Not Yet Clear Whether Connecticut Investigation of WWE Is Wide-Ranging and Significant

Connecticut Labor Department attorney Heidi Lane and spokesman Paul Oates have talked me through some of the intricacies of state law with respect to the current reported state audit of World Wrestling Entertainment.

I reemphasize that the department does not itself say that WWE is under investigation. That is my own independent conclusion, though a fair one – since the company itself revealed it in the course of Linda McMahon’s unsuccessful Senate campaign against Richard Blumenthal, other sources confirm it, and Oates “neither confirms nor denies” it.

Questions still remain with respect to the size and scope of the audit, and how and to what extent the public will become aware of its outcomes.

The investigation is being conducted out of the department’s Unemployment Insurance Tax Division, which I am informed is prohibited from disclosing information concerning individual employers.

Lane explained to me that there are several different laws in Connecticut dealing with misclassification of employees. WWE is not a target of a potential “stop work order” – a category created by statute in 2007 to thwart employers who knowingly misrepresent employees as independent contractors or provide false, incomplete, or misleading information to an insurance company on the number of employees for the purpose of paying a lower Workers’ Compensation premium.

A new law, passed earlier this year and stemming from recommendations of the Joint Employee Commission on Misclassification, increased the penalties for failure to have Workers’ Compensation for employees. That took effect in October.

Lane told me: “The Unemployment Insurance Tax Division in the course of its everyday functions performs thousands of audits yearly and hundreds of them concern misclassification issues. Misclassification investigations are started in a number of ways. If an individual files a claim for unemployment benefits and he or she does not have wage credits because their employer treated them as independent contractors instead of employees, the division will undertake an investigation to determine if the claimant is an employee or independent contractor. At times, these investigations may turn into full audits of the company.This division is also responsible for performing random audits pursuant to the federal requirements.”

In the case of WWE, I believe the investigation flowed from a “random audit.” Lane said the UI division has received three specific “referrals” for investigations, and earlier said that there have no Form DOL-83 referrals (a recently enacted procedure) listing World Wrestling Entertainment.

If an administrative ruling or negotiation conducted within the state government bureaucracy were to lead to a structural change in WWE’s practices – that is, if wrestlers stopped being classified as independent contractors and started being called employees, with employee-level benefits – then I’m sure we’d all know about it quickly. That is not the kind of secret that could stay hidden long from the pages of the Wrestling Observer Newsletter or Pro Wrestling Torch.

Short of such an outcome, however, I’m not sure what would be accomplished.

A month from today Richard Blumenthal, the attorney general, will become Connecticut’s junior United States senator, and at that point any involvement on his part in the state probe would officially become informal. (Blumenthal already has said that he had nothing to do with the state audit.) My view is that, in terms of both transparency and substance, his implied obligation to the voters to look into reform of the pro wrestling industry’s occupational health and safety standards goes beyond whatever is happening right now in discussions between the Connecticut Labor Department and WWE’s lawyers.

Irv Muchnick