heavily on independent contractors to avoid responsibilities to workers through outsourcing. Additional challenges to harmful employer practices such as misclassification makes it incumbent upon workers to know the law and understand their rights.
David Weil literally wrote the book on how companies’ outsourcing of work has changed not only the economy, but the nature of employment.
“The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It” landed Weil, a former economics professor at Boston University, a job as head of the Wage and Hour Division at the Department of Labor.
“Our basic mission at Wage and Hour is pretty simple: making sure people get a fair day’s wage for a hard day’s work,” said Weil. “The difficulty is the workplace has changed dramatically in the last 20 years.”
In Weil’s view the workplace has “fissured” as companies, responding to changing market pressures, cut labor costs as part of a broader strategy to become leaner and more agile, in the process shedding their role as direct employers of workers.
Throughout most of the 20th century market changes were slow and incremental, and consumer tastes were relatively simple. Production was based on a “push” strategy of forecasted demand. This allowed companies to focus on economies of scale, or gaining a cost advantage via increased output.
Work, reflecting these trends, was repetitive but stable. Workplace technology changed slowly, with workers provided ample time to learn new skills. The main employment relationship was between large businesses—such as General Motors, US Steel, IBM, and Xerox—and the workers that made their products. Direct, long-term employment with a single company was the norm.
All of this began to change in the late 1980s and early 1990s as globalization and technology reshaped the economy. Operating in tandem, these forces expanded the competitive landscape and created virtually endless new market opportunities.
More sophisticated consumers began a shift to a “push” economy. Change became fast, dynamic, and constant. Facing increasing pressures to adapt to market changes, businesses began to shed activities considered peripheral to their core business models, shifting their focus to product differentiation and market niches. Maintaining brand integrity (and thus loyal patrons) and driving down costs emerged as the pillars of success in this new economy.
Unfortunately for workers, they are viewed as low hanging fruit when it comes to cost cutting. Keeping a full-time workforce is expensive. Employee expenses such as federal (FICA) payroll taxes, unemployment and workers’ compensation insurance contributions, health and retirement benefits, and paid time off add 25% – 30% to payroll costs. Only employees are required to be paid the minimum wage and overtime, and employees have much more robust legal protections for things like workplace accidents, discrimination, exploitation, and wrongful termination.
Businesses realized they could farm out to a network of providers jobs that were once handled internally. In so doing they created competitive markets for services that allowed them to eliminate direct employment costs.
In short, businesses still receive the benefit of workers’ labor without serving as their employer of record and assuming additional financial liabilities. Using business models such as subcontracting, temp agencies, labor brokers, franchising, and third party management, companies push apart the longtime bedrock of the U.S. economy—the employer-employee relationship—leading to what Weil calls the “fissured” workplace.
Weil admits that fissuring does not always result from companies’ desire to avoid payroll costs. As markets have changed, so have the role of workers. A static workforce doesn’t make as much sense in a business environment requiring continual reflection and reorganization. The rigid, 9-5 enterprise structure of employment is becoming obsolete. In today’s leaner enterprise, teams are formed around projects that make use of contingent labor and independent experts. Once a project is completed, teams can be disbanded and new ones formed on an ad hoc basis.
From this perspective, contingent workers increase business efficiency, agility, and flexibility. They not only cost less than employees, but also turn employment expenses into variable costs for services, rather than fixed labor costs.
Weil believes, however, that this model allows companies to have their cake and eat it too. By calling some workers “independent contractors” and hiring others through agencies, companies are able to avoid some of the burdens—but not the benefits—of having employees. Contingent workers contribute to building a brand that reaps great profits for the lead company, but don’t receive job-based health and retirement benefits or the minimum wage, overtime, and other labor law protections.
Rise of the Contingent Worker
To illustrate the workplace that has cracked and split apart, Weil uses the example of a hotel operating under a well-known international brand. The workers who greet guests, clean rooms, landscape, and prepare food are likely not hotel employees, or even employees of the hotel brand. They are more likely employed by another business offering hotel management services.
“All of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”
Such blurred lines of employment are not limited to the hospitality industry. Awareness has grown of the reliance on contract labor in the so-called “gig economy” comprised of tech industry startups companies such as Uber, Lyft, Handy, and Taskrabbit. But it’s also the workers who deliver packages, install cable and internet, drive taxis, provide security, perform construction work who have an arm’s length relationship with those companies that appear to employ them. In fact, even professionals such as doctors, lawyers, financial advisers, and education and health service providers are falling through the employment cracks.
