NLRB Ruling on Northwestern Football Players Highlights Need for Congressional Action on College Sports

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In August, the National Labor Relations Board (NLRB or "the Board") unanimously ruled that it lacked jurisdiction to decide whether college football players at Northwestern University are "employees" under the National Labor Relations Act. The highly anticipated decision ended the players' nascent effort to form a union and reignited a long-running debate over how to bring about meaningful reform in major college sports. The NLRB's reluctance to intervene based on the conditions at a single school, though sensible, underscores the difficulty of enacting sweeping change in such a fragmented industry and the need for action by Congress to bring about genuine, comprehensive reform.

The NLRB Punts on Whether Scholarship College Football Players Are Employees

The NLRB's decision1 overturned a 2014 ruling by NLRB Regional Director Peter Ohr that Northwestern's scholarship football players are employees of the university with the right to bargain collectively. Ohr had concluded that the players are employees because they perform services for the benefit of the university in exchange for compensation in the form of grant-in-aid scholarships. Ohr also gave significant weight to the fact that football players must abide by strict rules and policies set by coaches, the Big Ten Conference and the National Collegiate Athletic Association (NCAA), as well as the significant time commitment associated with playing football at Northwestern.

On appeal, the Board expressly declined to answer the central question of whether scholarship athletes are employees, stating in a footnote that the question "does not have an obvious answer." Instead, the Board went to great lengths to explain why the case was novel and unique and why asserting jurisdiction over it would "not promote stability in labor relations." The Board noted that it had never been asked to assert jurisdiction over a case involving college athletes or presented with a petition for representation by a college team or teams. It also found that college athletes "do not fit the analytical framework" used in labor cases involving other types of students—such as graduate student assistants or student janitors—or involving professional athletes.

Although the NLRB went out of its way to avoid taking a definitive stance on the key issues, its reasoning for staying out of the fray was sound. The Board observed that a ruling that football players at a single school have the right to unionize would necessarily affect hundreds of unrepresented students at other schools throughout the country. This is especially problematic because, as the decision noted, only 17 of the 125 schools competing in the Division I Football Bowl Subdivision (FBS) are private institutions subject to NLRB jurisdiction. The remaining schools, including the other 13 schools in the Big Ten, are public universities immune from NLRB rulings. In fact, some of those schools are subject to state labor laws expressly prohibiting collective bargaining for public employees. And some states, including two states that operate three schools competing in the Big Ten—Michigan and Ohio—have enacted statutes specifying that scholarship athletes are not employees and cannot unionize. Given the "inherent asymmetry of the labor relations regulatory regimes applicable to individual teams," the NLRB sensibly determined that asserting jurisdiction "would not promote stability in labor relations." Still, the Board was careful not to rule out reconsidering the question in the future should circumstances change, whether as to students at Northwestern, another school, or all private schools competing in FBS.

The Limits of Piecemeal Action, and the Need for Congressional Intervention

The NLRB ruling preserves, for now, the NCAA's tenuous and heavily criticized stance that college football players, who generate millions of dollars for their schools, are amateurs not entitled to profit from their labor. But in the absence of a more comprehensive effort led by the federal government, actions like the Northwestern petition and ongoing antitrust class actions2 challenging NCAA restrictions on college athletes' ability to earn remain the most effective method for pushing the NCAA towards reform. In reaction to the NLRB ruling, representatives of the College Athletes Players Association (CAPA), the organization that sought to represent the players, were quick to point out that the case had helped spur significant policy changes within the NCAA.3 Indeed, just months after Regional Director Ohr's initial ruling, the NCAA altered its governance structure to grant the five most powerful conferences greater flexibility to enact rule changes applicable only to schools within those conferences.4 In January 2015, the so-called "Power 5" conferences5 used this new authority to enact a set of reforms, including permitting schools to increase the value of scholarships by providing stipends to cover the full cost of attendance and requiring schools to provide guaranteed scholarships regardless of a student's athletic performance.6 The Power 5 conferences also enacted reforms designed to address concerns over player safety, including head trauma. Although the NCAA did not directly credit the Northwestern petition for helping to bring about the changes, the reforms addressed the types of issues that motivated CAPA's unionization effort in the first place.

