Question for a lawyer regarding Racers as Independent Contractors

EddieC
Posts
362
Joined
2/26/2012
Location
Temecula, CA US
Every since my first steps into the MX industry I have been told that Racers are Independent Contractors. As a business owner myself I have looked into hiring Independent Contractors and the rules are very specific to what is and is not considered and Independent Contractor.

Do these rules also apply to Professional Athletes/Racers?

Two scenarios
1. When I first started in this industry a TM for a factory team was looking to hire me on as the Team Athletic Trainer/Strength Coach. The TM has set aside the money and things where looking good until the Owner stepped in and said it was a NOGO because the riders being Independent Contractors could not be told by the team how to train, when to train or be who to see for evaluation and treatment of injuries.

2. Fast forward 15 years and now you have a situation where you have riders A&B training with a Trainer and both riders get picked up by a factory teams. Riders are told that the team has a TEAM TRAINER/RIDING COACH and that they the riders MUST pay for a portion of the Trainers/Riding Coaches salary and PAY BONUSES to said Trainer/Riding Coach. Both riders for monetary reasons can't afford to pay two trainers so they terminate their deal with current Trainer to pay for Team Trainer/Riding Coach.

I can understand if the team has the Trainer/Riding Coach on salary such as with most major athletic teams having Strength and Conditioning and Sport Medicine staff.

I know of a rider who rode for a factory team that was told he needed to pay a portion of the Team Trainers salary. The riders portion was half of his salary.

I am sure teams use the Independent Contractor status to avoid having to pay the additional costs associated with hiring employees.
Having worked with MLB players if they get injured they can go on Work Comp to pay for therapy which sounds crazy.

Not looking for legal advise just thoughts on the matter.

|
CarlinoJoeVideo
Posts
7358
Joined
11/30/2013
Location
Portland/Los Angeles, CA US
Fantasy
2361st
9/8/2016 11:34pm
It could be written into thier contract that they need to pay the trainer. If you are an independent contractor like these guys they have contracts that list what they can and can't do. Pretty simple.
endo
Posts
244
Joined
4/1/2008
Location
Sarasota, FL US
9/9/2016 5:30am
Not an attorney, certified paralegal. It is going to be different state to state, and basically the verbage in the contract will dictate everything.

The Shop

brocster
Posts
3610
Joined
6/9/2009
Location
Aliso Viejo, CA US
9/9/2016 6:24am
A rider is a independent contractor that provides a service to the employer per the agreed upon contract of both parties. From what I understand it is basically set up this way so that the employer doesn't have to pay employee taxes and provide benefits. The contract dictates everything which has a lot to do with why we see and hear what goes on with silly season... The give and take from each party gets down to splitting hairs thus the reasons for agents or a representative.

I am not a lawyer but have dealt with this on a first hand basis in another industry and I stay at Holiday Inn. Duhhrr!
mikec265
Posts
1669
Joined
10/19/2015
Location
Edinboro, PA US
9/9/2016 7:03am Edited Date/Time 9/9/2016 7:11am
They do it to avoid paying for workers compensation insurance. Its $8-9000 per year for the state minimum on myself as a truck driver. It's based off of a percentage of wages and risk of the job.

If a top rider made $500,000 salary
I don't see workers compensation costing less than $100,000 but I'm just a dummy typing from the couch.

As an independent contractor they should be able to buy occupational accident insurance for a lot less money. About $2000 a year in my case vs over $8000 if I was an employee.
mx_563
Posts
2064
Joined
4/1/2008
Location
CA US
9/9/2016 8:24am
tip of the iceberg as far as legal gray areas within the MX industry.
KirkChandler
Posts
1667
Joined
7/31/2015
Location
Oceanside, CA US
Fantasy
278th
9/9/2016 9:17am
Not a lawyer, but have dealt with the labor board and courts on employee/independent contractor issues.

The 2 questions they asked first were:
1. Did the independent contractor bring their own tools/equipment (computer/medical supplies/actual tools) to do the job?

2. Did the independent contractor set their own hours, and were they free to come and go?

As far as I can tell a motocross racer On a team doesn't bring anything besides their talent and experience. Their bikes are provided, their gear is provided.

And they don't really set their schedule, if the team is testing they need to be there, if there is a race they need to be there, if there is an autograph signing they need to be there.

Could be a sticky situation if someone wants to press the issue.
SPYGUY
Posts
2020
Joined
8/15/2006
Location
US
Fantasy
748th
9/9/2016 10:36am
I've also wondered about how motocross riders on teams can be considered independent contractors and have always wanted to make a post similar to this, I just never got around to it.

Like Kirk mentioned above, they don't supply their own "tools" and they also aren't allowed to ride other brands of motorcycles. If you are truly independent, you can work for as many different companies as you want, as long as you are able to fulfill the terms of your arrangement with each company.