Identifying the size of the contingent workforce is tricky due a lack of standardized terminology. Depending on the definition used, contingent workers make up less than 5% to as much as 40% of the total labor force. Estimates are also difficult in the absence of comprehensive, nationally representative data.
From 1995 to 2005 the Bureau of Labor Statistics (BLS) administered a survey known as the Contingent Work Supplement (CWS), a supplement to its monthly Current Population Survey (CPS). BLS administered the CWS in 1995, 1996, 1999, 2001, and 2005. Since 2005 BLS has not received funding to administer the supplement.
In the absence of the CWS public and private organizations have attempted to fill in data gaps. The RAND Corporation, for example, conducted a version of the CWS that counted workers engaged in “alternative work arrangements,” defined as temporary help agency workers, on-call workers, contract company workers, and independent contractors (freelancers). The Government Accountability Office (GAO), relying on data from the CWS and other government surveys, uses these same categories of alternative work arrangements but adds to them self-employed workers and part-time workers.
Using GAO’s definition of alternative work arrangements, contingent workers comprised 30.6 percent of the labor force in 2005 and 40.4 percent in 2010. Contract company workers, on-call workers, and agency temps—what GAO calls “core contingent arrangements”—made up 5.6% of the workforce in 2005 and 7.9% in 2010.
RAND, comparing BLS CWS data to figures derived from its 2015 RAND-Princeton Contingent Worker Survey (RPCWS), found a rise in the incidence of alternative work arrangements from 10.1% in 2005 to 17.2% in 2015—an increase of more than 50 percent. Using combined CWS/RPCWS data shows that from 1995 to 2015 the proportion of workers in alternative work arrangements increased by nearly 85% (9.3% to 17.2%).
The Great Recession appears to have accelerated the trend towards companies hiring more contingent workers. According to RAND, from 2005 to 2015 total U.S. employment increased by 9.1 million (6.5%), but traditional full-time employment actually declined by 0.4 million (0.3%). These estimates caused RAND to speculate that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.”
And the growth continues. Enterprise software company Intuit says that more than 80% of large corporations plan to substantially increase their use of flexible workers in coming years. Intuit predicted in 2011 that by 2020, contingent workers will exceed 40% of the workforce—an estimate that is already outdated. Many now expect that at the turn of the next decade contingent workers will make up 50% of the workforce.
Independent Contractors in Focus
The most common form of alternative work arrangement is independent contracting. Definitions of independent contractors (ICs) vary depending on context. The BLS, GAO, and RAND generally agree that ICs “obtain customers on their own to provide a product or service.” Business consulting services group Navigant specifies that ICs:
Work at multiple projects simultaneously
Move frequently from project to project
Exercise significant autonomy relative to their “client”
Often bring their own tools or equipment to the project
Independent contractors are considered to be “self-employed,” but not all self-employed workers (such as restaurant owners) consider themselves to be independent contractors. ICs may also be referred to as “independent consultants” and “freelancers.”
Insofar as ICs are differentiated from employees, the surest means of identification is how income is reported. Unlike employees, who report income on an Internal Revenue Service (IRS) Form W-2, independent contractors report income on Form 1099-MISC.
Approximately 1 out of 10 U.S. workers is considered to be an independent contractor. Varying definitions and data sources make it tough to pin down the precise number, however. GAO data puts the number of ICs as high as 15-16% of the labor force, while RAND data has the number of ICs at 9.6% of the labor force (as of 2015).
The total percentage of ICs in the workforce increased by about 50% from 1995 to 2015. IC characteristics have also changed, most notably in relation to gender and occupation. Although the number of male ICs has remained stable at around 8-9% of all workers, the number of female ICs has nearly doubled over the last 20 years. Industries that have shown the largest shifts in IC workers include Construction (down 5%), Manufacturing (up 4.8%), Education and Health Services (up 8.8%), and Agriculture, Forestry, Fishing, and Hunting (up 26.8%).
Employees or Independent Contractors?
The use—and misuse—of independent contractors is a topic of considerable controversy.
