The National Labor Relations Board (NLRB) General Counsel has issued a complaint against the University of Southern California (USC), the Pac-12 Conference and the NCAA claiming that certain USC student-athletes are employees under the National Labor Relations Act (NLRA), and that the conference and the NCAA, along with the university, can be held jointly responsible employers for the treatment of those students under the law. This NLRB litigation portends fundamental consequences for private college and university athletic programs.
The General Counsel for the National Labor Relations Board (NLRB or Board), who has authority for setting prosecutorial policy for the NLRB, issued a General Counsel Memorandum (GC Memo) today, reversing the prior Board General Counsel’s position and asserting the employee status of certain student athletes at private educational institutions. Board General Counsel Jennifer Abruzzo conveyed her enforcement position in a memorandum to the Board’s Regional Directors. Because non-unionized employees have rights under the federal labor law, the immediate impact will be that the NLRB’s enforcement arm will be processing complaints related to allegations of adverse treatment of certain student athletes for all variety of internal complaints against private institutions.
On June 10, 2020, the National Labor Relations Board (the NLRB or the Board) issued a decision that reversed a 2014 Board decision regarding the test for exercising jurisdiction over faculty members at religious institutions. In Bethany College, the Board held that the test for exercising such jurisdiction that was established by the Board in Pacific Lutheran University was inconsistent with U.S. Supreme Court and D.C. Circuit Court of Appeals precedent, and restored the test established by the D.C. Circuit Court of Appeals in University of Great Falls v. NLRB.
On September 23, 2019, the National Labor Relations Board (NLRB) published a Notice of Proposed Rulemaking that addresses the long-standing issue of whether undergraduate and graduate students who perform services for compensation (including teaching or research) at private colleges and universities can form a union under the National Labor Relations Act (NLRA). Under the proposed rule, student workers would not be able to organize based on the Board’s position that such individuals do not meet the definition of “employee” under Section 2(3) of the NLRA because their relationships with their colleges and universities are predominantly educational, not economic.
On April 21, 2017, the Acting Regional Director of Region Five of the National Labor Relations Board (“NLRB”) issued a Decision and Direction of Election holding that Resident Advisors (“RAs”) at George Washington University are employees under the National Labor Relations Act (“NLRA”) who are entitled to vote in a union representation election. This decision comes on the heels of the NLRB’s recent decision in Columbia University, holding that graduate and undergraduate student assistants are employees who are also entitled to unionize. This ruling by NLRB Region Five could potentially open the door for unions to organize RAs at other private institutions of higher education. The representation petition at George Washington was filed by Local 500 of the Service Employees International Union (“SEIU”). SEIU sought to represent a bargaining unit of all full-time and regular part-time RAs at George Washington, which consisted of approximately 110 individuals. As a condition of becoming an RA, an individual must be a full-time undergraduate student enrolled in a degree-granting program, and must have completed his or her first year of studies. RAs at George Washington are expected to be in good academic and judicial standing. George Washington argued that RAs should not be considered “employees” under the NLRA for two principal reasons: (1) its requirement for RAs to be undergraduate students is necessary for the RAs to develop a “peer-to-peer mentoring relationship” with their assigned residents; and (2) RAs are an important part of George Washington’s residence life program, which is an extension of its academic program. The Acting Regional Director of NLRB Region Five rejected George Washington’s arguments after a hearing on these issues, finding that the RAs have an employment relationship with the University. The Acting Regional Director determined that RAs perform services for the University, are subject to the University’s control, and perform their services in exchange for payment. The RAs at George Washington receive a stipend of $2,500 for the academic year, less applicable tax withholdings, as well as free on-campus housing valued at $12,665 per year. The RA position description at George Washington sets forth four main categories of job duties, along with a list of particular expectations for each category of job duties. The Acting Regional Director also found that RAs are subject to discipline, up to termination, if they fail to comply with George Washington’s policies or if they fail to remain in good academic or judicial standing. One particular piece of evidence that the Acting Regional Director found to be significant was that RAs at George Washington are required to sign a four-page document entitled “Resident Advisor Employment Agreement,” which describes the University’s “expectations and employment terms” for RAs. According to the Acting Regional Director, the mere fact that being an RA might be part of the educational experience of an undergraduate student at George Washington does not preclude a determination that the relationship is principally an economic relationship. The Acting Regional Director wrote: “Employment experiences can simultaneously be educational or part of one’s personal development, yet they nonetheless retain an indispensable economic core.” A representation election will be scheduled in the coming weeks for the RAs at George Washington to determine if they wish to be represented by SEIU for purposes of collective bargaining. George Washington has the right to seek review by the NLRB and potentially by a federal appellate court if SEIU wins the election. At this point, two of the three occupied seats on the NLRB are filled by Democratic appointees who are pro-union. There are also two vacancies on the NLRB. When those vacancies are filled by President Trump, it is expected that the NLRB will have its first Republican majority in approximately nine years. Therefore, this ruling by NLRB Region Five may not be the last word on this important issue for institutions of higher education.