SPYGUY
Posts
2020
Joined
8/15/2006
Location
US
Fantasy
748th
9/9/2016 10:44am
mikec265 wrote:
They do it to avoid paying for workers compensation insurance. Its $8-9000 per year for the state minimum on myself as a truck driver. It's based...
They do it to avoid paying for workers compensation insurance. Its $8-9000 per year for the state minimum on myself as a truck driver. It's based off of a percentage of wages and risk of the job.

If a top rider made $500,000 salary
I don't see workers compensation costing less than $100,000 but I'm just a dummy typing from the couch.

As an independent contractor they should be able to buy occupational accident insurance for a lot less money. About $2000 a year in my case vs over $8000 if I was an employee.
Not to mention the matching social security and medicare payroll and unemployment taxes employers must pay.

9/9/2016 11:14am
Am an attorney.

I think this article, Employee vs. Independent Contractor: Differences You Need to Know, provides a good overview of some of the factors that are being discussed.

While this issue is "squishy," in my opinion (and this is NOT legal advice), if you consider the true character of the principal (e.g, American Honda Motor Co., Inc.), the riders appear to be more like independent contractors than employees. For example, pet stores, like American Honda, are in the business of selling products. If a pet store were to hire bears (bears!) to ride in circles on bicycles in the parking lot for the sole purpose of promoting the pet store business, the bears would look, in my opinion, a lot like independent contractors. The bears don't manufacture the products sold in the store, nor do they participate in transactions to distribute them; the bears are simply hired for advertising purposes.
JBlain619
Posts
1719
Joined
6/10/2010
Location
Severna Park, MD US
9/9/2016 12:17pm Edited Date/Time 9/9/2016 12:21pm
I was told that KTM and Honda riders are actual employees of the company. Yamaha used to be when they had an "in House" team. I know that the Star Yamaha riders are Independent Contractors. I'm wondering if Yamaha will go back to employees with Coop and Reed now that they are in house.
NV825
Posts
1973
Joined
8/26/2006
Location
Carson City, NV US
Fantasy
2740th
9/9/2016 12:18pm Edited Date/Time 9/9/2016 12:20pm
This article on nolo.com is interesting as they state a lot of what teams are doing would contradict the riders as independent contractors.

Another interesting thing I thought of while reading it is that an independent contractor should be easily identifiable as a contractor and not as an employee of the company. Yet, as an example with a TV broadcast and even the posters the riders sign, you have the teams claim they are "America Honda's Ken Roczen" when really he's "Roczen Racing LLC's Ken Roczen".

Edit: my example may be wrong if JBlain619 is right about Honda having their rides be employees.
UpTiTe
Posts
7761
Joined
4/1/2008
Location
CA US
Fantasy
4109th
9/9/2016 12:45pm
What the teams do is 100% legit. An independent contractor provides a service to another business under terms of a contract. So yes, the team can put it in the contract to go to a specific trainer.

Although, I have no idea what team is making riders go to a specific trainer.
Krallang
Posts
198
Joined
6/21/2016
Location
Tonopah, NV US
9/9/2016 1:04pm
EddieC wrote:
Every since my first steps into the MX industry I have been told that Racers are Independent Contractors. As a business owner myself I have looked...
Every since my first steps into the MX industry I have been told that Racers are Independent Contractors. As a business owner myself I have looked into hiring Independent Contractors and the rules are very specific to what is and is not considered and Independent Contractor.

Do these rules also apply to Professional Athletes/Racers?

Two scenarios
1. When I first started in this industry a TM for a factory team was looking to hire me on as the Team Athletic Trainer/Strength Coach. The TM has set aside the money and things where looking good until the Owner stepped in and said it was a NOGO because the riders being Independent Contractors could not be told by the team how to train, when to train or be who to see for evaluation and treatment of injuries.

2. Fast forward 15 years and now you have a situation where you have riders A&B training with a Trainer and both riders get picked up by a factory teams. Riders are told that the team has a TEAM TRAINER/RIDING COACH and that they the riders MUST pay for a portion of the Trainers/Riding Coaches salary and PAY BONUSES to said Trainer/Riding Coach. Both riders for monetary reasons can't afford to pay two trainers so they terminate their deal with current Trainer to pay for Team Trainer/Riding Coach.

I can understand if the team has the Trainer/Riding Coach on salary such as with most major athletic teams having Strength and Conditioning and Sport Medicine staff.

I know of a rider who rode for a factory team that was told he needed to pay a portion of the Team Trainers salary. The riders portion was half of his salary.

I am sure teams use the Independent Contractor status to avoid having to pay the additional costs associated with hiring employees.
Having worked with MLB players if they get injured they can go on Work Comp to pay for therapy which sounds crazy.

