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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.

Emergency Medical Response: What’s Your Plan?

[March 18, 2014] Envision this scary scenario: the school community is gathered around the field for the season-ending lacrosse game between rivals, when an 11th grader collapses on the field, in need of emergency treatment.  If there is no medical professional on-site, are members of the faculty or administration prepared to rush in and respond appropriately? Should they?

Many states have so-called “good Samaritan” laws on their books which exempt lay people from liability for good faith attempts at cardiopulmonary resuscitation (CPR) and other methods (defibrillation) to save a person’s life.  Nonetheless, independent schools will want to ensure that their own policies around the rendering of emergency medical care—for example, in student, employee, and athletic handbooks—reflect applicable state law and best practices.  For example, at the end of February, the Massachusetts legislature amended the Commonwealth’s good Samaritan law to broaden its applicability, so that anyone other than paid medical or emergency responders, may avoid liability for their acts and omissions (absent gross negligence or willful misconduct) when attempting to save a life.

Specifically, Massachusetts S. Bill 1993, which will take effect May 21, 2014, extends liability protection in civil suit for damages to any person, who in good faith and not for a fee, attempts to render medical care. The law had previously excluded protection for persons “whose usual and regular duties” included the provision of emergency medical care—meaning physicians, off-duty firefighters and police officers, and other persons trained in CPR, automatic external defibrillators (AEDs), or basic cardiac life support. Now, however, in Massachusetts, anyone may make a good faith response to an individual in need of medical attention without fear of liability.

Massachusetts follows other states, such as New Jersey and North Carolina, that had already passed similar “good Samaritan” laws granting immunity from civil liability for the use of AEDs in good faith during an emergency.  In fact, New Jersey not only provides immunity to the individuals rendering emergency care by use of AEDs, but also extends this protection to the person or entity providing or maintaining the equipment, the person or entity who provided training in CPR and use of the defibrillator, and the prescribing licensed physician.

Recognizing the importance of early medical response and appreciating the additional protection this amendment affords, independent schools may want to develop or update existing policies for emergency medical responses during school events. These policies may include establishing a response team, installing AEDs on campus with maps illustrating their locations, or implementing AED, CPR, and first aid training for employees and coaching staff.

Please do not hesitate to contact us if you have any questions about this information or need our assistance regarding emergency response protocols or other school crisis readiness policies and practices.

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.

Telling Stories

[July 18, 2013]  In a recent CLE panel with other attorneys and federal and state judges, we all agreed upon a critically important part of an attorney’s job — something that is written about less frequently perhaps than it should be, because it is just beneath the surface of conversations we have with clients every day:  We tell stories.

As the judges in this CLE panel talked through the relevant legal analysis, they kept coming back to the same simple point: Tell a story.  The judges wanted to hear a story. Something that makes sense and puts all of the facts and law in a coherent context.

We have been telling ourselves the same thing in the office every day, as we write memoranda of law, position statements, and outlines of an oral presentation (in court or otherwise).

Whether we are writing a summary judgment brief, a letter to opposing counsel, or are preparing an opening statement, we distill the facts of every case into a coherent, persuasive story in order to obtain the best results for our clients.

At Schwartz Hannum, telling stories is an important part of what we do.

Are Employers Penalizing Employees For Using Workplace Flexibility Policies?

[June 20, 2013]  A recent New York Times article provides some food for thought concerning whether workplace flexibility policies actually hurt employees instead of helping them.  The article reviews recent research studies examining negative effects on employees’ careers after they take parental leave, work reduced hours, or participate in other programs aimed at providing flexibility.

Is this happening in your workplace?  If so, how should your company handle this phenomenon?  Change the policy?  Change the culture?  Training?  … Or do nothing?

Of course, treating male employees differently as a result of their participation in such flex schedule programs, could result in a whole host of legal claims and employee relation problems, too.

If the attached article gets you thinking about your leave policies, please feel free to call us to discuss.

Employers: Proceed With Caution When Using Background Checks

[June 3, 2013]  The New York Times recently reported on a risky practice involving background checks:  many U.S. retailers are obtaining and using information about applicants’ past admissions of stealing on the job.

The Federal Trade Commission (“FTC”) is cracking down on this practice, examining whether the databases that contain this information comply with the Fair Credit Reporting Act (“FCRA”).  Key concerns include whether the workers are coerced into confessing, and whether they understand what they are signing or how it will be used.

Employers receiving such information as part of a background check should be cautious about using it as the basis for an employment decision.  The risks may greatly outweigh the benefits.

FCRA is being applied to new technology in other ways.  For example, on May 1, 2013, the FTC approved a settlement order in its first FCRA case involving mobile applications (“apps”).  Companies were selling apps that allowed users to access criminal records, without complying with FCRA.  The settlement order requires compliance in the future.

When considering using new hiring tools, employers should always consider whether such use complies with FCRA as well as any applicable state law (see our article about the Massachusetts CORI law here).

Facebook Evidence May Be Discoverable: Ask For It! (Preserve It!)

[May 13, 2013]  A federal judge in New Jersey recently sanctioned a plaintiff for deleting his Facebook account, which purportedly contained photographs and other information that contradicted his personal injury claims against the defendants.

The plaintiff had agreed, as part of discovery, to provide the contents of his Facebook account.  Instead, he deleted it.

As a sanction, the court agreed to provide a spoliation instruction at the trial, instructing the jury that it may draw an adverse inference from the plaintiff’s destruction of the evidence.

The decision serves as a reminder that employers should seek discovery of from the Facebook and other social media accounts of plaintiffs in employment litigation.  (Ask for it!)

