We previously reported on General Counsel Jennifer Abruzzo's announcement of the National Labor Relations Board's (NLRB) gameplan to treat certain student athletes at private colleges and universities (together, "Academic Institutions") as employees protected under the National Labor Relations Act (NLRA).

On May 18, 2023, the NLRB advanced the ball by filing a Complaint against the University of Southern California (USC), the Pac-12 Conference (Pac-12), and the National College Athletics Association (NCAA) (collectively, the "Respondents") alleging violations of Section 8(a)(1) of the Act against all three Respondents for misclassifying the players of the USC football team and men's and women's basketball teams as student athletes rather than employees. The NLRB alleges that the Respondents' student handbook and social media policies intentionally discourage student athletes from exercising their alleged Section 7 rights under the NLRA.

How Did We Get Here?

This Complaint follows a clear pattern of major changes in the collegiate athletic landscape in the past decade:

• In 2014, the Board reversed the decision of a Regional Director to classify football players at Northwestern University as employees under the NLRA, citing concerns that asserting jurisdiction over a single team would not "promote stability in labor relations" across the college football landscape, comprising mainly state-run institutions. Northwestern University, 362 NLRB No. 167 (2014). This decision preceded GC Abruzzo's memorandum and came before a series of high-profile cases brought this issue back into the national spotlight.
• In 2021, the Supreme Court of the United States granted student athletes the ability to profit off their Name, Image, and Likeness (NIL) rights in NCAA v. Alston, 141 S. Ct. 2141 (2021). This decision did not classify student athletes as employees of their respective Academic Institutions, leagues, or the NCAA, but it nonetheless signaled a "professionalization" of student athletes over the objection of the NCAA.
• In February 2023, the Court of Appeals for the Third Circuit heard oral arguments from the parties to a class action lawsuit against the NCAA and a number of private and public Academic Institutions regarding whether student athletes can be considered employees under the Fair Labor Standards Act (FLSA) and are afforded all of the wage and hour protections provided by the FLSA. A decision is expected later this year.

These cases demonstrate a clear trend in the law toward the professionalization of student athletes over the past decade.

The NLRB Complaint

The Complaint alleges that Respondents are joint employers of students on the USC football team and both the men's and women's basketball teams, and that they have misclassified their student athletes in violation of the NLRA. The NLRB seeks to establish its joint employer argument by proving that USC, the Pac-12, and NCAA all exercised control over the terms and conditions of employment of USC's scholarship and non-scholarship/walk-on players on the football and basketball teams. Notably, the Complaint does not allege that any Respondent threatened, intimidated, or restrained any USC student athlete in the exercise of his/her Section 7 rights, and seeks only to reclassify these student athletes, referred to as Players in the Complaint, as employees of USC.

USC's Student-Athlete Handbook and Social Media Policy & Guidelines for Student Athletes dictate the manner in which student athletes present themselves in interviews and in social media postings. According to the NLRB, these policies have allegedly interfered with, restrained, and coerced player engagement in concerted activities protected under Section 7 of the Act, in violation of Section 8(a)(1) of the Act. However, the Complaint does not provide any specific allegations that any USC student athlete was prevented from taking any actions protected under the NLRA.

What Are the Implications for Academic Institutions?

The filing of this Complaint kicks off what will likely be years of litigation over this massive issue before a final decision is reached. The case will make its way through an administrative process at the NLRB before likely heading to the federal courts for appellate proceedings. The case will not be immune from politics. Currently, the Board maintains a Democratic majority, but that would likely change should a Republican win the 2024 presidential election, since the president holds the power to appoint Board members and the General Counsel when vacancies arise.

Despite the long road ahead, the seismic shift that this decision could bring to the multi-billion-dollar landscape of collegiate sports for both private and public Academic Institutions cannot be overstated.

At this point, the complaint raises numerous questions without any definitive answers. Would a decision to classify student athletes as employees result in widespread unionization, and, if so, which teams would be eligible for unionization? What about those students or teams that choose not to unionize? How would this impact higher education's ability to comply with requirements under Title IX? How would this decision impact the Name, Image, and Likeness rights that student athletes currently enjoy?

For now, Academic Institutions should be prepared for increased litigation on this topic, as the NLRB has officially entered the debate with this Complaint. Venable's Labor and Employment Group will monitor all updates on this Complaint and any similar complaints the GC brings against public Academic Institutions.