Gimme A U-N-I-O-N!

by Gray Reed & McGraw

Willa Bepayed is a standout attacker and a Senior on State Tech’s volleyball team. Willa read about Kan Doit, the Southeastern quarterback who’s leading the unionization drive before the National Labor Relations Board (NLRB). Like Kan, Willa Bepayed and her teammates also routinely spend 40 to 50 hours a week on volleyball – a full-time job. She also contends that her commitment discouraged her from entering State Tech’s pre-med program. Can Willa Bepayed and her teammates form their own union and bargain collectively? If so, do they risk encountering negative consequences if they are permitted to unionize?

Not likely to unionize, in Texas. The NLRB decision is limited to private universities as public institutions are governed by state labor laws. And, given that 24 states, including most of the South, are right-to-work jurisdictions, the vast majority of major college football teams could not unionize as Southeastern may.

The NLRB Ruling. The football players contended that their receipt of grant-in-aid scholarships from the university made them “employees” within the meaning of the National Labor Relations Act (NLRA) and entitled to choose whether to be represented for the purposes of collective-bargaining. The university asserted that its football players receiving grant-in-aid scholarships are not “employees” but are more akin to graduate students whom the Board found not to be “employees.” Rejecting the arguments of the university, the NLRB’s regional director determined that Northwestern football players were employees, finding: (1) the football players were not primarily students; (2) their labors as football players did not connect to their studies; (3) academic faculty didn’t sponsor athletic endeavors; and (4) the scholarships were for football not academics.

So, who could unionize? Theoretically every scholarship team at Southeastern would be eligible (except walk-on players who receive no remuneration from the university). Apparently, every student athlete with a full or a partial athletic scholarship would have to be defined as an employee by the NLRB. How about the women’s volleyball team that has four scholarships divided among twelve players with each getting a partial scholarship? The band? the cheerleaders? The university orchestra? Arguably, anyone who receives a scholarship and is required to perform any activity for the university is a common law employee.

Pro-Union. The newly formed College Athlete Players Association, comprising the majority of Southeastern’s team, claim to seek better representation with the stated intent to address concussion overhaul, enhanced health coverage and education change from the more than $10 billion generated annually by Division I college athletics. The Department of Education reports that there are more than 140,000 Division I athletes throughout the United States who collectively receive more than $2 billion in athletic scholarships annually.

Pro-Student-Athlete. The NCAA argues that, while needing repairs, its organization can be remodeled without demolition and full reconstruction that otherwise risks impairing the education of the more than 10,000 student-athletes participate in 23 different March Madness related championships at all levels of the NCAA. Moreover, events like March Madness help the NCAA provide opportunities for more than 460,000 student-athletes to get an education, under the guidance of the world’s finest coaches and professors, and to become leaders on the field and off. One group of athletes is not more hardworking, more dedicated or more driven than another. Unionization will create unequal treatment not only among student-athletes competing in different sports, but, quite possibly, even among student-athletes on the same team.

Unintended Consequences?

Title IX? What about the difference in value of employees and their respective unions? The Southeastern men’s football union creates greater value than the Northwestern women’s swim team union, for example. Would it be legally permissible for the football team to collectively bargain for more than the women’s swim team? Title IX specifically forbids this from happening — all scholarships have to be equal between the sexes.

IRS Implications? Redefining a “student-athlete” to an employee could change the way the IRS classifies scholarship income. If athletic scholarships are considered compensation for work, the IRS would at least explore taxing that income. And for a football player at Southeastern — where tuition, room and board cost $61,000 — that might mean a $15,000 tax bill. Section 117 of the code says scholarships do not qualify as gross income for any individual who is a candidate for a degree at a school or university. But that exclusion does not apply to any amount received as payment for services required as a condition for receiving the scholarship. Though the NLRB ruling asserts that grant-in-aid athletic scholarships are not financial aid, the IRS ruled in 1986 that athletic scholarships should be treated the same way as academic scholarships in terms of tax liability.

Title VII? As employees, college athletes would be covered under Title VII of the Civil Rights Act, which prohibits employers from discriminating based on race, religion, gender or national origin. That means universities could be subjected to harassment lawsuits and hostile work environment claims that currently have little merit.

See prior Tilting article – You Have the Right to Vote MY WAY: Can Companies Influence their Employee’s Vote? (2012)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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