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

[April 24, 2014] 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 secret-ballot election has been scheduled to take place tomorrow, April 25, 2014.

The University has filed a request for review of the RD’s decision by the full Board. If the Board agrees to review the RD’s decision, then the Board could either (i) stay the election pending the outcome of its review, or (ii) let the election proceed, but with the ballots impounded until the review is completed.

If the Board lets the RD’s decision stand (either after review or by declining review), and if in turn, the football players vote 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 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 Web site 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.

NLRB Is Emphatic: Employers Can’t Ban Negativity!

[April 14, 2014] Employers often think, quite reasonably, that they may lawfully require employees to be positive at work.  Indeed, why shouldn’t employees be required to be positive with colleagues and represent the company in a professional manner?  Unfortunately, the National Labor Relations Board (“NLRB”) disagrees.  Repeatedly, the NLRB has concluded that such “no negativity” policies violate workers’ rights, whether union or non-union.

For example, on April 1, 2014, the NLRB held that a Michigan hospital’s work rules banning negativity and gossip violated the National Labor Relations Act (“NLRA”).  (This was not an April fool’s joke.)  The work rules contained in the hospital’s Values and Standards of Behavior Policy required employees to:

  • avoid “negative comments about … fellow team members,” including managers;
  • “represent [the hospital] in the community in a positive and professional manner in every opportunity”; and
  • “not engage in or listen to negativity or gossip.”

The NLRB concluded that the rules were too broad and could be interpreted by employees as prohibiting activity protected by Section 7 of the NLRA, which gives employees the right to engage in concerted activity.  The NLRB also rejected the hospital’s argument that the rules were lawful because employees participated in drafting them.  As a remedy, the NLRB ordered the hospital to immediately cease and desist from maintaining the challenged rules, give all current employees policy inserts reflecting the revisions, and post and distribute a notice to all employees about the ruling.

The next day, on April 2, 2014, the NLRB struck down similar rules in the employee handbook of a nationwide transportation management company.  That company’s rules prohibited employees from:

  • “discourteous or inappropriate attitudes or behaviors to passengers, other employees, or members of the public;”
  • participating in “outside activities that are detrimental to the Company’s image or reputation”; and
  • “conducting oneself during nonworking hours in such a manner that the conduct would be detrimental to the interest or reputation of the Company.”

The NLRB explained that employees could reasonably construe the rules as limiting their communications concerning employment, despite the presence of another provision in the handbook that notified employees of their union rights.  Unfortunately, the NLRB noted that the “savings” clause was not sufficiently “prominent” in the employee handbook or located in close proximity to the challenged rules.  As with the hospital case above, the NLRB ordered the employer to rescind the policies, provide handbook inserts to current employees to replace the policies, and distribute a notice about the ruling to all employees.

Many employers maintain social media and other policies similar to the policies at issue in these cases.  In light of the NLRB’s continuing focus on such policies, employers (whether unionized or not) should consult with experienced counsel to review their policies and consider whether any changes may be appropriate.

Status Of Federal Agencies And Courts During Government Shutdown

[October 4, 2013]  Many employers may have questions about the operational status of federal agencies and courts during the ongoing shutdown of the federal government.  Some current information of interest to employers is summarized below:

  • Department of Labor (“DOL”):  Most DOL offices, including the Employment and Training Administration (“ETA”) and the Wage and Hour Division, have suspended their operations.  Therefore, such matters as Labor Condition Applications, Prevailing Wage Determinations, Applications for Temporary Employment Certification, and Applications for Permanent Employment Certification will not be accepted or processed during the shutdown.  However, the Office of Workers’ Compensation Programs will continue to process certain types of benefits claims.
  • Equal Employment Opportunity Commission (“EEOC”):  The EEOC will continue to accept and process charges but will not investigate cases during the shutdown.  All mediations and federal sector hearings will be cancelled, and FOIA requests will not be processed.  Also, EEOC staff will not be available to answer questions or provide assistance to the public.
  • Federal Courts:  Currently, the federal courts remain open.  However, the federal judiciary will reassess the situation if the shutdown continues through October 15, 2013.
  • National Labor Relations Board (“NLRB”):  As all but a handful of the NLRB’s employees have been furloughed due to the shutdown, the agency’s regional offices have been closed, and the NLRB is not processing unfair labor practice (“ULP”) or representation cases.  Most filing deadlines will be tolled while the shutdown continues.  However, since the NLRB may not have the authority to extend the statutory six-month limitations period for filing ULP charges, the agency has recommended that ULP charges be faxed to regional offices if necessary to ensure compliance with the six-month filing requirement.
  • U.S. Citizenship and Immigration Services (“USCIS”):  Because USCIS is funded by user fees (rather than appropriations), the agency is continuing to operate.  However, the E-Verify employment eligibility confirmation system is unavailable during the shutdown.  Employers enrolled in the E-Verify program will be given additional time to create E-Verify records and resolve Tentative Non-Confirmations once the system becomes operational again.

