Those who judge duels of spells and monsters have convened in joint purpose—to sue Wizards of the Coast for failing to pay them. Wizards of the Coast (Wizards) is a Hasbro subsidiary who owns the most popular collectible card game in the world—Magic the Gathering. Magic the Gathering (Magic) has attracted a substantial competitive community and tournaments are held with some regularity. These Magic tournaments are moderated by judges certified by Wizards, resolving rule disputes and performing other functions.
Recently, several of these judges filed a complaint against Wizards on behalf of themselves and all other judges. The class action lawsuit alleges that the judges are employees of Wizards and that Wizards has—among other things—failed to pay them for their services. The lawsuit seeks damages of over $5M.
Judges in Magic the Gathering
In order to become a Magic judge, a person needs to register with Wizards and pass a multiple choice test provided by Wizards.
The requirements of being a judge and maintaining judge status are set by Wizards and vary based on a judge’s level—1 to 5. These duties and requirements include documenting Magic gameplay at events and tournaments, working at least 25hr/month per judge level, and regular testing. The advancement from level 2 judge to level 3 and beyond requires substantial testing and interviews. The testing is all handled by Wizards. Wizards can also unilaterally revoke judge status whenever they feel like it.
Up until recently, judges have been reimbursed for their work—often over 12 hours in a day—with specialized promotional Magic cards available only to judges. These cards can be worth anything from $200-$800. However, Wizards has discontinued this practice, perhaps out of fear that it makes judges seem more like employees. Currently, judges do not receive anything for their service and are not provided meal breaks, rest breaks, or expenses for working events.
Wizards has historically treated judges like volunteers—enthusiastic members of the magic community whose donated time is much appreciated. While this is not explicitly argued in Wizard’s press response to the judge’s lawsuit, it is heavily implied. The release states that “fans choose to become judges out of a sincere love of the game and as a way to enjoy their favorite hobby. They ensure events are fair and fun, and we appreciate everything they do.”
It’s not surprising that Wizards is only implying that the judges are volunteers, as the assertion doesn’t have a legal leg to stand on. Federal law clearly establishes that for-profit, private sector companies cannot take advantage of volunteer labor. Wizards, a for-profit subsidiary of one of the largest for-profit toy makers in the world, certainly cannot accept volunteer labor.
So if the judges can’t be volunteers, the question becomes what are they? The judge’s complaint alleges, that they are employees. However, Wizards will certainly argue that they either have no relationship or are independent contractors.
In their press response, Wizards argues that the judges’ class action lawsuit is meritless because most judges do not work at tournaments run by Wizards. In fact, only a very small number of the highest tier Magic tournaments are organized and handled by Wizards itself. The majority of tournaments are set up by local stores and event organizers. Unfortunately for Wizards, this doesn’t matter.
Less than a year ago, the National Labor Relations Board issued a ruling that changed the way employment functioned—preventing an employer from avoiding employer obligations by hiring through a labor supply contract or temp agency. This case, Browning Ferris Industries, found that multiple employers can act as joint employers (with all the responsibilities that come with that relationship) where (1) the entities are employers within the meaning of the common law; and (2) the entitles share or codetermine those matters governing the essential terms and conditions of employment.
Wizards controls a great deal about the conditions of a judge’s employment at any tournament—even tournaments run by local stores. They set the rules, they set the tests to determine whether or not you can be a judge in the first place, Wizards often schedules and regulates events. Much of the time, Wizards even determines the “format” of an event—what kind of tournament will be held. Wizards has a substantial hand even in tournaments it doesn’t directly run—meeting the second requirement of the Browning test. All that remains is to determine whether Wizards has an employer-employee relationship with the judges or if these judges are independent contractors.
Independent Contractor v. Employee
Independent contractors make contracts with a business to perform a specific type of work, usually for a limited period of time. Employees work under the direct control of an employer, with the employer controlling the terms, conditions, and tasks of the employee. Independent contractors are not protected by most employment laws—including minimum wage and overtime laws. If Wizards could establish that the judges are independent contractors, they’d be off the hook.
The tests to determine whether somebody is an employee or independent contractor vary substantially throughout the country and sometimes have as many as 21 different factors to consider. However, the tests all boil down to the same thing—the level of control the potential employer has over the would-be employee. The tests look to who decides how, when and where a person does their work.
Taken as a whole, Wizards certainly has a substantial amount of control over the judges. The testing to become a judge, combined with Wizards’ retaining the ability to unilaterally revoke any judge status, represent substantial involvement in judge training and close supervision of individual judges. Wizards sets all the rules that the judges enforce. Alongside private vendors, Wizards schedules many—but not all—of the tournaments the judges work at and even assign judges to tournaments sometimes. All of this supports the judges’ argument that they are unpaid employees and Wizards is their joint employer with the local tournament organizers they work with.
What Will Wizards Do?
Unsurprisingly, the judges seem to have the rules right. Even if there is a colorable case on the part of Wizards that the judges are independent contractors—it certainly isn’t looking good for them. A jury determination that all the judges are employees would be a costly loss for Wizards and would leave them with a sticky situation in dealing with their judges going forward. While Wizards has publically stated that they believe the judges’ class action suit to be meritless, it seems likely that a settlement may be forthcoming in order to avoid a court ruling the judges are employees. This would be quickly followed by a serious restructuring of their judge program.