Although it is not yet March, colleges and universities may nevertheless find themselves in the midst of a new kind of “madness” as they face the reality that certain collegiate athletes now constitute employees who can unionize under the National Labor Relations Act.

The NLRB Calls Foul 

On February 5, 2024 the National Labor Relations Board’s Region 1 issued a groundbreaking decision in Trustees of Dartmouth College, 01-RC-325633. Rejecting Dartmouth’s argument that the players did not constitute “employees” under the NLRA, the Region found Dartmouth’s men’s basketball team—a total of 15 student-athletes—to be an appropriate unit under the NLRA, and directed that an election be held.  Specifically, the Region concluded that Dartmouth’s right to control the “work” performed by the players, coupled with the “compensation” that the players received for this work, rendered them employees under the NLRA who were entitled to its protections including, without limitation, the right to vote on a union to serve as their collective bargaining representative. If successful, the Player’s Unit would be represented by the Service Employees International Union, Local 560, and would generally consist of all players on the men’s varsity basketball team, excluding only managers, guards, and professional employees and supervisors under the Act.

The Board’s Playbook on “Student Athletes”

This groundbreaking decision marks the latest development in the NLRB’s push to define certain players at academic institutions as “employees” under the NLRA. In September 2021, General Counsel Abruzzo issued GC 21-08, which reinstated guidance from 2017 and warned that institutions who misclassify statutory employees as “student-athletes” risk drawing a Section 8(a)(1) unfair labor practice charge. Under Abruzzo, the NLRB has sought to extend the Board’s holdings in Boston Medical Center and Columbia University, finding that the Section 2(3) definition of “employee” is subject to only few exceptions, which do not include players at athletic institutions.

The push to bring student athletes within the ambit of the NLRA is not new.  During the Obama Administration in 2015, the Board reviewed a bid by football players at Northwestern University who received grant-in-aid scholarships. The Board considered whether those players were employees subject to the NLRA, specifically weighing:

• Whether the athletes performed a service for the university and NCAA that generated a profit and/or conferred a benefit of publicity, goodwill, or other positive impacts that improved the institution’s reputation, thereby driving up student applications and financial donations;
• Whether the athletes received compensation in some form; and

• Whether the NCAA or the institution controlled terms and conditions of the athletes’ employment, including maximum number of practice and competition hours, scholarship eligibility, limits on compensation, minimum grade point average, and restrictions on gifts and benefits players could accept, and ensured compliance with those rules through its “Compliance Assistance Program”.

Northwestern University, 362 NLRB 1350, 1356 (2015). Ultimately, the Board unanimously declined to assert jurisdiction over the case, but, critically, reached no determination regarding whether the players were employees under the NLRA. The Board juked this issue by concluding that its asserting jurisdiction in this context would not promote labor stability across the conference as a whole given the nature and structure of the NCAA Division I Football. Specifically, while Northwestern was a private institution, the balance of the Big-10 conference consisted of state-run schools over which the Board observed that it lacked statutory jurisdiction. The Board cautioned that its decision was narrowly focused, leaving the door cracked for future reconsideration of this issue.

Abruzzo’s 2022 memo apparently pushed that door open, spurring the Regions to find a similar case to take before the Biden Board for reconsideration. In addition to Dartmouth, in May 2023 the NLRB’s Los Angeles Region issued a complaint against the University of Southern California, the PAC-12 conference, and the NCAA, alleging that these entities were joint employers of the football players, as well as players on the men’s and women’s basketball teams. The NLRB alleged that the three entities unlawfully misclassified college athletes as “student-athletes,” rather than employees, in violation of Section 8(a)(1). The hearing in this case began in November 2023 and will conclude in February 2024. Its outcome later this year could lead to further dramatic changes in the status quo for student-athletes under the NLRA.

The Dartmouth Play-by-Play 

Back on the east coast, Dartmouth did not face all of the same hurdles as Northwestern and the University of Southern California, largely because the Ivy League is composed mainly of private entities. Nevertheless, the petition that Dartmouth received from the varsity men’s basketball team back in September 2023 the Player’s Unit resulted in the Region concluding that the players could proceed to a unionization vote this week.

In reaching this conclusion, the Region found that:

• The players performed work which benefited Dartmouth by generating revenue for the University through broadcast rights, ticket sales, and driving alumni engagement and financial donations through meet and greets and exclusive events where the price for admission could be up to $5,000 per ticket;

• Dartmouth exercised significant control over the players’ work, including by requiring them to provide their services to Dartmouth exclusively. Tellingly, the Region equated the Student-Athlete Handbook to an employee handbook, in that it detailed tasks that athletes had to complete and the regulations they could not break. The Region also noted that Dartmouth determined when the players practiced and played, reviewed film, engaged with alumni, and took part in other team-related activities. When the basketball team participated in away games, Dartmouth determined when and where the players would travel, eat, and sleep.

• Perhaps the most concerning issue for other academic institutions, the Region found that the players—despite not receiving athletic scholarships—received compensation. As evidence of such compensation the Region cited the players’ receipt of an “early read” for admission prior to graduating high school; equipment and apparel each year that was valued in excess of $1000; tickets, lodging, and meals; and the benefits of Dartmouth’s “peak performance” student athlete program, which provided academic support, career development, sports and counseling psychology, sports nutrition, leadership and mental performance, strength and conditioning, sports medicine, integrative health and wellness, and sports science and innovative tech.

Critically, while the players did not receive compensation from Dartmouth in the traditional sense due to NCAA regulations, the Region nonetheless concluded that they were “compensated” in exchange for performing specific tasks, including practicing and attending games. This coupled with Dartmouth’s possessing and exercising the right to control the work performed by the players, led to the Dartmouth outcome.

The Season Outlook?

Whether the Dartmouth decision will impact other NLRB initiatives aimed at challenging the “student-athlete” designation across the country remains to be seen. The Board has not yet had a chance to reconsider its Northwestern University decision (wherein it ultimately declined to exercise its jurisdiction over the players at issue), regarding whether student-athletes are covered by the NLRA. However, an appeal in either Dartmouth could set the NLRB up to make a dramatic change in how student-athletes at institutions within its jurisdiction are treated.

As a practical point, the Dartmouth decision emboldens advocates for player units and may encourage additional unionization efforts in programs across the country. Athletic directors nationwide would be wise to carefully review the Northwestern and Darthmouth film – considering what union avoidance planning they have in place and whether implementation of additional training or planning would be prudent.  The best defense for other colleges and universities facing this issue is, truly, a good offense.  The Maynard Nexsen team stands ready to assist.