On the one hand, surveys show that many workers prefer independent contractor relationships to employment relationships. The BLS reports that 82.3% of ICs prefer working independently to being an employee. A Pew Research Center survey found that 39% self-employed workers are “completely satisfied” with their jobs compared to 28% of employees. Flexibility, autonomy, and a path to entrepreneurship are cited as the top reasons why workers prefer independent contracting.
Compared to employees, contingent workers earn less and receive fewer benefits, have less economic security, and are more likely to require public assistance.
For skilled workers who reap the benefits of selling their services to businesses while maintaining autonomy, self-employment can indeed be a profitable career path. Yet other workers are caught in a grey area between employee and independent contractor. They may be economically dependent on and have their work controlled by a single company that appears to be an employer, but that company might consider them a contractor, not an employee. An estimated 10-30% of employers misclassify their employees as independent contractors.
The intentional misclassification of employees as independent contractors is a problem for workers, governments—and if they’re caught breaking the law—employers. While the practice allows employers to save 25-30% on payroll costs, it denies misclassified employees access to benefits and protections. Research shows that, compared to employees, independent contractors and other contingent workers earn less and receive fewer benefits, have less economic security, and are more likely to require public assistance. Misclassification also results in lower tax revenues and losses to state unemployment and workers’ compensation funds.
Governments Crack Down
Lax enforcement of independent contractor laws prevailed throughout the 1990s and the early 2000s, but since 2007 federal and state regulators have been cracking down on misclassification.
The Department of Labor has been hiring more investigators to “detect and deter” misclassification, prosecuting more companies believed to be misclassifying workers in order to avoid paying overtime and the minimum wage, and providing grants to state workforce agencies to increase enforcement efforts.
DOL refers to these efforts as a “Misclassification Initiative.” From 2009 to 2015 the agency estimates it has recovered nearly $1.6 billion in back wages for 1.7 million workers. The IRS, through its Questionable Employment Tax Practices program, Voluntary Classification Settlement Program, and regular audit processes has likewise sought to crack down on employee misclassification. Many state workforce agencies, particularly in left-leaning California, Massachusetts, and New York, have also been diligent in pursuing businesses believed to be misclassifying employees as independent contractors.
Independent Contractor Misclassification Lawsuits
Workers are increasingly taking matters into their own hands and challenging their status as independent contractors in class action lawsuits.
Misclassification lawsuits have been on the rise in recent years, with high-profile cases filed by couriers, exotic dancers, and drivers for on-demand ride companies Uber and Lyft, among others.
In 2016 alone, FedEx, Uber, and Lyft have reached settlements with workers worth $240 million, $100 million, and $27 million, respectively.
These cases reveal a common thread used to determine whether a worker is an employee or a contractor: the degree of employer control over the manner in which work is performed.
FedEx ground workers argued that they were employees because FedEx assigned them specific routes, required them to check in with managers at the start of the day, and regulated their appearance and equipment. Uber and Lyft drivers similarly argued that they were subjected to a litany of detailed requirements that, if not followed, could result in their termination. Even exotic dancers have used these arguments to win misclassification cases, saying that they were denied flexibility in their choice of working schedule, told how to dress, and made to perform a certain number of dances.
But settlements, although they can provide compensation for workers in the form of back wages and expense reimbursement, usually don’t provide clarity on worker status because companies often agree to a settlement only if they are allowed to continue treating workers like independent contractors. As part of the Uber and Lyft settlements, for instance, drivers remain independent contractors. In contrast, when a case is decided at trial, the court is allowed to rule on whether a worker is an employee or a contractor, which can lead to a worker receiving significantly more protections moving forward.
Misclassification lawsuits are typically filed in federal court under the Fair Labor Standards Act (FLSA), a federal law that guarantees employees the federal minimum wage and overtime pay for more than 40 hours worked in a week. Because many states have minimum wage and overtime laws that are more generous than federal laws, workers may also bring state-level misclassification lawsuits. In most wage and hour cases plaintiffs file in federal court under both federal and state claims.
Since wage and hour laws only apply to employees (and not contractors), the key determination in these cases is whether a worker is an employee or an independent contractor. The FLSA uses a six-factor “economic realities” test to determine whether an “employment relationship” exists. This interpretation centers on the degree to which a worker is economically dependent on the business of the employer. All of the factors are considered in each case, and no single factor is determinative by itself.
