Late last week, a regional director for the National Labor Relations Board (NLRB) issued a decision that sent shock waves throughout our institutions of higher learning. In Northwestern University v. College Athletes Players Association (CAPA), the regional director held that grant-in scholarship football players (not “walk-on” players) are university “employees” under the National Labor Relations Act (NLRA), and are therefore eligible for union representation. To reach this conclusion, the regional director effectively severed the connection between college athletics and a college education. The Northwestern University decision signals the end of the “student-athlete” at the major college level more than the start of the unionization of college athletes.
Why? It does not apply to all colleges and universities. This ruling, if upheld, only will apply to private (not public) colleges and universities. Public colleges and universities are not covered under the NLRA. They, however, may fall under the jurisdiction of a state labor relations board that governs unionization of public sector employees. Those state boards may rely on NLRB precedent while interpreting their state labor law statutes. Nevertheless, the Northwestern University decision will have no immediate impact on most of the public colleges and universities that compete in major college basketball or football. If upheld, however, this decision will create a seemingly unworkable divide between public and private university athletics further complicated by their adherence to NCAA rules – which certainly do not contemplate the unionization of college athletes. Those thorny issues were not addressed by the NLRB regional director.
Right of Control Test
The regional director utilized a common law “right of control” test (usually used in independent contractor v. employee classification situations) to determine: “players receiving scholarships to perform football-related services for [Northwestern] under a contract for hire in return for compensation are subject to [Northwestern’s] control and are therefore employees within the meaning of the [NLRA].” In so doing, he made the following factual findings:
- From 2003-2012, the football program generated revenues of approximately $235 million.
- The players’ scholarships (i.e., tuition, room, board, books) are compensation for the valuable athletic services they perform throughout the calendar year (as much as $76,000 per year).
- Although the players do not receive a paycheck, they nonetheless receive a substantial economic benefit for playing football.
- The fact that Northwestern does not treat scholarships as taxable income is not dispositive of whether it is compensation.
- The “tender” players sign at the beginning of each period of the scholarship serves as an employment contract – detailing the duration and conditions for the scholarship.
- Scholarship players are under strict and exacting control throughout the entire year (e.g., 50-60 hours during training camp, 40-50 hours during the season, voluntary off season activities, restrictions on their off-the-field conduct).
The regional director gave little weight to the student-athlete’s academic activity (i.e., study time, attending classes, participation in other extracurricular activities) outside the football season as being part of his overall educational experience.
Brown University Decision Distinguished
The regional director also rejected Northwestern’s reliance on the “primary purpose” test applied by the NLRB in Brown University (2004). In that case, the NLRB ruled that graduate assistants were not “employees” for purposes of union representation because: 1) their principal time commitment was focused on obtaining a degree and, thus, being a student; 2) they received academic credit for performing their duties and those duties (for the most part) were a graduate degree requirement; 3) their work was under the direction and control of faculty members and those same faculty members taught those graduate students; and 4) the stipend money received was not compensation for services provided but rather financial aid to attend the university.
Even if Brown University applied, the scholarship football players still would be considered “employees.” The regional director noted: 1) they are not “primarily students” who only spend a limited number of hours performing football-related tasks; 2) they receive no academic credit for playing football and are not required to play football in order to obtain a degree; 3) their relationship with the university is an economic one, not an academic one; 4) football coaches, who are not faculty members, supervise their athletic duties; and 5) they are not offered a scholarship unless they agreed to provide football services to the university.
Pandora’s Box Opened
This decision did not attempt to address other federal administrative and judicial decisions that student-athlete activities are primarily educational (not economic) in nature. For example, the IRS has determined that scholarships are not taxable income. Title IX requirements treat athletic activities from revenue (e.g., men’s Division I football and basketball) and non-revenue sports equally and part of the overall education mission. Finally, the United States Supreme Court and other federal courts have held that NCAA restrictions applicable to student-athletes are outside antitrust scrutiny because they preserve amateurism in collegiate sports.
If this decision stands, then private universities could be required to bargain with student-athletes over the amount of the scholarship, the scope and length of practices, travel accommodations, student housing, travel costs to visit their home, food service quality, academic tutoring, medical coverage – continuing after their college career has ended, safety issues – the reduction of head injuries, and the ability to pursue commercial opportunities. Could players even deal directly with their coaches about playing time and disciplinary decisions (e.g., run laps, benched for one game, extra weight training sessions)?
Moreover, if student-athletes qualify as “employees,” then should they: 1) be treated as employees under state workers’ compensation laws; 2) be covered under federal and state wage and hour laws as non-exempt employees (e.g., receive statutory minimum wage and overtime for all hours worked over 40 [over 8 in some states] in a work week); and 3) be subject to the HR policies applicable to the university’s other employees?
The regional director ordered an election among the current Northwestern scholarship athletes to determine whether they want CAPA to represent them for collective bargaining purposes. That election could be scheduled in little over a month. If the Northwestern scholarship players vote for CAPA, and the NLRB certifies the election results, then Northwestern may refuse to bargain with CAPA. Northwestern and/or the NLRB then will ask a federal appeals court to rule on the regional director’s decision: Northwestern challenging the “employee” designation and/or the NLRB seeking an order directing Northwestern to negotiate with CAPA. Ultimately, this issue may be decided by the United States Supreme Court.
The NLRB regional director’s decision is far from being the final word on this topic. Clarity may not be achieved for many years. Regardless of the ultimate outcome of the Northwestern University decision, however, college athletics may never be the same. The NLRB decision undermines the entire foundation for the law’s treatment of college athletes. Undaunted, a NLRB official has announced the primary purpose of college scholarship athletes is not to get an education. They are “employees.” As gleaned from above, the Northwestern University decision has enormous implications for the structure of collegiate sports.