It is also a reminder to businesses that they must ensure that their managers and other decision-makers do not destroy such evidence, if it exists.  (Preserve it!)

Schwartz Hannum Provides Pro Bono Services To Back Bay Businesses

[May 2, 2013]  As described in a recent Boston Business Journal (“BBJ”) article, Schwartz Hannum has volunteered, through the Boston Bar Association, to provide pro bono legal services to businesses affected by the Boston Marathon bombings.  Such businesses may face difficulty obtaining insurance coverage for property damage and business interruption, and may need to provide accommodations for injured employees.  Another issue flagged by Will Hannum in the BBJ article is whether workers’ compensation insurance will cover injured workers.

Emphasizing that this crisis presents unique challenges, Will explained to the BBJ:  “This is a situation in which [business owners and employees] are going to work together and get through it together.”  The goal for employers is to do so in a way “that will be in the employers’ best interest at the same time as the employees’ best interest.”

As reported in the ABA Journal, Will has also explained that businesses could “get themselves in trouble” if they take actions perceived as unfair, such as firing employees who are too upset to work.

Schwartz Hannum looks forward to assisting Back Bay businesses with practical, creative, and thoughtful solutions to these challenging issues.

Are Whistleblower Claims The New Retaliation Claims?

[April 26, 2013]  A recent New York Times article serves as a reminder that whistleblower claims seem likely to be one of the fastest growing types of employment law claims in coming years. They present employers with the same type of challenge that retaliation claims present: a coincidental chronology — (alleged?) complaint followed by termination — that will often get the case to the jury, regardless of the underlying merits; and where the jury will then decide the case based on factors (if not facts) known only to them. As a result, employers are well-advised to empower human resources and counsel to develop policies and training to mitigate their whistleblower risks.

Is Your Fundraising Raffle Legal?

For many independent schools and other non-profit organizations and charitable causes, raffles are a common and fun way to raise funds.  However, in most states, raffles are considered a form of gambling or gaming and, as such, are subject to state regulation.

Each non-profit organization should determine whether a raffle is permitted in its state and, if so, whether state-specific legal requirements apply.  Failure to do so could trigger an investigation by the state Attorney General (or other legal authorities) and expose the organization to a burdensome audit.  Read more

The Race Is On – Plan Now For Fiscal Year 2013 H-1B Visas

Beginning April 2, 2012, employers may file petitions for H-1B visas on behalf of foreign nationals who are employed in specialty occupations that require the application of highly specialized knowledge and completion of a Bachelor’s degree or higher in the specialty occupation, for start work dates of October 1, 2012 (the beginning of fiscal year 2013) (“FY2013”), or later.  The annual cap on H-1B visas is 65,000 (6,800 additional H-1B visas are reserved for citizens of Chile and Singapore pursuant to treaty obligations, for a total cap of 65,000 visas annually).  Notably, the annual visa cap does not apply to H-1B visa transfers or extensions, or to foreign nationals working for educational or non-profit research organizations that are exempt from the cap.  Read more

Lawsuits Challenging Status Of Unpaid Interns: On The Rise

The prospect of hiring volunteer interns is alluring.  But employers are learning the hard way that interns cannot be employed as volunteers, except in narrow circumstances.  Two recent lawsuits illustrate this trend—and underscore the importance of treading carefully when considering “hiring” anyone on a volunteer basis.  Read more.

Data Security Alert! March 1 Deadline For Service Contracts To Comply With Massachusetts Data Security Law

Entities covered by the Massachusetts Data Security Law (including employers outside of Massachusetts) must ensure that all third-party service provider contracts are fully compliant with the law by March 1, 2012, when a two-year grace period for pre-existing third-party service provider contracts will expire.  Thus, by March 1, all such contracts must include a provision requiring the service provider to satisfy the requirements of the law, regardless of the contract’s execution date.  Read more.

Trial Strategy Practical Tip: Errata Sheets Face Scrutiny

The Massachusetts Supreme Judicial Court (“SJC”) has established important new guidelines on the use of deposition “errata sheets,” which witnesses use to make corrections to their deposition testimony.  Most significantly, witnesses who make substantive changes to their deposition testimony may be required to justify those changes in a reopened deposition or at trial – and their lawyers may be subject to sanctions, including disqualification, depending on the nature and extent of the changes.  This case is a valuable reminder that witnesses must prepare thoroughly for all depositions.  Read more.

2012 Is Here! Time To Review And Update Your Employment Policies

This year, it is especially important for employers to review their employee handbooks to ensure that they are both legally compliant and up to date with current practices.  Numerous changes in federal and state employment laws have taken place over the past year and are slated to become effective in 2012, requiring employers to act now.  Read more.

Employers Must Act Now To Comply With The California Wage Theft Prevention Act, Which Took Effect On January 1, 2012

California Governor Jerry Brown recently signed into law the California Wage Theft Prevention Act (the “Act”), which imposes significant new obligations and potential penalties on employers.  Most significantly, the Act requires that California employers provide each new hire with a detailed written disclosure containing specific wage-and-hour information.  Read more.

Effective Harassment Policies And Practices Can Be An Employer’s Best Defense

With all of the cautionary tales about what can happen when employers don’t comply with employment laws, it is nice to hear about an employer whose compliance was rewarded. In Wilson v. Moulison North Corp., a recent opinion by the United States Court of Appeals for the First Circuit, the Court affirmed summary judgment for an employer that took appropriate precautions to prevent harassment in the workplace. In Wilson, the Court found that the employer had an appropriate policy against harassment, followed its policy, and as such, could not be found liable for the harassment of an employee.  Read more.