The esports industry is a breed apart. The novelty, dynamism, and creativity that have spurred its remarkable growth in recent years differentiate it from most other industries, but the legal landscape that this industry must navigate is, for the most part, the same landscape that other industries have encountered before. Therefore, the esports world must contend with myriad issues in the labor and employment world.
First, as we highlighted in 2019, one of the key labor and employment issues facing the esports industry is the classification of players as either employees or independent contractors. This issue is of particular concern for companies operating competitive esports teams and using the services of content creators. The employee/independent contractor classification (or misclassification) of players and content creators may have serious repercussions.
What makes a worker an employee, as opposed to an independent contractor, is a complicated question, and the answer to that question will vary from state to state. Some states, such as Texas, focus on several factors. Under this approach, factors like the employer’s right to control the work and the manner of payment are considered and weighed against each other, with an emphasis generally on the “right to control.” Other states, such as California, apply a stringent test called the “ABC” test. This test focuses on (1) whether the individual is free from the hiring entity’s control and direction (both as a factual...
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