In a long-awaited decision issued on August 17, 2015, the five-member National Labor Relations Board (“Board”) unanimously shut down an attempt by Northwestern University’s scholarship football players to become the first group of college athletes to form a labor union. This Board holding vacates the direction of election issued by an NLRB Regional Director in March 2014 and dismisses the representation petition filed by the College Athletes Players Association (“CAPA”), but does not address the fundamental issue of whether the players are “employees” under the National Labor Relations Act (“Act”). Instead of deciding this issue, the Board declined to assert jurisdiction over this case based on its conclusion that it “would not promote stability in labor relations” and therefore would not effectuate the policies of the Act. The Board noted that it had never been asked to assert jurisdiction in a case involving college athletes, nor had there ever been a petition for representation of a unit of a single college team, or even a group of college teams. The Board also pointed out that the players in this case did not “fit into any analytical framework” the Board had used in other cases involving college students (such as graduate student assistants or student janitors and cafeteria workers) because this case involved student athletes who receive scholarships to participate in what traditionally has been regarded as an extracurricular activity. The Board also distinguished these scholarship players from professional athletes, because the scholarship players are required to be enrolled full time as students and meet various academic requirements. The Board further observed that bargaining units in professional sports have never been limited to a single team’s players – they have always included the players of all teams in the entire league. Therefore, the Board concluded that there was no precedent that required it to assert jurisdiction, and that it was free to exercise its discretion to decline jurisdiction over this case. In justifying its decision to decline jurisdiction, the Board explained that Northwestern is a member of the National Collegiate Athletic Association (“NCAA”), which has a “substantial degree of control over the operations of individual member teams, including many of the terms and conditions under which the scholarship players (as well as walk-on players) practice and play the game.” Under these circumstances, the Board determined that its assertion of jurisdiction over only Northwestern and its scholarship football players would not promote stability in labor relations across the NCAA. The Board further explained that Northwestern competes in the NCAA Football Bowl Subdivision (“FBS”), where 108 of the 125 member schools are public institutions that are not covered by the Act. As a result, the Board does not have jurisdiction over the vast majority of the FBS teams. In fact, the Board pointed out that because Northwestern is the only private school in the 14-member Big Ten Conference, it “cannot assert jurisdiction over any of Northwestern’s primary competitors.” The Board cited this as an additional reason why its assertion of jurisdiction over only Northwestern and its scholarship football players would not promote stability and uniformity in labor relations. Although the Board’s exercise in restraint in this decision comes as somewhat of a surprise given this Board’s activism in expanding the reach of the Act, the Board made clear that its decision does not “preclude a reconsideration of this issue in the future,” and should be interpreted narrowly. In fact, the Board seemingly opened the door for consideration of a broader proposed bargaining unit than scholarship football players at one university by stating that its decision is not intended to “address what the Board’s approach might be to a petition for all FBS scholarship football players (or at least those at private colleges and universities).” So, the landscape of collegiate athletics will remain the same for now, but this may not be the last unionizing effort of student athletes that we see.
The National Labor Relations Board’s treatment of college and university students as “employees” covered by the National Labor Relations Act has been the subject of a tortured history. In the Fall of 2000, in a case involving NYU, the NLRB held that graduate assistants could be employees under the Act and therefore subject to the Act’s protections for organizational activity and collective bargaining. Thereafter, in a number of cases, including one involving Brown University ("Brown I"), the Board rejected arguments that the work of research assistants, teaching assistants and similar graduate student positions were closely tied to their degree requirements such that it constituted more of an educational, rather than economic relationship and concluded that graduate assistants could be employees under the Act. Then, in 2004, in a second case involving Brown University ("Brown II"), the Board made a sharp return to its earlier position, expressly overruling NYU, and deciding that graduate student teaching and research assistants are not statutory “employees” under the NLRA. Based on Brown II, NYU withdrew recognition from its graduate assistants who had earlier voted for representation by the UAW. Eventually, a later group of graduate students organized again and petitioned for a union representation election at NYU in Manhattan and NYU’s then recently-acquired Polytechnic Institute in Brooklyn (separate election petitions were filed in the Manhattan and Brooklyn Regional Offices of the NLRB). The petitions were dismissed at the Region level, without a hearing, on the authority of the Brown II decision. The petitions were remanded for further consideration by the Board, but after a hearing, the petitions were again dismissed at the Region level on the authority of Brown II. The Board granted a request for review of the dismissal and asked for amicus briefs on whether Brown II should be overruled, setting the stage for yet another reversal . However, in November of 2013, NYU and the UAW reached an agreement, pursuant to which NYU agreed to recognize and bargain with the union if a majority of graduate assistants voted in favor of joining the union. The pending Board petitions were subsequently dismissed as moot, removing at least temporarily the possibility that the Board could once again reverse course and overrule Brown II. As we noted in an earlier post, the Board granted Northwestern University’s request for review of the recent Regional Director’s decision directing an election in a unit of grant-in-aid scholarship football players at Northwestern. Thus it seemed the stage was set for the Board to revisit the student/employee issue yet again. Yesterday, the Board issued a Notice and Invitation to File Briefs to interested parties in the Northwestern case. The Notice expressly raises six questions that parties were invited to brief. Question 2 is:
Insofar as the Board’s decision in Brown University, 342 NLRB 483 (2004), may be applicable to this case, should the Board adhere to, modify, or overrule the test of employee status applied in that case, and if so, on what basis?
