By Gerald L. Maatman, Jr. and Sean McConnell
Duane Morris Takeaways: On March 20, 2024, a regulatory filing by UFC parent company, TKO Group Holding Inc., revealed that TKO will pay $335 million to settle a class action brought by MMA fighters who alleged that the UFC engaged in anticompetitive conduct to suppress the fighters’ wages in Le v. Zuffa, LLC, No. 2:15-CV-01045 (D. Nev. 2024). The parties had engaged in mediation last month prior to the start of trial scheduled for April 15, 2024. Earlier this year, Judge Richard F. Boulware II of the U.S. District Court for the District of Nevada denied Defendant’s motion for summary judgment and declined to exclude two of Plaintiffs’ key experts. Id. (D. Nev. Jan. 18, 2024). The Court had also certified the class on August 9, 2023.
Le v. Zuffa has been closely watched in the antitrust space and the trial was much anticipated as it was the first labor monopsony case ever. The prior rulings in the case are required reading for any corporate counsel handling antitrust class action litigation involving wage-suppression issues. The announced settlement underscores the risks and exposures emanating from this type of antitrust claim.
Case Background
Plaintiffs are current or former UFC fighters. Defendant Zuffa, LLC does business as the UFC and is the preeminent MMA event promoter in the United States.
Plaintiffs alleged that UFC used exclusive contracts, market power, and a series of acquisitions to suppress wages paid to UFC fighters during the class period by up to $1.6 billion. Plaintiffs filed suit in December 2014 and defeated UFC’s motions for partial summary judgment in 2017.
In February 2018, plaintiffs moved to certify two classes. The Court granted the motion and certified a class consisting of all persons who competed in one or more live professional UFC-promoted MMA bouts taking place in the United States from December 16, 2010 to June 30, 2017. In light of the class certification, Defendant renewed its motion for summary judgment and moved to exclude expert testimony. The Court struck two of Defendant’s motions to exclude and denied summary judgment. The case was scheduled to start trial on April 15, 2024.
Class Action Settlement Announced
The settlement, which will be paid out over an unspecified amount of time, resolves all of the antitrust wage-suppression claims against the UFC and avoids the risks associated with trial.
The parties will still need to present the settlement to the Court for preliminary and final approval pursuant to Rule 23.
Implications For Employers
Le v. Zuffa was a significant labor antitrust class action.
The settlement underscores the ability of workers to use antitrust law to tilt labor market dynamics in their favor and to increase workers’ bargaining leverage for greater compensation and benefits.