For decades, college athletes were prohibited from making money as professionals. A contributing factor has been the National Labor Relations Board (NLRB), the government agency responsible for enforcing the rights of private sector employees and protecting them from unfair labor practices, refusing to recognize college athletes as employees of their respective colleges and universities.[2]
On September 29, 2021, however, the NLRB General Counsel issued an internal memorandum indicating that scholarship athletes on revenue-producing teams at private institutions should be classified as employees under the National Labor Relations Act (NLRA).[3]The NLRA forbids private employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining, or assisting a labor organization for collective bargaining purposes, or from working together to improve conditions of employment.[4]
Considering a 2015 decision where the NLRB declined to exercise jurisdiction over a petition filed on behalf of a group of Northwestern University football players who attempted to organize as employees, this memo came as a surprise to student athletes and the public alike.[5] The basis for the Board’s decision in 2015 was a concern that creating different rules for athletes at public and private universities would promote greater instability in labor relations.[6]
In its memo, the NLRB indicated its position shifted as a result of developments in the law, the significant change in the college sports environment since 2015, and the rise of college athlete activism, which the NLRB views as a protected activity relating to conditions of employment.[7] To address concerns about there being different rules for athletes in public and private universities, the NLRB indicated that the NCAA and its conferences could be considered joint employers under the NLRA since they directly and immediately control the terms and conditions of an athlete’s employment. Thus, the NLRB’s jurisdiction could extend to all schools.[8]
The Supreme Court’s decision in NCAA v. Alston provided momentum for the NLRB’s change in ideology.[9] There, the Court unanimously ruled that the NCAA cannot limit education-related benefits, once again stating that the NCAA is not above the law.[10] In its memo, the NLRB noted that the Supreme Court “recognized that amateurism in college sports has changed significantly in recent decades.”[11] Additionally, the memo was issued following an early ruling in the ongoing Johnson v. NCAA case, where college athletes are suing their universities under the Fair Labor Standards Act (FLSA).[12] The athletes claim they are employees of their schools and are entitled to wages for their time and engagement in college athletic activities. In August 2021, the district court denied the university defendants’ motion to dismiss, allowing the athletes’ lawsuit to continue. The defendants subsequently filed an interlocutory appeal to the U.S. Court of Appeals for the Third Circuit.[13]
While the NLRB memo is not binding law, it does reflect the position the NLRB will be taking in future investigations and litigation under the NLRA.[14] As a consequence, the door is now open for certain student athletes at private schools to unionize, have a representative negotiate their wages, hours, and work conditions, and be entitled to benefits such as health insurance and vacation time.[15] Such actions will likely be the subject of many legal challenges, and any change to the legal status of college athletes will ultimately be decided by the courts.[16] Despite the Supreme Court’s ruling for student-athletes in Alston on the narrow question of educational benefits, it may take a different approach if asked to apply laws such as the FLSA and NLRA to college athletes.[17]
Much uncertainty remains for the future of college athletics. Some continue to believe that college athletes are amateurs and should not be compensated as professionals. There is also concern that by paying college athletes, sports and entertainment will be prioritized over education and undermine the purpose of higher education.[18] Furthermore, if only scholarship athletes on revenue-producing teams at private schools can attain employee status under the FLSA and NLRA, this could result in an imbalance between players in terms of wages and benefits, and it also may take money away from non-revenue producing sports.[19] Others believe college athletes are being exploited by their schools because they dedicate significant time to their sport and generate millions of dollars in revenue but receive no monetary return beyond educational benefits.[20] With the Supreme Court’s decision in Alston, the NLRB memo, pending litigation in the courts, and pressure mounting on the NCAA, it is anticipated that there will be more change to college athletics in the near future.
[2] Jimmy Golen, What the U.S. Labor Board Memo Saying that College Athletes are Employees Means for the NCAA, Fortune (30 Sept. 2021). https://fortune.com/2021/09/30/nlrb-memo-college-athletes-employees-ncaa/ [3] NLRB GC 21-08 (29 Sept. 2021). [4] 29 U.S.C. §§ 151-169. [5] Golen, supra. [6] Id. [7] NLRB GC 21-08 (29 Sept. 2021). [8] Golen, supra. [9] Dennis Dodd, Classifying College Athletes as Employees, NLRB Memo Sets Stage for Further NCAA Destabilization, CBS (29 Sept. 2021). https://www.cbssports.com/college-football/news/classifying-college-athletes-as-employees-nlrb-memo-sets-stage-for-further-ncaa-destabilization/ [10] Nat'l Collegiate Athletic Ass'n v. Alston, 141 S. Ct. 2141 (2021). [11] NLRB GC 21-08 (29 Sept. 2021). [12] Johnson v. NCAA, No. 19-cv-05230, 2021 WL 3771810 (E.D. Pa. Aug. 25, 2021). [13] Michael McCann, NCAA Motion Denied as Athletes’ Case Seeks Employment Status, Sportico (27 Sept. 2021). https://www.sportico.com/law/analysis/2021/college-athletes-employees-1234640755/ [14] NLRB GC 21-08 (29 Sept. 2021). [15] Martin D. Edel, Are Student-Athletes Employees or Students? The NLRB General Counsel Issues Non-Binding Guidance, The National Law Review (6 Oct. 2021). https://www.natlawreview.com/article/are-student-athletes-employees-or-students-nlrb-general-counsel-issues-non-binding [16] Dodd, supra. [17] Barnes & Thornburg LLP, Are College Athletes Employees? Courts and the NLRB Weigh In, (11 Oct. 2021). https://btlaw.com/en/insights/alerts/2021/are-college-athletes-employees-courts-and-the-nlrb-weigh in#:~:text=NCAA%2C%20in%20the%20U.S.%20District,they%20spend%20in%20athletic%20activities. [18] Michael Smith, College Discourse: Athletes as Employees, Sports Business Journal (20 Dec. 2021). https://www.sportsbusinessjournal.com/Journal/Issues/2021/12/20/Upfront/College-Conversation.aspx [19] Ross Dellenger, NCPA Takes Next Step Toward College Athletes Being Classified as Employees, Sports Illustrated (8 Feb. 2022). https://www.si.com/college/2022/02/08/ncaa-student-athletes-vs-employees-debate-big-step [20] Mark J. Drozdowski, Should College Athletes be Paid?, Best Colleges (7 Sept. 2021). https://www.bestcolleges.com/news/analysis/2021/09/07/should-college-athletes-be-paid/