Some states have their own labor laws and tests that are used to determine employment status. California begins with the presumption that the worker is an employee and uses an 11-factor economics reality test adopted by the California Supreme Court. Massachusetts has adopted an independent contractor law with a stringent 3-factor test that requires businesses to overcome a “presumption” of employee status.
New laws may ultimately be needed to address employee misclassification and other worker issues in the fissured economy.
Most worker protection laws were drafted decades ago, when the economy was starkly different than it is today. The FLSA was passed in 1938, a time when the U.S. economy was manufacturing-based, children were working long hours in factories, and the minimum wage was 10 cents per hour.
Legal experts have noted how the FLSA—which only applies to “employees” working for companies with a minimum business volume of $500,000—has contributed to misclassification and the farming out of labor to smaller companies. These provisions create incentives for businesses to shed employees, designate others as independent contractors, and hire temps. They additionally have led employers to use holding companies, shell operations, franchises, and other creative structures to avoid wage and hour laws on the grounds that each entity is an independent employer that does not reach the $500,000 threshold. These same entities might argue that they don’t meet the requisite number of employees needed to comply with the Family Leave and Medical Act (FMLA).
A recent National Labor Relations Board (NLRB) decision on contract labor could make it more difficult for companies to avoid legal responsibilities through outsourcing. NLRB voted in August 2015 to adopt a more expansive definition of what it means to be a “joint employer,” which should make it easier for contingent workers to organize their labor under the National Labor Relations Act (NLRA), which applies only to employees.
The case arose when a Teamsters local union argued that bargaining wouldn’t be effective unless it was able to negotiate with both a recycling company and the temporary staffing agency that provides its workers. NLRB agreed with the union’s assertion that the larger company determined working conditions and therefore should be considered a joint employer, saying that “its previous joint employer standard has failed to keep pace with changes in the workplace and economic circumstances.”
Since 2007 more than a dozen federal bills addressing independent contractor misclassification have been proposed and dozens have passed at the state level
On the misclassification front, since 2007 more than a dozen federal bills addressing independent contractor misclassification have been proposed and dozens have passed at the state level, from the Northeast to the Mountain West to the Deep South.
The Payroll Fraud Prevention Act, proposed in 2013 and again in 2014, sought to make the intentional misclassification of employees a federal offense, amend the FLSA to include a new category of workers (“non-employees”), and require every employer to inform employees and non-employees of their legal rights. In 2015 Congress introduced the Independent Contractor Tax Fairness and Simplification Act, a bill that acknowledges the important role legitimates ICs play in the economy but limits the definition of IC under the safe harbor provision of the Internal Revenue Code.
Congressional paralysis makes IC legislation unlikely before the 2016 elections. States, on the other hand, have proven to be much more successful at passing laws designed to curtail employee misclassification.
Modernizing regulatory policies and laws is necessary in a new economy that in many respects bears no resemblance to the old economy. As the nature of work changes, government has to change, too.
However, the question must be asked: can governments keep pace with the rapid changes that technology and globalization have made possible…or are they destined to remain one step behind?
David Weil of the Department of Labor believes that, despite the complications a changing workplace poses, government still has an important role to play in establishing norms of fair treatment. Fairness, he says, is a basic human idea. When a business creates value but the people who do the work don’t share equally in the profits, as occurs in the fissured workplace, income inequality and a general sense of unfairness results, often with wider political and social implications.
But in an economy that is pushing people towards ever-greater autonomy, it’s equally important for workers to know their rights and be their own best advocate. It is workers who have lost the most from workplace fissuring. And it is workers who have the most to gain from ensuring they receive a fair day’s pay for a hard day’s work.
1. DOZENS OF WRESTLERS HAVE SUED THE WWE OVER CONCUSSIONS AND UNFAIR CONTRACTS.
In July 2016, more than 50 wrestlers filed a lawsuit against World Wrestling Entertainment, Inc. (WWE) alleging that the company had recklessly endangered its performers, concealed the dangers of head injuries, misclassified wrestlers as “independent contractors,” and neglected its own Talent Wellness Program (including neurological testing/the concussion protocol).
