NLRB Goes Long: Regional Director Finds NU Football Scholarship Athletes Employees

Yesterday, the Regional Director (“RD”) for Region 13 of the National Labor Relations Board (“NLRB”) found that Northwestern University’s scholarship football players are employees under the National Labor Relations Act (“NLRA” or the “Act”) and thus have the right to unionize.  As a result, the RD directed that an election be held to determine whether NU’s scholarship football players wished to be represented by the College Athletes Players Association (“CAPA”).

This is a groundbreaking decision that no doubt will be litigated for some time to come.  If upheld, the holding that scholarship football players are “employees” may expand the scope of statutory protections to scholarship students who provide services to colleges and universities beyond the scope of the student athlete in a football program.  Although the case involves a private university, it may have implications for the public sector as well.  Hopefully, this decision will turn out to be a “false start,” as explained by Brad Livingston today in his blog post, “College Football Unions:  Throw the Flag for a False Start” found here. 

In coming to the conclusion that the scholarship athletes were employees under the Act, the RD focused on whether the players were “employees” under the common law definition of an employee, i.e., whether the athletes perform services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.  The RD found that the record in this matter demonstrated that the “players receiving scholarships to perform football-related services for the Employer [Northwestern University] under a contract for hire in return for compensation are subject to the employer’s control and are therefore employees within the meaning of the Act.”

In the decision, the RD found that the NU football players performed valuable services for the University in that the University’s football program generated revenues of approximately $235 million from 2003-2012, along with the value provided to the University’s reputation from having a winning football team.  The RD also found that the “scholarships are a transfer of economic value” to the student athlete since the University provides scholarship players with tuition, fees, room and board and books with a monetary value of as much as $76,000 per year for up to five years and that this “results in each player receiving total compensation in excess of one quarter of a million dollars throughout the four or five years they perform football duties for the Employer [University].”  While the RD recognized players do not receive a paycheck in a traditional sense, and are not taxed on the benefits they receive, “they nevertheless receive a substantial economic benefit for playing football.”  Equally important, the RD found that the “tender” players accepting scholarships must sign before the beginning of each period of the scholarship constituted an employment contract, for it “gives the players detailed information concerning the duration and conditions under which the compensation will be provided to them.”  Lastly, the RD found that “it is clear that the scholarships that players receive are in exchange for the athletic services being performed” as the scholarships are tied to the players’ athletic performance, since the scholarships can be revoked if players voluntarily withdraw from the team or violate team rules.   

The RD also determined that the scholarship players were subject to the University’s “control” in the performance of their duties as football players.  The RD’s conclusion was based on several considerations.  During training camp six weeks before the start of the academic year coaches prepare and provide daily itineraries setting forth, hour by hour, what players are to do from as early as 5:45 am until 10:30 pm.  Players spend 50 to 60 hours per week engaged in football related activities during training camp.  During the regular season, players can spend 40 to 50 hours per week on football related activities.  It is not unusual at away games for players to spend 25 hours over a two-day period traveling to, practicing for and participating in away games.  According to the RD, coaches control every detail for those trips and what the players do during this time.  Even during the off season players are expected to devote 12 to 25 hours per week on football related activities.

In addition, the RD stated that the coaches control the players’ private lives as well, given the numerous rules players must follow under the threat of discipline and/or the loss of their scholarships.  Rules range from prohibitions on alcohol and tobacco use, to where players live, what they post on the internet, etc.  The control exercised over the players was found to be so pervasive that the RD found it “clear that the players are controlled to such a degree that it does impact their academic pursuits to a certain extent.”

The RD found that the players on scholarship, at least those who had yet to exhaust their eligibility, were employees under the Act.  The RD found, however, that the walk-on players were not employees under the Act since they received no compensation in the form of scholarship monies tied to playing football, signed no “tender,” and appeared to have greater flexibility when it came to missing practices and workouts to the extent it conflicts with their coursework.

The University argued that the players were not employees based on Brown University, 342 NLRB 483 (2004), in which the Board found certain graduate assistants were not employees.  In Brown University, the full NLRB overruled an earlier decision and determined that graduate assistants are students, not employees, and thus are not protected by the NLRA.  According to the Brown decision, which the current NLRB is likely to revisit, four factors were considered to determine that the graduate assistants were not employees under the NLRA including:  (1) the status of graduate assistants as students; (2) the role of graduate assistantships in graduate education; (3) the graduate assistants’ relationship with the faculty; and (4) the financial support received from the University.   

