The National Labor Relations Board (“Board”) is pushing to redefine collegiate athletes as employees across the nation, essentially going against the defined scope of the National Labor Relations Act (“NLRA”).[2] The NLRA defines an “employee” in Section 2(3) as “private sector employers whose activity in interstate commerce exceeds a minimal level.”[3] Public universities would not be covered by the NLRA and, thus, would not be regulated by the Board.[4] This could be problematic because any public universities, which are the majority of Division I and Football Bowl Subdivision (“FBS”), would not be subject to the NLRA and could not collectively bargain for benefits or rules governing their sport.[5] Yet, the Board has continued to push for collegiate athletes to be redefined as employees.[6]
Northwestern University
The Board first addressed the issue of whether collegiate athletes were employees when the College Athletic Players Association (CAPA) asked the Board to define Northwestern University (“Northwestern”) football players as employees for receiving scholarships.[7] 85 of the 112 football players received scholarships, which were worth roughly $61,000 per year “based on tuition, fees, room, board, and books.”[8] None of the compensation from the scholarships was given directly to the student-athletes, except a monthly stipend for upperclassmen living off-campus.[9]
Northwestern competes in the Big Ten Conference (“Big Ten”), which is Division I FBS, the highest level of “amateur” football.[10] At the time, there were 125 schools competing in the FBS and 17 were private schools with Northwestern as the only private school in the Big Ten.[11] The Board determined that the football athletes were not employees because of the control exercised by the National Collegiate Athletics Association (“NCAA”) over teams and the structure of FBS and the Big Ten, which are predominantly made up of public universities.[12] Since public universities, the vast majority of FBS and the Big Ten, do not fall under the NLRA, it would cause instability for the Board to assert their jurisdiction.[13]
General Counsel Memorandum About Collegiate Athletes Being Employees
In 2021, the Board’s General Counsel Jennifer Abruzzo released a memorandum explaining: (1) student-athletes are employees, and (2) being told they are not is a violation of Section 8(a)(1) of the NLRA.[14] She criticized the Board’s decision in Northwestern University and determined that the Northwestern football players should be defined as employees under the NLRA.[15] She notified the public, collegiate athletes, universities, conferences, and the NCAA that she would make the determination that collegiate athletes are employees “in future investigations and litigation.”[16]
Dartmouth College
Abruzzo’s administration had heavily pushed for student-athletes to be defined as employees. The Trustees of Dartmouth College suit was the first decision that solidified Abruzzo’s policy desires.[17] The Dartmouth College (“Dartmouth”) men’s basketball team plays in Division I’s Ivy League Conference.[18]
The Ivy League gives no athletic scholarships, but eleven student-athletes on the team receive need-based scholarships worth between $31,070 and $85,013, which is the full cost of attendance.[19] Because of this, they would not lose their scholarship by quitting the basketball team.[20] The Board ruled that Dartmouth basketball players are employees because Dartmouth has “the right to control the work performed” by the basketball team, “and the players perform that work in exchange for compensation.”[21] It was noted that because all of the schools in the Ivy League are private universities, the Board was able to assert jurisdiction.[22]
Johnson v. NCAA is a Fair Labor Standards Act (“FLSA”) claim about collegiate athletes being redefined as employees, but the Court used the Board’s decision about Dartmouth’s men’s basketball team to support its conclusion that it is factually possible for collegiate athletes to be defined as employees under the FLSA.[23]
Implications of Categorizing Collegiate Athletes as Employees
Although the Board continues to push redefining collegiate athletes as employees, there is still a large hurdle to defining all collegiate athletes as employees. Public universities do not fall under the jurisdiction of the Board, which was the main reasoning behind the Northwestern University decision.[24] Abruzzo stated in her memorandum that she will apply the joint employer theory of liability to exercise jurisdiction over both the NCAA and their conferences, which will, in theory, eliminate the issue that some universities and colleges in the conference are public schools.[25]
However, it is unclear if the Board will use this rationale going forward, especially with the recent presidential election and recent attacks on the constitutionality of the Board’s administrative law judges.[26] President Trump appointed Peter Robb to the General Counsel position who rescinded a memorandum by a President Obama appointee stating that collegiate athletes are employees; however, President Biden appointed Abruzzo who wrote a memorandum arguing the same position as President Obama’s appointee.[27]
Currently, the Board has filed a complaint against the University of Southern California (“USC”) alleging the football team as well as the men’s and women’s basketball teams should be defined as employees.[28] Because USC is a private university, the same rationale that the Board used to decide Trustees of Dartmouth University could be used in this case, except that this case is different as USC athletes have athletic scholarships rather than solely need-based scholarships.[29]However, arguments in this case are still ongoing.[30] It is unclear what the position of the Board will be going forward, but if we look at the history of Trump appointees, the movement to redefine student athletes as employees is likely to stall or fail.