The plaintiffs included Jimmy “Superfly” Snuka, Road Warrior Animal, “Mr. Wonderful” Paul Orndorff, Chavo Guerrero Sr., Chavo Guerrero Jr., King Kong Bundy, Marty Jannetty, Sabu, Mark Jindrak, and referees Dave and Earl Hebner.
This isn’t the first time wrestlers have sought redress from the WWE, of course. In 2008, a trio of former wrestlers—Scott Levy (aka Raven), Chris Klucsarits (aka Kanyon), and Mike Sanders—filed a lawsuit against the WWE over their independent contractor statuses. (You can read the full complaint here.) Given their fulltime (and then some) hours and the exclusivity of their WWE contracts, they felt—justifiably—that they were owed basic insurance and retirement benefits.
But the following year, the judge threw the case out due to the statute of limitations. The WWE has proved somewhat Teflon in court, save Jesse Ventura winning $800,000 in 1991 for owed royalties (more on him later).
In April 2016, the NFL settled a $1 billion lawsuit with 20,000 retired football players who—like the 50 wrestlers who sued the WWE over concussions—felt their employer had misled them about the risks of repeated head trauma. The key difference is that those players were fulltime employees of the NFL, not independent contractors, and they had proof that the NFL had masked and downplayed the risks.
Still, the 2016 WWE suit was modeled after the NFL one (as was the NHL concussion lawsuit), and if the judge determines that the statute of limitations does not apply, as the plaintiffs argue, it could net the wrestlers some small measure of justice for their myriad health issues and titanic medical bills.
Regardless of how this case and others play out, the way the WWE treats its performers has to change. Their lives depend on it.
2. CHRIS BENOIT AND ANDREW “TEST” MARTIN HAD CTE.
Many chalked up WWE star Chris Benoit’s horrific double-murder/suicide to “roid rage”—a steroid-induced belligerence that is most likely a myth, as suggested by a 2014 study in the medical journal Addiction and the acclaimed 2008 documentary Bigger, Stronger, Faster*.
Dr. Julian Bailes—co-director of the Brain Injury Research Institute—told ABC News, “There’s no consensus in the medical community that this issue of ‘roid rage… even exists.”
Dr. Bennet Omalu is the world’s foremost expert on CTE (chronic traumatic encephalopathy), and co-director of the BIRI with Dr. Bailes. (He was the subject of the 2015 Will Smith film Concussion, in which Dr. Bailes was played by Alec Baldwin.) Dr. Omalu says that Chris Benoit’s unspeakable actions were driven not by steroids but by the untold blows to the head he received over his 22-year wrestling career.
One of Benoit’s signature moves was a diving headbutt off the top rope. He once told Chris Nowinski, a former wrestler and medical doctor whose own career was cut short by head injuries (among others like Daniel Bryan, Corey Graves, and Christian), that he had suffered “more concussions than he could count.”
Nowinski, too, recalls wrestling “with bad headaches, and in a fog every night.” After retiring from the sport, he founded the Concussion Legacy Foundation, through which he has collaborated with Dr. Omalu.
Dr. Omalu examined Benoit’s brain after his suicide and said it resembled that of an 85-year-old man with Alzheimer’s. Benoit was 40.
He also conducted an analysis of the brain of Andrew “Test” Martin, a former WWE wrestler who died at age 33 from an oxycodone overdose. Martin, too, showed signs of CTE.
3. THEY AREN’T THE ONLY ONES.
In a 2009 Outside the Lines story, Dr. Bailes said, “With Andrew Martin as the second case, the WWE and the sport in general have to ask themselves, ‘Is this a trend?’ The science tells us that jumping off 10-foot ladders and slamming people with tables and chairs is simply bad for the brain.”
In response, the WWE doubted the “veracity” of the tests, adding:
Dr. Omalu claims that Mr. Benoit had a brain that resembled an 85-year-old with Alzheimer’s, which would lead one to ponder how Mr. Benoit would have found his way to an airport, let alone been able to remember all the moves and information that is required to perform in the ring.
The dense denial of those remarks is astounding. The WWE seemed to suggest that Benoit was of sound mind when he murdered his wife and son and then hanged himself on a weight machine, with Bibles laid out next to his loved ones’ bodies.