Not looking for legal advise just thoughts on the matter.

Independent contractors are still required to abide by the agreed upon contracts an employee has.
disbanded
Posts
6103
Joined
8/26/2007
Location
Denver, CO US
Fantasy
1676th
9/9/2016 1:22pm
Let me start by saying I am not a lawyer, and let me finish there too.
EddieC
Posts
362
Joined
2/26/2012
Location
Temecula, CA US
9/9/2016 4:23pm
TripleFive wrote:
Am an attorney. I think this article, [url=https://www.legalzoom.com/articles/employee-vs-independent-contractor-differences-you-need-to-know]Employee vs. Independent Contractor: Differences You Need to Know[/url], provides a good overview of some of the factors that...
Am an attorney.

I think this article, Employee vs. Independent Contractor: Differences You Need to Know, provides a good overview of some of the factors that are being discussed.

While this issue is "squishy," in my opinion (and this is NOT legal advice), if you consider the true character of the principal (e.g, American Honda Motor Co., Inc.), the riders appear to be more like independent contractors than employees. For example, pet stores, like American Honda, are in the business of selling products. If a pet store were to hire bears (bears!) to ride in circles on bicycles in the parking lot for the sole purpose of promoting the pet store business, the bears would look, in my opinion, a lot like independent contractors. The bears don't manufacture the products sold in the store, nor do they participate in transactions to distribute them; the bears are simply hired for advertising purposes.
What if it was written in the contract that these bears had to do some testing of products sold at said pet store? The bears would have to report to a "secret" test facility and not told ahead of time how long he would be there.

What if the pet store had an in house bear trainer and it was written in the contract that the bears had to use and would also have to pay for the services of the store bear trainer?

What if the bears were told that the pet store will be providing the equipment for them to perform their duties ie. bicycles. The pet store limits the equipment to only what the pet store provides for riders to choose from.

What if the bears are free to use whatever uniform they want but all markings and placement of logos must first be approved by the pet store.

A lot of what ifs but from all the links people have been posting it looks like riders fall into the employee category.

EddieC
Posts
362
Joined
2/26/2012
Location
Temecula, CA US
9/9/2016 4:36pm
UpTiTe wrote:
What the teams do is 100% legit. An independent contractor provides a service to another business under terms of a contract. So yes, the team can...
What the teams do is 100% legit. An independent contractor provides a service to another business under terms of a contract. So yes, the team can put it in the contract to go to a specific trainer.

Although, I have no idea what team is making riders go to a specific trainer.
If the service the rider is to provide is racing a motorcycle that's fine but if the rider is asked to pay a trainer employed by the team how does that work? The part I am confused about is how the rider is being asked to pay for the trainer. If the team provided a trainer at no cost to the rider that would still be a grey area.

That would be like saying I am gonna hire you to do a job but your gonna need to see this guy to prepare you to do your job. Oh and by the way you need to pay him for his services.
500guy
Posts
12478
Joined
8/15/2006
Location
AZ US
9/9/2016 4:37pm
What if HRC was a different company than Honda , then they make the contract with the independent contractor with what ever stipulations Honda made them agree to ?
burn1986
Posts
9784
Joined
4/16/2010
Location
bossier city, LA US
Fantasy
3311th
9/9/2016 6:31pm Edited Date/Time 9/9/2016 6:33pm
TripleFive wrote:
Am an attorney. I think this article, [url=https://www.legalzoom.com/articles/employee-vs-independent-contractor-differences-you-need-to-know]Employee vs. Independent Contractor: Differences You Need to Know[/url], provides a good overview of some of the factors that...
Am an attorney.

I think this article, Employee vs. Independent Contractor: Differences You Need to Know, provides a good overview of some of the factors that are being discussed.

While this issue is "squishy," in my opinion (and this is NOT legal advice), if you consider the true character of the principal (e.g, American Honda Motor Co., Inc.), the riders appear to be more like independent contractors than employees. For example, pet stores, like American Honda, are in the business of selling products. If a pet store were to hire bears (bears!) to ride in circles on bicycles in the parking lot for the sole purpose of promoting the pet store business, the bears would look, in my opinion, a lot like independent contractors. The bears don't manufacture the products sold in the store, nor do they participate in transactions to distribute them; the bears are simply hired for advertising purposes.
I would say they are more like free agents. I'm assuming football/ basketball/ baseball/ soccer players are all independent contractors?
Skidaddle
Posts
1707
Joined
7/19/2016
Location
Woodland, CA US
9/9/2016 6:58pm
What do these guys get for the insane amount of money they pay?

For 150 bucks I know what I can get from a "trainer".

Post a reply to: Question for a lawyer regarding Racers as Independent Contractors

The Latest