The RD in Northwestern found the four factor statutory test applied in Brown to be inapplicable in the Northwestern case “because the players’ football-related duties are unrelated to their academic studies unlike the graduate assistants whose teaching and research duties were inextricably related to their graduate degree requirements.”  Even so, the RD went on to apply the four factors and distinguish the Northwestern facts from Brown University, noting that the “outcome would not change even after applying the four factors to the facts in the case.”  In so doing, the RD found that (1) scholarship football players are not primarily students, due to the amount of time they spend on football-related activities per week (40-50 hours per week versus about 20 hours per week attending classes); (2) scholarship players’ athletic duties do not constitute a core element of their educational degree requirements, as they receive no academic credit for playing football, nor must they play football to obtain their undergraduate degree; (3) academic faculty do not supervise scholarship players’ athletic duties - football coaches who are not part of the academic faculty supervise players’ athletic duties; and (4) scholarship players’ compensation is not financial aid, as it is given in exchange for the athletic service that the player is providing the University.

The RD also found that the players are not temporary employees and thus excluded from coverage under the NLRA because, although their “employment” is for a finite duration, it is for a “substantial” duration, i.e., four, possibly five, years.

Having found that the scholarship football players were employees and given that the walk-ons were not employees, the RD found that the proposed bargaining unit was appropriate.  The RD further found that the union was a labor organization under the Act.  In light of the findings, the RD ordered that an election be scheduled to determine whether the scholarship players wished to be represented by CAPA.

The University has the right to request review of the decision from the NLRB and reports indicate that Northwestern University will be seeking to appeal this decision to the full NLRB.  There is a right to appeal the decision of the full NLRB to federal courts if necessary.  

If left standing, the Northwestern decision is likely to have a significant impact on both private and public sector educational institutions.  If upheld, it is possible many private university scholarship athletes, at least in revenue generating sports, will be subject to organizing.  Public university athletes may similarly attempt to organize in states where public employees in the educational sector are permitted to organize, unless students are otherwise exempt under the applicable statute’s definition of employee.  For example, the Illinois Educational Labor Relations Act appears to exempt student athletes under its definitions of educational employee1 and student.2  See 115 ILCS 5/2(b).

This decision also leaves opens the door to many questions and issues related to higher education and its relationship with other scholarship students, not just scholarship student athletes participating in programs which generate revenue.  The potential implications are far reaching.  Consider the following:

• Will scholarship students in non-revenue generating sports similarly assert rights to organize under the NLRA?
   
• Will scholarship football players and possibly other scholarship athletes in revenue generating sports assert rights as employees under many of the state and federal laws affecting the employer-employee relationship in the higher education setting?  For example, will scholarship football players assert that they are protected by OSHA since the OSHA Review Commission relies upon the common law test for the definition of “employee” in determining OSHA’s coverage.  Or will scholarship football players assert worker’s compensation protections?  (Consider California law in which “employee” is defined for workers’ compensation purposes as every person in the service of an employer under any appointment or contract of hire or apprenticeship, express or implied, oral or written, whether lawfully or unlawfully employed).  And, of course, the implications under both state and federal wage and hour laws if scholarship football players and possibly other scholarship athletes are considered “employees” --  will they need to be paid the required minimum wage and overtime premiums?    
   
• If scholarship football players are deemed employees under the NLRA, will this expand the scope of obligations to these players under the University’s practices, policies and procedures relating to its employees? 
   
• What are the implications of this decision on NCAA Rules and enforcement of those Rules? 
   
• We will continue to keep you posted as we follow the Northwestern case as its appealed to the full Board.
   

¹ The Illinois Educational Labor Relations Act defines an “employee” as “any individual, excluding supervisors, managerial, confidential, short term employees, student, and part-time academic employees of community colleges employed full or part time by an educational employer ...”

² The Illinois Educational Labor Relations Act specifies that the term “student  includes graduate students who are research assistants primarily performing duties that involve research or graduate assistants primarily performing duties that are pre-professional, but excludes graduate students who are teaching assistant primarily performing duties that involve the delivery and support of instruction and all other graduate assistants.”