Tory Belval (guest writer) is a 2L at Villanova University Charles Widger School of Law. She is secretary of the Sports Law Society and a part of the Sports Law Concentration. Tory is interested in college athletic compliance and hopes to one day work in the compliance office of a D1 college or university.
References:
[1] Rob Lambert, Line of Scrimmage, FLICKR (November 24, 2013) (Public Domain)
[2] See Billy Witz, At What Point Should College Athletes be Considered Employees?, The New York Times (Dec, 23, 2023), https://www.nytimes.com/2023/12/23/us/college-athletes-employees-nlrb-hearing.html#:~:text=Granting%20athletes%20employee%20status%20would%20bolster%20their%20standing%20in%20antitrust(describing the recent cases where employee status for collegiate athletes has been asserted, such as the University of Southern California’s football and men’s and women’s basketball team and Dartmouth University’s men’s basketball team, as well as the impact that defining them as employes would have). Defining collegiate athletes as employees “would bolster their standing in antitrust lawsuits . . . and arm the highest-profile athletes . . . with the power to collectively bargain directly with universities for salaries and other rights.” Witz, supra.
[3] N.L.R.A, § 2(3) (1935). “The term ‘employee’ shall include any employee . . . and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include . . . any individual having the status of an independent contractor . . . or any other person who is not an employer as herein defined.” Id.
[4] Jurisdictional Standards, National Labor Relations Board, https://www.nlrb.gov/about-nlrb/rights-we-protect/the-law/jurisdictional-standards (clarifying the types of employers that the Board has jurisdiction over).
[5] Martin Edel, Are Student-Athletes Employees or Students? The NLRB General Counsel Issues Non-Binding Guidance, The National Law Review (Oct. 6, 2021), https://natlaw review.com/article/are-student-athletes-employees-or-students-nlrb-general-counsel-issues-non-binding#:~:text=On%20September%2029,%202021,%20the%20National%20Labor%20Relations%20Board’s%20(NLRB) (examining the consequences of defining collegiate athletes as employees, including the athletes receiving a bargaining representative to negotiate collectively and possible competitive advantages because public universities are not subject to the same rules). Collegiate athletes bargaining “collectively over their wages, hours, and working conditions” would let athletes “have ‘holidays’ as vacation time which could impact playing schedules and paying them health and other benefits that are not budgeted.” Edel, supra.
[6] Id.
[7] See Decision on Review and Order at 1350, Northwestern University, 13-RC-121359 (NLRB Aug. 17, 2015) (explaining that the Petitioner, College Athletes Players Association, asked the Board to define Northwestern’s football players who receive scholarships are employees under Section 2(3) of the NLRA and to direct an election).
[8] Id. at 1351 (discussing the makeup of the Northwestern football team and the scholarships they received).
[9] Id. (describing the monthly stipend upperclassmen living off-campus can receive, which was the only exception to collegiate athletes not receiving money directly).
[10] Id. (outlining Northwestern’s conference and the level at which it competes).
[11] Id. (describing the makeup of the FBS and the Big Ten). This became one of the most important rationales for the Board in determining that Northwestern football student-athletes are not employees under Section 2(3) of the NLRA. See id. at 1352.
[12] Id. (determining the rationale behind the decision that the Northwestern football players were not employees). Additionally, the Board considered in their rationale that scholarship football players must be enrolled full time and meet academic requirements, such as progress towards degree. See id. at 1353. Scholarship collegiate athletes could not participate in many activities that professional athletes could at the time, as profiting off their name, image, and likeness was not permitted until 2021. See id. The Board determined that even if it assumed that scholarship football players were similar to professional athletes, collective bargaining has never occurred in a single team where athletes for opposing teams were unrepresented or outside the NLRA’s jurisdiction. Id.
[13] See id. at 1352 (noting that the makeup of the FBS and the conferences is primarily public universities, which was the most significant hurdle to categorizing Northwestern scholarship football players as employees).
[14] Memorandum GC 21-08, Office of the General Counsel, National Labor Relations Board (Sep. 29, 2021), 1 (outlining the reinstatement of GC 17-01 to the extent that it stated student-athletes are employees and have statutory protections under Section 8(a)(1) of the NLRA). Section 8(a)(1) states: “It shall be an unlawful labor practice for an employer . . . to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 . . . .” N.L.R.A, § 8(a)(1) (1935).
[15] See Memorandum GC 21-08 at 4 (reexamining the decision in Northwestern University and concluding that the scholarship football players “clearly satisfy” the Section 2(3) test for an employee). General Counsel Abruzzo emphasized that they should have been protected by Section 7 of the NLRA when they speak “about their terms and conditions of employment” or self-organize. Id. Because of the perceived Section 8(a)(1) violation in Northwestern University because of the incorrect decision, she planned to pursue any Section 8(a)(1) violations where an employer does not classify collegiate athletes as employees. See id.