At least 20 wrestlers have killed themselves, including Benoit, Chris Kanyon, Mike Awesome, Sean O’Haire, Crash Holly, Tojo Yamamoto, Yukon Eric, “The Renegade” Rick Wilson, and Kerry Von Erich. Many suffered from depression and other mental disorders symptomatic of CTE. Kanyon reached out to Chris Nowinski before he died, saying he’d had at least 12 concussions and felt they had impacted his mental health. Nowinski “would not be surprised if Chris [Kanyon] was suffering from CTE when he passed away.”
Kanyon and the other names above belong in the same category as former football players like Junior Seau, Andre Waters, and Terry Long—all of whom showed signs of CTE and its resulting mental disorders, and all of whom committed suicide.
In 2015, Jimmy “Superfly” Snuka, one of the plaintiffs in the concussion lawsuit, was charged with the 1983 murder of his girlfriend Nancy Argentino. But in June 2016, a judge ruled Snuka mentally unfit to stand trial. Snuka did not know what year it was, and could not name the current President. (He would be reevaluated later that year.)
Given the state of Snuka’s, Benoit’s, and Martin’s minds, and the never-ending rash of industry deaths and suicides, it’s no wonder that wrestlers like Mick Foley, Kevin Nash, Rob Van Dam, and Chyna (R.I.P.) have all pledged to donate their brains to science after they pass.
4. DANIEL BRYAN RETIRED BECAUSE OF CONCUSSIONS.
Over the past several years, the WWE (like the NFL) has overhauled its concussion policy. It has banned dangerous maneuvers like Tombstone Piledrivers and chairshots to the head. Wrestlers who experience concussion symptoms must pass an ImPACT test and be cleared by doctors before returning to the ring. (For example, in May 2016, “Certified G” Enzo Amore missed three weeks after suffering a concussion at the Extreme Rules pay-per-view.)
One superstar whom WWE doctors would not clear was underdog-turned-top dog Daniel Bryan. In February 2016, the 34-year-old Bryan shocked the world by retiring at the peak of his powers. He did so with tears soaking his beard, telling the crowd:
Within the first five months of my wrestling career, I’d already had three concussions. For years after that, I would get a concussion here and there… and it gets to the point when you’ve been wrestling for 16 years that it adds up to a lot of concussions.
Bryan, who has reportedly suffered seizures from his numerous head injuries, added, “Maybe my brain isn’t as okay as I thought.”
The WWE deserves credit for telling Daniel Bryan “No,” and for instituting a concussion protocol a la the NFL’s (if only for PR reasons). But questions remain about the aim and efficacy of that protocol, and the quality of company doctors.
5. THE WWE’S MEDICAL DIRECTOR DOESN’T THINK CTE IS A BIG DEAL.
The WWE’s Medical Director, Dr. Joseph Maroon, is infamous for downplaying the prevalence and gravity of CTE. (He is played by Arliss Howard in the film Concussion; it is not a flattering portrait.) He calls the issue “over-exaggerated” and says that riding a bike or a skateboard is more dangerous than playing football. Though Dr. Maroon made the right call with Daniel Bryan, in general it’s hard to believe that he will take concussions and CTE as seriously as he should.
In a jaw-dropping interview on The Art of Wrestling podcast, former WWE Champion CM Punk—who, like Daniel Bryan, retired early for his health—said that the WWE medical staff allowed him to wrestle with concussions and other serious injuries despite his pleas for treatment. Punk said that post-concussion syndrome brought him to his knees after many matches, “and I’m either puking for real or I’m just dry heaving because I don’t have anything in my stomach. I have no appetite. I don’t know what is up and what is down. I can’t sleep. I can’t f***ing train.”
During the 2014 Royal Rumble—not coincidentally, his last match in the WWE—Punk claims that he rolled into the corner of the ring and told the doctor he was concussed, and that the doctor essentially replied:
(The doctor in question, Chris Amann, sued Punk and podcast host Colt Cabana for defamation, seeking $1 million in damages. That case was scheduled to go to trial in June 2016 and presumably has been settled.)
Punk also said (in stronger/bluer terms) that the WWE’s concussion test is a joke, that he passed it when everyone knew he was concussed. He believes that the WWE’s and NFL’s much-hyped concussion protocols are simply PR moves: “WWE doesn’t do anything to protect the wrestlers; they do things to protect themselves.”