LABOR LAW UPDATE

Scholarship athletes playing on the Northwestern University football team are employees within the definition of the National Labor Relations Act, according to Region 13 of the National Labor Relations Board in Chicago. The Regional Director’s March 26, 2014 decision surprised many labor practitioners and has attracted the attention of the mainstream media. In addition to raising a number of interesting issues in the context of college athletics, this decision provides some insight into current Board policy.

The matter started in January when the College Athletes Players Association, a group affiliated with the United Steelworker Union and with pledges of support from the NFL Players Association, filed a petition to represent Northwestern University football players. The NLRB held a hearing on the petition; among other things, the hearing officer took evidence and made rulings related to the student-athletes’ status and daily routine. The Regional Director affirmed those rulings and directed the Regional Office to conduct an
election to determine whether the players will unionize.

The Regional Director’s conclusion that student athletes on the Northwestern University football team are employees entitled to the right to organize represents a departure from Board precedent. Specifically, in Brown University (2004) the Board held that graduate assistants were not employees because the overall relationship between the university and the graduate assistants was educational rather than economic. The Regional Director sidesteps this by describing the overall relationship between Northwestern University and student athletes as economic rather than educational.

The attempt to distinguish Brown flies in the face of scholastic facts. After a lengthy description of the football-related routines of the students on the Northwestern football team, the time commitments associated with being on the football team, and the revenue generated by the football program, the Regional Director characterized the players as not “primarily students” and their athletic duties as not part of their core educational requirements. He observed that the academic faculty did not supervise athletic duties and asserted that the scholarships were compensation rather than financial aid. The Regional
Director reached this conclusion despite acknowledging that students on the football team “have a cumulative grade point average of 3.024 and a 97% graduation rate”, that they “likewise have an Academic Progress Rate (APR) of 996 out of 1000”, that the graduation rate and APR “both rank first in the country”, and that a number of graduating students transition “to medical school, law school, and careers in the engineering field after receiving their undergraduate degree.” This is a record of scholastic success that any school should be happy to achieve for its students (athletes or not).

Rather than applying Brown, the Regional Director looked to the common law definition of employee and constructed an elaborate analogy between that definition and the student athletes at Northwestern University. The Regional Director concluded that the students on the football team were employees under this analogy because these students “perform services” for the University in exchange for “compensation” in the form of housing, tuition, meals, health care and other benefits. The Regional Director stated that his decision was influenced by the high degree of control the football program has over the lives of the
players and the substantial number of hours that players devote to the program.

Northwestern University already has announced that it will challenge the Regional Director’s decision, and in all likelihood a federal appellate court eventually will be asked to decide whether Northwestern University student athletes are employees. (Note that in 2011 the Board followed Brown but observed that that there were “compelling reasons for reconsideration” of that decision. This suggests that any challenge to the full Board is likely to lead to an affirmance of the Regional Director’s decision.) Thus, the Regional Director’s
decision appears to be the first step in a lengthy process, the outcome of which may have a major impact on the future of college athletics and the NCAA.

While this decision may open Pandora’s Box for colleges and universities, it also has implications beyond the gridiron. First, it demonstrates just how broadly the NLRB is willing to interpret its statutory authority. This expansionist effort confirms that the Board is willing to depart from precedent and extend its reach into new and unexpected areas. The case is consistent with other aggressive, pro-labor Board policies, including proposed reforms to the election process, seeking injunctions more frequently, increased protection of concerted activity in non-unionized workplaces, and stricter enforcement against “overbroad”
workplace policies.

Second, this case exemplifies recent union attempts to organize groups of individuals not typically associated with labor organizations (or even with employer-employee relations). Finally, this case serves as a reminder for employers to reevaluate their workforces, policies, and practices. Given the NLRB’s active enforcement efforts and broad protections for organizing activity, employers are well-served to assess potential risks and ensure compliance now before problems arise.

Bullard Law will continue to follow the progress of this matter. While it makes for entertaining debates on sports talk programs, it also has practical implications regarding the NLRB’s jurisdiction. Please feel free to contact us anytime with any questions about the decision or any other labor, employment, or benefits issues of interest or concern to you.