On January 28, 2014, student-athlete members of the Northwestern University football team filed a representation petition with the National Labor Relations Board (NLRB) asserting that they are "employees" of the university and that as such, they should be allowed to be represented by a union for purposes of collective bargaining. The players' petition states that they seek to be represented by the "College Athletes Players Association" (CAPA), an entity that is backed by the United Steelworkers union. In February, the NLRB's Chicago Regional Office (Region 13) heard testimony and arguments related to the petition in a hearing that lasted several days.

On March 26, 2014, NLRB Region 13 Director Peter Sung Ohr issued a ruling in favor of the players, finding that "players receiving scholarships from the [university] are ‘employees' under Section 2(3) of the [National Labor Relations] Act" and accordingly, should be permitted to participate in an election to determine whether they will be represented for purposes of collective bargaining by CAPA. The ruling defines the appropriate bargaining unit as "all football players receiving grant-in-aid scholarship[s] and not having exhausted their playing eligibility." 

Critical to the Regional Office's decision were its determinations regarding the control exerted over the players by the university, as well as the significant economic benefits that the players provide to the university while simultaneously being subjected to severe limitations on the types of compensation that they are allowed to receive individually. With regard to control, the NLRB noted that "players who receive scholarships are under strict and exacting control" by the university throughout the calendar year, not just the football season.  The players are subject to explicit and detailed daily itineraries dictating both their athletic and academic activities, and their coaches "have control over nearly every aspect of [their] private lives by virtue of the fact that there are many rules that they must follow under threat of discipline and/or the loss of a scholarship." Even simple daily tasks like driving their personal vehicle or posting something on the Internet are subject to restrictions and require advance permission from a coach.   

With regard to economic issues, the NLRB noted that the student-athletes receiving scholarships are "performing valuable services … that generated revenues of approximately $235 million during the nine-year period [from] 2003-2012 … through ticket sales, television contracts, merchandise sales and licensing agreements." In exchange for the athletes' services, the university provided them "compensation" in the form of scholarships that covered their tuition, fees, room and board, books and other living expenses for up to five years, which the NLRB ruled was clearly a "transfer of economic value" in that each scholarship is worth as much as $76,000 per year and over one quarter of a million dollars throughout the several years of an athlete's playing career. Moreover, the NLRB found the document that players are required to sign at the beginning of each period of the scholarship (a "tender") is the equivalent of an employment contract. This contract, and the exchange of economic value for the performance of valuable services that it provides for, further supported the NLRB's determination that the players "fall squarely within" both the Act's broad definition of what constitutes and "employee" and the common law definition of the term.

Conversely, the NLRB held that the "walk-on" players — those who do not receive scholarships — are not employees. The reasoning behind that determination was that since the walk-ons do not sign a tender, do not receive compensation for the athletic services that they provide, and are free from many of the severe restrictions that scholarship players are subject to, there is no basis to consider them employees for purposes of the Act.

Also important to the NLRB's finding that scholarship athletes constitute employees was its determination that they "are not primarily students." This determination was critical, as it was one of the factors that led the NLRB to rule in another previous case (Brown University, 342 NLRB 483 (2004)), that graduate teaching assistants did not constitute "employees." In that case, the NLRB found that graduate assistants "spend only a limited number of hours performing their duties," so it was "beyond dispute that their principal time commitment [was] focused on obtaining a degree and, thus, being a student." In contrast, the NLRB noted in the present case that the players spend 50 to 60 hours or more per week on football-related activities, while spending about 20 hours per week attending class. Accordingly, it held that they could not be considered "primarily students" who spend only a limited time performing their athletic duties.

This stunning decision has the potential to completely reshape college athletics, as it opens the door for scholarship athletes at private colleges and universities all over the country to be deemed "employees" and engage in collective bargaining with the schools that "employ" them over their "wages, hours and working conditions." But even though the players have won the first round of this game, it is far from over. The university is expected to appeal the decision to the full Board in Washington, D.C., and it is unlikely that any election would take place before the Board issues a decision. Moreover, even if the decision is upheld, it can still be appealed to the federal appeals court (and eventually the Supreme Court). However this protracted litigation plays out, it is sure to be an exciting game to watch.