JACO, while I respect your position, you're not really giving this an even-handed approach.
- WotC has intentionally structured their organized play program so that they do not run most of the tournaments (outside of Pro Tours), so if there was any kind of employee/employee relationship it would be between the judge(s) and the tournament organizer (let's say SCG, Channel-Fireball, etc.). The change in judge Foil compensation and so forth was to help clarify their stance on this issue. Your local gaming store and the regional tournament organizers are the ones paying judges (by whatever labor agreement they come to).
I'm sure all of that is true, from Wizard's perspective. But, just because you strive to set up a relationship that falls outside of the definition of "employment" does not mean you always succeed. It depends on the particular kind of relationship. I would assume that WOTC attorneys have already vetted the relationship and set up something they believe will pass muster, but it's very hard to stay on top of shifting law in a state like California. Even worse, all your best laid arrangements can sometimes mean nothing if the "worker" themselves is disputing what the relationship actually was.
- Most people would consider judges, Uber drivers, and other part time ad hoc workers as contractors.
Would they? To begin with, obviously reasonable minds can differ on this. Uber, for instance lost a motion for summary judgment where they contended basically this. (They did then settle the lawsuit before a jury got to decide.)
You have to be careful making sweeping generalizations about what is an employee and what is not. For instance, suggesting that all "part time and ad hoc" workers are not employees would exclude temp workers or part time workers. Courts do a more holistic analysis of the facts of the relationship when they look at it.
- Concurrently, the NLRB under Obama's direction...
You lost me here, when your post started to read more like a political diatribe than a reasoned opinion. Here, you started using words like "bogus precedents," call the case "wackass," suggest that WoTC is "clearly in the right," and so on. In an effort to bring more moderation to the discussion, let me explain the situation as I see it (as someone who litigates this issue on both sides in my state):
I have observed a push by state agencies (in non-liberal states) towards reclassifying workers as employees. Locally, this started around the time of the recession in 2008, when the state unemployment insurance office started hemorrhaging money due to all of the people being out of work. It appears to me that the agency beefed up its enforcement wing substantially to recoup the losses and has been pushing hard ever since.
The way the agencies view it, they are not trying to "push a libru'l agenda on 'merica" or anything like that. They see themselves as trying to fight a business system that has evolved to try and escape regulation through artificial structures designed to make what would at first blush look like an employee -- the person who actually does the work your business gets paid to do, under the company's direction and control -- into an independent contractor. Sometimes, like for small contractors, this is done out of ignorance or because the worker sees a bigger paycheck if they get a 1099 instead of a W-2. For more sophisticated businesses, like FedEx or trucking companies, this is a very specific plan designed to minimize the business' costs or liability exposure.
It's not "clear" at all which side is in the right here. I have seen and dealt with many businesses who have very deliberately designed a relationship to try to escape the normal protections workers enjoy. I have also seen businesses who legitimately need to hire contractors and not employees (for example, where the workers are doctors or other licensed professionals who need to exercise independent judgment.) It depends on the context.
The reason I find this case so fascinating is that I have not yet encountered a situation where someone is freely engaging in a leisure activity, but in an authoritative role, and considered when that would cross the line into employment. Consider: are sports referees employees? At the professional level, I bet they are. What about people who volunteer to ref at a Little League game? Or parents who run a Cub Scouts Den? There's probably cases out there on this, but I have not read them yet, so I look forward to learning more about where the line is.
So are these clowns going to pay back taxes for all the product if they win? Or is being paid in barter somehow tax exempt?
Tax advice is a tricky thing and you need to pay a lot of money to get it from someone who will review the particulars of each situation. In general, however, the IRS will tax income from any source, including litigation, absent certain exceptions.