Still, the NLRB ruling underscores the limits of such a piecemeal approach. Those advocating that the NLRB declare student athletes to be employees tend to overlook the complications that such a ruling would undoubtedly cause. As the Board noted, because it lacks jurisdiction over public schools, a ruling for the Northwestern football players—or even football players at private universities generally—would have established an incongruous regime where only students at a small minority of schools in certain states are allowed to bargain for rights. The NLRB's denial of jurisdiction rightly acknowledged the impracticality of seeking to impose universal change upon such a disparate association—125 public and private schools of varying size and stature in dozens of conferences across 50 states, each with its own unique labor law regime—through a single ruling involving a single institution.

Instead, those advocating for change should focus their efforts on convincing Congress to take up the economics of college sports. Congress is already heavily invested in higher education through federal research grants and student loan programs, and could use the supremacy of federal law to supersede both the public-private distinction and the patchwork of state labor law regimes that thwarted the NLRB. This suggestion is hardly new. In declining jurisdiction, the NLRB cited a lack of "explicit congressional direction" on the subject of college sports, and in her O'Bannon decision, Judge Wilken noted that Congress is better suited to undertake reforms and remedies to the NCAA's alleged antitrust violations than the courts.

In response to these calls for action, lawmakers have begun taking steps towards intervening. In June, five members of the House of Representatives reintroduced the National Collegiate Athletics Accountability Act, a bipartisan bill that would, among other things, require schools to guarantee four-year scholarships regardless of injury or athletic performance, require annual baseline concussion testing and provide greater due process rights for schools and athletes charged with NCAA infractions.7 Perhaps most significantly, the bill would establish a Presidential Commission on Intercollegiate Athletics tasked with reviewing a number of issues and submitting findings and recommendations to the President and Congress. The bill's proponents have aimed to tie it to an upcoming reauthorization of the Higher Education Act, which provides the foundation for federal funding of college education through student aid. The Obama administration has also signaled an interest in participating in any reform efforts. In January, administration officials hosted NCAA officials and athletic directors at the White House for a meeting about the future of college sports.8 And in March, President Obama criticized the NCAA and its members for inadequately protecting their student athletes and endorsed the idea of guaranteed four-year scholarships.9

For its part, the NCAA has ramped up spending on congressional lobbyists, fueling speculation that the NCAA will seek an antitrust exemption to preserve the concept of amateurism.10 Although an antitrust exemption would seem to contradict the increased accountability being sought by members of Congress, some commentators believe these competing interests could form the basis of a compromise that brings about significant reform in how college athletes are compensated and simultaneously protects the NCAA from the threat of potentially crippling litigation like the Jenkins case.11

Even if such a grand bargain is years away (or an outright fantasy), the creation of a Presidential Commission on Intercollegiate Athletics would be a useful first step. As commentators have noted, a similar commission established by President Ford in 1975 to address concerns over amateurism in Olympic sports led to the creation of the United States Olympic Committee as the country's coordinating body for the Olympics.12 The commission ultimately contributed to the end of amateurism in the Olympics in the 1980s, a change that proved beneficial to both Olympic athletes now free to earn endorsement dollars and to the games themselves, which are more popular than ever.

Conclusion

Though the NCAA touted the NLRB's refusal to assert jurisdiction over the Northwestern players' petition as a victory,13 the Power 5 conference reforms passed in January were a tacit recognition that, in the face of mounting criticism and judicial scrutiny, the status quo is untenable. And though reasonable minds can disagree as to whether the end of amateurism is the proper cure for what currently ails major college sports, the NLRB's unwillingness to wade into the debate is further proof that it will ultimately be up to Congress to issue the prescription.

