Student-Athletes: Are They Employees?

by Dorsey & Whitney LLP

Digging Deeper into the History of the NLRB’s Decision and Northwestern’s Appeal

This case started when the “College Athletes Players Association” (“CAPA”) was formed as a union created to represent the Northwestern football players, with backing from the United Steelworkers. The CAPA then filed a union representation petition with the Board, claiming that it had majority support among players on the Northwestern football team and demanding a union representation election. Northwestern objected to the petition and refused an election, arguing that legally its student athletes simply are not “employees” and thus have no right under the National Labor Relations Act (the “NLRA” or the “Act”) to organize and collectively bargain.

The National Labor Relations Board (the “NLRB” or the “Board”) held a hearing on this issue earlier this year where CAPA and Northwestern presented extensive testimony about how exactly the relationship between the students and the University should be treated. After lengthy briefing and just weeks after this hearing, the NLRB Regional Director issued a decisive ruling in favor of CAPA and the Northwestern student-athletes’ right to organize a labor union, premised on its key finding that the players are “employees” of the University.

Analysis on the Region’s Decision

The Chicago Region’s decision starts out its analysis with a straightforward recitation of the general principle that an “employee” under the NLRA is any “person who [1] performs services for another under a contract of hire, [2] subject to the other’s control or right of control, and [3] in return for payment.” See id. (citing Brown University, 342 NLRB 483,490, fn. 27 (2004)). This reflects the so-called “common law” test for who should be treated as an “employee” for legal purposes. The Region’s decision then proceeded to reach the very controversial conclusion that Northwestern’s college football players receiving scholarships meet each part of this legal standard.

Their Top Eight Common Law Employee Test

According to what the Region’s decision explains, Northwestern’s football players should be considered to be “employees” under this common law test based on each of the following findings:

  • Northwestern benefits from a successful football program through ticket sales, television contracts, merchandise sales, licensing agreements, and an improved reputation that “may” convince alumni to increase their giving and lead to more student applicants;
  • The athletic scholarship “tender” offered to athletes to sign before admission to the university serves as a contract making the receipt of a scholarship contingent on providing these football-related services for Northwestern’s benefit;
  • The scholarships and stipends the players receive – which together total as much as $77,000 per year in Northwestern’s case– are a “substantial economic benefit for playing football;”
  • An earlier NLRB case precedent (known as Seattle Opera v. NLRB, 292 F.3d 757, 761-62 (D.C. Cir. 2002)) permits the conclusion that “economic benefit” such as the athletic scholarships these student-athletes receive can count as “payment” under the NLRA even if it is not monetary compensation in the traditional sense (which, of course, collegiate athletes are not permitted to receive);
  • Just as with employees, students play football “subject to [another’s] control or right of control” – most directly by their coaches but also under other University rules;
  • The amount of time the players spend in football-related activities includes between 50 to 60 hours per week for approximately 4 weeks in training camp, between 40 to 50 hours a week during the season, and during off-season between 12 to 25 hours per week in continuous physical and other football-related training;
  • The coaches and University control many other aspects of these student-athletes’ daily lives in and out-of-season, including bed and meal times, where players live, whether they work at other jobs, whether they may drive personal vehicles, what kinds of off-campus travel they can conduct, how they engage with the media, and even the content of their internet activities; and
  • As the decision also affirmatively noted, football activities can interfere with the players’ academic activities by causing the players to miss class, to delay enrollment in necessary courses, and to have greatly limited study time for the “student” portion of their University life.

Combating the Brown University Decision

After concluding that scholarship players meet the common law “employee” test, the Region’s decision addressed earlier cases that involved legal holdings requiring that students not be considered as employee under the common law rule. The most prominent of these is the NLRB’s earlier decision in Brown University, 342 NLRB 483 (2004), in which the Board earlier decided that, because a group of graduate teaching assistants were “primarily students” at their university, their teaching work and stipends as graduate students could not make them into “employees” for purposes of the Act.

Although Northwestern argued that its football players were no different – that the primary purpose of their attending Northwestern was to be students – the Region‘s decision rejected Brown’s application to football players for the following reasons:

  • The decision first distinguished the 12 to 60 hours per week that these student-athlete football players spent on football activities throughout the year to the more “limited” time that graduate students in Brown devoted to their teaching responsibilities;
  • Teaching obligations were a core part of the education of Brown’s graduate students, that one of the reasons the graduate students were going to Brown University was to learn how to teach, and that their teaching abilities were evaluated by Brown’s faculty. In contrast, the Region’s decision noted that playing football was not part of the curriculum of any major any of Northwestern’s football players were pursuing; and
  • The decision noted what is considered to be the key difference between a football scholarship, which is tied inextricably to being on the football team, and graduate student financial aid, which was given to graduate students even if they did not teach.