Employers should be aware that this information may be subject to change, particularly if the shutdown is prolonged.  Thus, employers should closely monitor further developments in these areas.

NLRB Judge Enforces Right To Union Representation

[September 26, 2013]  A National Labor Relations Board administrative law judge recently ruled that DuPont Co. violated the National Labor Relations Act by failing to provide a union representative when a worker asked for one during an interview that led to his termination.  The case serves as a reminder of union employees’ so-called “Weingarten rights” to have a union representative present during any interview that may result in discipline.

DuPont conducted the interview as part of an investigation into the circumstances surrounding a workplace accident.  When the employee requested representation, the company told him he didn’t need it.

However, DuPont later terminated that employee’s employment because it believed he was dishonest during the interview.

The administrative law judge concluded that DuPont violated the employee’s Weingarten rights when it continued the interview after the employee’s request for representation.  The judge explained that DuPont should have given the employee a choice between continuing the interview unrepresented or having no interview, and ordered the company to cease and desist from violating any employee’s Weingarten rights.

We recommend that unionized employers remind all managers and other employees conducting internal investigations about the rights of union employees, upon request, to have a union representative present during any interview that may result in discipline.

NLRB Launches App: Why?

[September 4, 2013]  Last week, the National Labor Relations Board (NLRB) announced the launch of a new mobile app that purportedly informs employers, employees, and unions about their rights and obligations under the National Labor Relations Act (NLRA).

However, the app provides only a minimal description of the NLRB election process and the rights enforced by the NLRB.  It contains far less content than the NLRB’s website.

The app also provides contact information for NLRB regional offices across the country.  Perhaps that is the point – to help employees get in touch with the NLRB, and promote union organizing through greater NLRA-awareness?

The app is free for iPhone and Android users, and is currently available at the Apple App Store and on Google Play.

Will Hannum Weighs In On How To Draw The Line Between Tough Management And Harassment

[November 8, 2012] William E. Hannum III was featured in Dawn Lomer’s November i-Sight blog article on “How To Draw the Line Between Tough Management and Harassment.”  Click here to read Will’s recommendations for determining the difference between harsh management practices and harassing behavior, and view some examples of negative impacts of risky management styles.

NLRB Launches Webpage Describing Protected Concerted Activity

[June 19, 2012]  From the NLRB: “The [NLRB] made public a webpage that describes the rights of employees to act together for their mutual aid and protection, even if they are not in a union. The page, at www.nlrb.gov/concerted-activity, tells the stories of more than a dozen recent cases involving protected concerted activity, which can be viewed by clicking points on a map.”  (See NLRB Press Release at http://www.nlrb.gov/news/nlrb-launches-webpage-describing-protected-concerted-activity or by clicking here.)

New Massachusetts Criminal Background Check Requirements To Take Effect On May 4, 2012

[May 3, 2012]  Beginning May 4, 2012, new requirements will go into effect for employers that conduct criminal background checks on applicants – requirements that were enacted as part of the Massachusetts Criminal Offender Record Information Reform Law of 2010 (the “CORI Reform Law”).

The major provisions of the CORI Reform Law that take effect on May 4 require certain employers to follow certain procedural safeguards and have a CORI policy, as summarized below.  Currently, there is no regulatory guidance on these requirements, but the Department of Criminal Justice Information Services (“DCJIS”) in Massachusetts is expected to issue final regulations in the near future detailing and implementing these requirements.

Note: A separate portion of the Massachusetts CORI Reform Law, prohibiting most employers from including questions about criminal history on their initial job application forms, previously went into effect in November 2010.  Read More

NLRB Enjoins Poster Rule

“Important note: In light of conflicting decisions at the district court level, the DC Circuit Court of Appeals has temporarily enjoined the NLRB’s rule requiring the posting of employee rights under the National Labor Relations Act, which had been scheduled to take effect on April 30, 2012. In March, the D.C. District Court found that the agency had the authority to issue the rule. In April, the South Carolina District Court found that the agency did not. The agency will appeal the South Carolina decision. Regional offices will not implement the rule pending the resolution of the issues before the court.”

Click here to read more from the NLRB.