NLRB Rules That Scholarship Football Players At Northwestern University Are “Employees” Under The National Labor Relations Act With Right To Unionize; Northwestern Will Appeal

by Franczek Radelet P.C.

Earlier this week, NLRB Regional Director for Region 13, Peter Sung Ohr, issued a highly publicized decision and ruled that grant-in-aid scholarship football players at Northwestern University are “employees” under the National Labor Relations Act and, as such, have the right to unionize.

While the Regional Director’s decision directs an election to take place, we do not expect that an election will be scheduled until appeals are fully resolved. The parties have until April 9, 2014, to file a Request for Review of the Decision with the NLRB in Washington, D.C. Shortly after the decision was issued, Northwestern publicly confirmed that it plans to appeal the decision.

In determining that the scholarship football players are employees, the Regional Director stated that, in his view, the football players’ primary relationship with the University is economic. He also noted that between 2003 and 2012, the University’s football program generated approximately $235 million in revenue, which Ohr asserted the University was able to use at its discretion. The Regional Director further stated his belief that the evidence established that scholarship football players are recruited by the University because of their “football prowess,” not because of their academic achievement. Ohr characterized the scholarships that the football players receive as “compensation for the athletic services they perform” throughout the year. The Regional Director also described the “tender” that each scholarship player signs to receive his scholarship as an “employment contract” between the player and the University, which sets forth in detail the conditions of the “compensation” that will be provided to him.

Additionally, the Regional Director found that the players are under the University’s “strict and exacting control” throughout the entire year. He noted that football players are expected to adhere to detailed daily itineraries prepared by the coaches that specify “the location, duration, and manner” in which the players carry out their various football duties. Ohr further concluded that, unlike other students, football players are also subject to special rules, restrictions, and policies, including housing restrictions and mandatory study hall if they fail to maintain a certain GPA.

The Regional Director held that the NLRB’s decision in Brown University did not apply because he concluded that, unlike the graduate assistants in Brown, the football players’ football-related duties are unrelated to their academic studies. Even if Brown were applicable, the Regional Director stated that he would still have reached the same outcome. Purportedly applying the four factors outlined in Brown, the Regional Director concluded that the scholarship players are not primarily students, their athletic duties do not constitute a core element of their educational degree requirements, their athletic duties are not supervised by the University’s faculty, and their scholarships are not financial aid. Further, relying upon the NLRB’s decision in Boston Medical Center, in which the NLRB held that medical residents whose training lasts for a finite duration are not excluded from the Act’s coverage as “temporary employees,” the Regional Director held that the football players are covered employees despite only being “employed” by the University for a maximum of four years.

Finally, the Regional Director disagreed with Northwestern’s argument that the petitioned-for-unit of scholarship players is not an appropriate unit. Northwestern argued that walk-on players shared an “overwhelming community of interest” with the scholarship players and should therefore be included in the unit. But the Regional Director ruled that the lack of compensation for walk-on players was a substantial difference between the two groups of players. In making this finding, the Regional Director noted that, unlike the scholarship players, walk-on players do not have the potential to lose a substantial amount of money in scholarships if they stop playing football. Moreover, the Regional Director concluded that walk-on players cannot be considered employees because they do not receive “compensation” in return for playing football.

The issues raised by the Regional Director’s decision are likely to be litigated for years to come.

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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