Legal Updates

Union Rights For Student Athletes? NLRB Decision Creates A Whole New Ball Game For Colleges And Universities

Football players for Northwestern University (the “University”) who receive grant-in-aid scholarships may vote for union representation under federal labor law, according to a recent, controversial ruling by the Regional Director (“RD”) of the National Labor Relations Board (“NLRB” or “Board”) office in Chicago.  The RD’s decision is under review by the full Board.  Meanwhile, the football players have voted in an NLRB secret-ballot election, with ballots impounded pending completion of the Board’s review.

If the Board lets the RD’s decision stand, and if in turn, the ballots show that the football players voted to unionize, then the University might refuse to bargain with the union.  This would force the union to file an unfair labor practice charge, the first step in a legal process that includes rights of appeal to the United States Court of Appeals and then to the United States Supreme Court.  (If, on the other hand, the players voted against unionization, then the legal process would end, but the players could seek another union election after one year.)

If allowed to stand, the RD’s ruling would be a “game changer” for many colleges and universities.  In this regard, union organizing campaigns targeted toward student athletes, followed by costly collective bargaining involving big-ticket demands, could become the norm.

Background

Earlier this year, a labor organization called College Athletes Players Association (“CAPA”) filed a representation petition with the RD.  The petition asked the RD to schedule a secret-ballot election for University football players receiving grant-in-aid scholarships (the “Players”) to determine if they wished to be represented by CAPA for purposes of collective bargaining with the University.

The University objected to the representation petition, primarily on the ground that its football players are not employees and, as such, do not have a right to unionize under federal labor law.  In this regard, the National Labor Relations Act (the “Act”) provides collective bargaining rights only to nonsupervisory “employees” of employers covered by the Act.  (In the educational realm, the Board generally (i) asserts jurisdiction over private and nonprofit colleges, universities, and other schools with gross annual revenue of $1 million or more; (ii) treats public educational institutions as exempt from the Act; and (iii) declines to assert jurisdiction over employees of religious organizations who are involved in effectuating the religious purpose of the organization.  Please note, however, that entities not covered by the Act may be covered by state labor laws.)

The University and CAPA (which, by the way, receives financial support from the United Steelworkers union) participated in an evidentiary hearing at the NLRB and then submitted briefs in support of their respective positions.  The briefs were forwarded to the RD for a decision.

The RD’s Decision

The RD concluded that the Players are employees of the University for purposes of the Act.  In reaching this conclusion, the RD applied the common-law definition of “employee.”  Under this definition, an employee is a person who (1) performs services for another, (2) under a contract of hire, (3) subject to the other’s control or right of control, and (4) in return for payment.  According to the RD, each of these elements was satisfied.

First, the RD found that the Players’ participation on the football team constituted “valuable services” to the University.  He noted that the University’s football program generated approximately $235 million in revenue between 2003 and 2012 through ticket sales, television contracts, merchandise sales, and licensing agreements.  According to the RD, the University “was able to utilize this economic benefit provided by the services of its football team in any manner it chose.”  The RD also reasoned that the Players’ services have resulted in a winning football program, which has had an “immeasurable positive impact” on alumni giving and the number of applicants for enrollment at the University.

Second, in the RD’s view, the “tender” that each Player was required to sign before the beginning of each scholarship period served “as an employment contract.”  The tender is a document providing detailed information about the duration of the scholarship and the conditions under which scholarship funds are to be provided.  Noting that the National Collegiate Athletic Association (“NCAA”) prohibits student athletes from receiving additional compensation or otherwise profiting from their athletic ability and reputation, the RD concluded that “the scholarship players are truly dependent on their scholarships to pay for basic necessities, including food and shelter,” making the tender all the more akin to an employment contract.

Third, the RD determined that the Players perform their services under the University’s “strict and exacting control” throughout the entire year.  In particular, the RD found that the University requires the Players:  (a) to commit 50-60 hours per week to football-related activities during a six-week training camp prior to the academic year; (b) to commit 40-50 hours per week to football-related activities during the “football season” portion of the academic year, despite NCAA rules purporting to limit such activities to 20 hours per week once the academic year begins; and (c) to abide by restrictions governing numerous aspects of their personal lives, including, among other things, their living arrangements, outside employment, and off-campus travel.

Fourth, according to the RD, “it is clear that the scholarships the players receive is compensation for the athletic services they perform throughout the calendar year, but especially during the regular season and postseason.”  In this regard, the RD noted that
“while it is true that the players do not receive a paycheck in the traditional sense, they nonetheless receive a substantial economic benefit for playing football” in the form of “tuition, fees, room, board, and books for up to five years.”  The monetary value of these scholarships, the RD found, was as much as $76,000 per year – and in excess of $250,000 in the aggregate – for many of the Players.

The RD rejected the University’s argument that the Board’s decision in Brown University, 342 NLRB 483 (2004), required a finding that the football players are not employees.  In Brown University, the Board ruled that “graduate assistants” who sought union representation were not employees within the meaning of the Act.  The RD distinguished Brown University as being premised on a finding that the graduate assistants were “primarily students.”  To the contrary, explained the RD, “it cannot be said that [the Northwestern University football players] are ‘primarily students’ who ‘spend only a limited number of hours performing their athletic duties.’”

Implications And Recommendations

If the RD’s ruling is allowed to stand, then student athletes who receive scholarships from colleges and universities are likely to become targeted for aggressive union organizing.  This means, in effect, that members of many collegiate football teams, basketball teams, and the like (i.e., student athletes whose teams require them to put in substantial hours and generate substantial revenues, as reflected in the RD’s first and third factors) could opt for representation by CAPA or other labor organizations and then proceed to demand collective bargaining with the institution.

What would the parameters be for collective bargaining involving student athletes?  This is far from clear.  CAPA’s website suggests that, at a minimum, protecting student athletes from injury and assisting with medical expenses would be areas of emphasis.  In this regard, CAPA contends that the NCAA denies having a legal duty to protect college athletes from injury; has failed to investigate and minimize concussion-related deaths; and ignores reports that coaches pressure athletic trainers to clear concussed players for action.  CAPA also wants to loosen restrictions on how and the extent to which student athletes may be compensated.

Educational institutions – particularly those that generate revenue through their athletic programs – are urged to monitor the Northwestern University case closely.  As the matter now stands, the prospect of union organizing campaigns in dormitories and athletic facilities; collective bargaining sessions with union-represented student athletes; and demands for big-ticket items such as guaranteed medical benefits for sports injuries is one step closer to reality.  Given what is at stake, the game plan for educational institutions should be to stay informed and, in turn, to be prepared.