Scholarship vs. Walk-on Athletes – A Dividing Line

In one more part of the Region's decision, the NLRB ruled that players who are “walk-ons” are not employees and cannot be included in the same bargaining unit with the scholarship players, stating as follows:

“The walk-ons, on the other hand, have nothing tying them to the football team except their “love of the game” and the strong camaraderie that exists among the players. That some of the walk-ons may also have aspirations of earning a football scholarship does not change the fact that they do not receive any compensation at that point in their collegiate football careers. Thus, the mere fact that they practice (and sometimes play) alongside the scholarship players is insufficient to meet the definition of “employee.”

The Region’s decision then ordered an election for all scholarship-receiving football players at Northwestern (but not including walk-ons) to take place on April 25. Northwestern’s appeal may cause that election date to be postponed, but instead, it is more likely that the vote will be held and the ballots impounded without counting them until Northwestern’s appeal can be resolved.

Northwestern’s Appeal Stance

Northwestern’s appeal to the NLRB in Washington, D.C. focused on its contentions that a unionization result for college athletics would result in “chaos” for a number of reasons.

  • Northwestern’s major thrust is that student-athletes simply are not “employees” according to any legal standard and that any “employee” finding of this type would end up with wildly inconsistent results for a wide range of employment and unionization purposes.
  • The appeal also emphasized that the Region’s decision was simply wrong in its “employee” finding for student-athletes in a number of other respects, including that this also is inconsistent with the NLRB’s own earlier ruling in the Brown University decision that graduate student teaching assistants cannot be unionized.
  • Northwestern, among many other contentions in its appeal, also very strongly criticized the aspect of the Region’s decision excluding “walk-ons” from the union vote as potentially “fracturing” the team by splitting it up into several different units. In Northwestern’s view, this “fracturing” of the team was another major reason emphasizing that unionization for college sports teams is not a workable result.

Effects Due to Alliances on the NLRB Board

In terms of whether the Brown University decision will end up controlling the result, many legal commentators already believe that the current members of the NLRB in Washington, D.C., which now has a majority of appointees selected by President Obama and who have union backgrounds themselves, more likely would overrule that decision anyway. Even more simply, there really is no question in a realistic sense that the NLRB in Washington, D.C. really does “follow the election returns,” and that now what has become referred to as the “Obama Board” very likely will vote to uphold the Chicago Region’s decision.

As a further confirmation of this being the likely result in the Northwestern case, the former Chair of the NLRB during President Obama’s first term, Wilma Liebman, has predicted exactly this in interviews about the likely outcome of this decision according to several news reports. That, however, is in no way the end of this controversy, nor the end of the many other issues about student-athletes and what legal status they should have, that this case before the NLRB is likely to generate.

Additional Insights

Finally, some of Northwestern’s assertions in its appeal appear to be more of an attempt to state persuasive reasons for why unionization is not a wise step for the student-athletes themselves to choose than actual grounds for a successful NLRB appeal. These include:

  • College scholarships now may end up being taxed as income by the IRS, which has been a point of much decision among commentators since the NLRB Chicago Region’s discussion was first issued;
  • Public universities are not subject to the NLRB, which somehow presumably would adversely affect the competitiveness of the private university teams by providing for an unequal playing field – this is not likely to be a legal point to which the Board will give consideration; and
  • The NLRB’s decision wrongfully failed to consider that unionization would harm women’s sports programs because as it appears to assert the resulting increased costs would lead to decreased funds to support women’s programs and even possibly illegally discriminatory treatment of women student-athletes if the male student-athletes received any increased benefits from unionization.

Rather than being determinative legal assertion, the raising of all of these points emphasizes the high level of public and even political attention this case is likely to draw, and that public opinion itself will very likely play at least some role in the outcome of what is almost certain to be an increasingly contentious legal dispute.

This is the second piece in a three-part series on the recent NLRB ruling. Our first update highlighted the case’s initial findings. Join the discussion again as we look at long-term impacts on public universities and other college sports.

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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