[16] Id. at 9 (emphasizing that the scholarship football players in Northwestern University are employees and notifying several groups of her intentions to make a similar decision in similarly situated cases).
[17] Decision and Direction of Election at 21, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2024) (explaining that Dartmouth’s men’s basketball team were employees under Section 2(3) of the NLRA because Dartmouth controlled the team’s right to work, and the team performed work in exchange for compensation).
[18] See id. at 3 (describing that the Ivy League participates in Division I, which Dartmouth is a part of).
[19] Id. at 7 (explaining the types of scholarships that men’s basketball players could receive and the actual amount in financial aid that they receive).
[20] Id. (clarifying that the men’s basketball team can quit the team and even be kicked off the team and not lose their scholarship because it does not relate to athletics).
[21] Id. at 21 (expanding on the rationale behind why Dartmouth men’s basketball players are employees). The Board had a broad definition of compensation, which is how they came to the conclusion that the team worked “in exchange for compensation.” Id. at 18, 21. The following are some of the reasons that they decided this. Id. at 18. The student-athletes received equipment valued at approximately $2,950 and $1,200 in tickets for a season, but they could not sell these. Id. at 11. Dartmouth pays for travel, housing, and meals needed for away games. Id. Comprehensive sports medicine was offered. Id. at 12. Although Dartmouth basketball operated at a loss because of their expenses, the team received “funds from donors, ticket sales, opponents, and the NCAA.” Id. Lastly, the team received the benefit of other activities and support throughout the university, such as the First Generation Office and Academic Skills Center. Id. at 13.
[22] Id. at 22 (examining the differences between Northwestern University and Trustees of Dartmouth College because the Ivy League is entirely private universities and, thus, it encourages stability to assert jurisdiction over Dartmouth’s men’s basketball team).
[23] See Johnson v. NCAA, No. 22-1223, slip op. at 22 (3d Cir. July 11, 2024) (noting that the Court is the first to consider whether collegiate athletes are employees under the Fair Labor Standards Act because the Board has finally taken the position that collegiate athletes are employees under the National Labor Relations Act).The Court remanded this case to the District Court after deciding that “college athletes cannot be barred as a matter of law from asserting FLSA claims simply by virtue of a ‘revered tradition of amateurism’ in D-1 athletics,” so whether the plaintiffs are employees will be decided in the future. Id. at 40.
[24] See Northwestern University, 13-RC-121359 at 1352 (explaining the rationale behind the decision, particularly that it would cause instability to assert jurisdiction when the majority of schools in FBS and the Big Ten are private universities).
[25] See Memorandum GC 21-08, n. 34 at 9 (stating “[i]t may be appropriate for the Board to assert jurisdiction over the NCAA and an athletic conference, and to find joint employer status with certain member institutions, even if some of the member schools are state institutions. As explained in Northwestern University, where an athletic conference is an ‘independent, private entity, created by the member schools,’ exerting jurisdiction over the conference is appropriate even where some member institutions are public”).
[26] See Michael McCann, NLRB’S College Athlete Rulings to Face Election Fallout, Sportico (Sep. 24, 2024) (emphasizing that the Board is “under attack” in federal courts and that the 2024 presidential election will influence whether collegiate athletes are defined as employees moving forward). A U.S. District Judge “issued a preliminary injunction against” the Board based on an “argument that NLRB administrative law judges are unconstitutionally insulated from the president’s removal powers.” McCann, supra. If an administrative law judge finds that collegiate athletes are employees in any future case, “the school, conference[,] and NCAA” could ask for review by the Board and challenge the constitutionality of the Board generally. McCann, supra.
[27] McCann, supra (contrasting the Democratic-appointed General Counsels’ and the Republican-appointed General Counsel’s approach to defining collegiate athletes as employees). However, neither presidential nominee has stated a position on collegiate athletes, even though President Biden, who works closely with presidential nominee Vice President Kamala Harris, appointed a General Counsel who is heavily advocating for redefining collegiate athletes as employees. McCann, supra.
[28] Joe Reedy, Testimony in USC Case Before Labor Relations Board Administrative Judge Could be Wrapping Up, Associated Press (Apr. 15, 2024, 2:27 PM), https://apnews.com/article/usc-ncaa-nlrb-b261dd0164b4bd17e00e4c7da5ca3f98 (expanding on the complaint that the Board filed against USC). USC, the NCAA, and Pac-12 were all named in the complaint. Reedy, supra. The NCAA and Pac-12 are considered joint employers by the Board in this complaint, so we see them using the same rationale that General Counsel Abruzzo did in her memorandum. See Reedy, supra.
[29] See id.
[30] See Reedy, supra (clarifying that the decision will be issued and then multiple appeals will likely follow, including to the Board in Washington, D.C. and federal court). Additionally, this USC case may be decided differently than Trustees of Dartmouth College because Dartmouth did not have athletic scholarships, but USC does; however, this could strengthen the Board’s argument. See Reedy, supra.
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