1.Northwestern Univ. & College Athletes Players Assoc., 362 NLRB No. 167, 2015 WL 4882656 (Aug. 17, 2015).

2.One such case, O'Bannon v. NCAA, challenged the NCAA's prohibition on college athletes profiting from the use of their names, images and likenesses in TV broadcasts and video games. Following a trial in 2014, Judge Claudia Wilken of the Northern District of California found for the players. O'Bannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal. 2014). The decision has been appealed to the Ninth Circuit, and, in July, the Ninth Circuit stayed Judge Wilken's order that the NCAA allow schools to deposit no less than $5,000/year in trust accounts for football and men's basketball players as compensation for the commercial use of their names, images and likenesses pending the outcome of the appeal. See Marc Tracy & Ben Strauss, "Court Grants Stay in O'Bannon Case," New York Times (Jul. 31, 2015), available at http://www.nytimes.com/2015/08/01/sports/court-grants-stay-in-obannon-case.html?_r=0. Another case, Jenkins v. NCAA, currently pending in the Northern District of California, more broadly challenges the NCAA's restriction on earnings by limiting players' compensation to the value of academic scholarships.

3.Ben Strauss, "N.L.R.B. Rejects Northwestern Football Players' Union Bid," New York Times (Aug. 17, 2015), available at http://www.nytimes.com/2015/08/18/sports/ncaafootball/nlrb-says-northwestern-football-players-cannot-unionize.html.

4.Marc Tracy, "N.C.A.A. Votes to Give Richest Conferences More Autonomy," New York Times (Aug. 7, 2014), available at http://www.nytimes.com/2014/08/08/sports/ncaafootball/ncaa-votes-to-give-greater-autonomy-to-richest-conferences.html.

5.The Power 5 conferences are the Atlantic Coast Conference (ACC), Big Ten, Big 12, Pac-12 and Southeastern Conference (SEC).

6.Marc Tracy, "Top Conferences to Allow Aid for Athletes' Full Bills," New York Times (Jan. 17, 2015), available at http://www.nytimes.com/2015/01/18/sports/ncaas-top-conferences-to-allow-aid-for-athletes-full-bills.html.

7.Steve Berkowitz, "Congressional bill focuses on NCAA scholarships, concussions," USA Today (June 11, 2015), available at http://www.usatoday.com/story/sports/college/2015/06/11/ncaa-congress-college-athletics-scholarships-concussion-dent-beatty-rush-katko/71077994/.

8.Steve Berkowitz & Dan Wolken, "White House to meet with college athletics officials," USA Today (Jan. 12, 2015), available at http://www.usatoday.com/story/sports/college/2015/01/11/ncaa-white-house-president-obama/21595607/.

9.Dave Jamieson, "Obama Calls on NCAA To Rethink The Way It Protects And Punishes Athletes," The Huffington Post (Mar. 21, 2015), available at http://www.huffingtonpost.com/2015/03/21/obama-ncaa-scholarships_n_6911804.html.

10.Jon Solomon, "Congress members reintroduce NCAA bill seeking presidential commission," CBSSports.com (June 11, 2015), available at http://www.cbssports.com/collegefootball/writer/jon-solomon/25212040/congress-members-reintroduce-ncaa-bill-seeking-commission.

11.Patrick Hruby, "NLRB To Northwestern Football Union: ¯\_(ツ)_/¯," Vice Sports (Aug. 17, 2015), available at https://sports.vice.com/en_us/article/nlrb-to-northwestern-football-union.

12.Jon Solomon, "Can Congress (yes, Congress) help NCAA find solutions?" CBSSports.com (Aug. 18, 2014), available at http://www.cbssports.com/collegefootball/writer/jon-solomon/24666147/can-congress-yes-congress-help-ncaa-find-solutions.

13. "NCAA statement on NLRB decision," (Aug. 17, 2015), available at http://www.ncaa.com/news/ncaa/article/2015-08-17/ncaa-statement-nlrb-decision-0.

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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