It is now evident that the Board indeed has found the vehicle it needs to once again flip flop on the issue of students/employees.
In a not surprising development, the National Labor Relations Board announced today that it has granted Northwestern University’s Request for Review of the Regional Director’s decision directing an election among the University’s grant-in-aid scholarship football players, citing the existence of “substantial issues warranting review.” The NLRB will later issue a briefing schedule, which will invite amicus briefs from other interested parties. While the election among the University’s eligible student-athletes will still take place tomorrow, April 25, 2014, as scheduled, the ballots will be impounded, instead of counted, until after the NLRB issues its final decision.
As reported here last week, the NLRB’s Regional Director in Chicago has determined that those members of the Northwestern University football team who receive grants-in-aid are “employees” under the National Labor Relations Act. Even aside from the questionable basis for this conclusion, the Regional Director’s decision begs the question what are the possible unintended consequences of this decision? And there are quite a few, only some of which are mentioned below.
Perhaps the first unintended consequence is whether the Board’s determination, if upheld, will actually render these student athletes ineligible to play intercollegiate football. Under NCAA By-law 12.1.2, only amateurs are eligible for competition under NCAA rules. Therefore, student-athletes may not use their athletic skill for pay in any form in the sport in which they compete. If a student-athlete is receiving compensation for their services, as determined by the Regional Director, is that student-athlete now receiving “pay in any form in [their] sport” and as a result no longer an amateur able to compete? The irony of course is if that ends up being the NCAA’s interpretation of its by-law, that would of course defeat the very purpose behind unionizing in the first place. Moreover, this possibility is not dependent upon the student-athletes actually unionizing but rather on the mere fact that they are now “paid” for playing. It would seem that if bargaining actually resulted and any additional benefits were provided to these student-athletes, the likelihood of a loss of amateur status would be even greater.
For any other “employee” being “compensated” for their services, income tax is required to be paid on that compensation. While the test for an employee under the National Labor Relations Act may not be identical to the test used by the IRS, how far behind can taxation be? Using the numbers reported in the Regional Director’s decision for the value of the players’ grants-in-aid (as much as $76,000 per year at Northwestern), where is a player, or his family, going to come up with the cash to cover this tax bill?
In addition, if an employee for this purpose, do players now become employees for purposes of Workers’ Compensation law, and the exclusivity of relief against their “employer” for injuries incurred “on the job” (which may well be less than beneficial to players)?
Just how effective can collective bargaining even be in this circumstance? Colleges and universities are constrained by NCAA rules in terms of benefits that can be given to student-athletes, so it is hard to imagine how bargaining could result in “more” than what is currently provided student-athletes. In addition, the impact of Title IX would likely require any benefits provided to, for example, football players to be provided to a comparable number of scholarship student-athletes on women’s teams. Or more likely, the added cost of so complying with Title IX simply makes it that much less likely that any meaningful benefits would flow from bargaining. And would there be any institutional incentive to provide benefits to non-scholarship players, who even the Regional Director found were not employees? What would the impact be of some student athletes on a team having the benefits of collective bargaining and others not?
Of course, this ruling is presumably not limited to football teams and players. How does it impact other sports where perhaps only a minority of team members receive grants in aid (and therefore might be “employees” who can be covered by a collective bargaining agreement), but the majority do not (and therefore are not employees at all)?
In fact, this ruling presumably is not even limited to athletics. At some institutions, members of the marching band receive scholarships in return for the “services” they provide. Undoubtedly, they too are subject to various rules that constrain when and what they can and cannot do (for example, not schedule classes that conflict with afternoon practices). Other student activities (e.g., Debate at some institutions) also carry stipends or scholarships and likely subject participating students to certain rules not applicable to others. Are they all now “employees” eligible to organize? And given the Board’s willingness to recognize “micro-units,” will these all be separate bargaining units?
These are just some of the “unintended consequences” flowing from what appears on any number of levels to be an ill thought out determination, as the NLRB continues to attempt to make itself “relevant” in an era when traditional unionization of American workers remains at or near all-time lows.
Of course we may not know the answer to these questions for years to come. The nature of the NLRB review process in an organizing context makes it likely that this issue will not come before the courts, where it is most likely to be resolved, for many years to come.
In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the University) are “employees” under the National Labor Relations Act. In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.” Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University. In support of his decision, the Regional Director found that the players receive compensation for the athletic services they perform in the form of scholarships, which pay for the players’ tuition, fees, room, board, and books and can total as much as $76,000 per calendar year for up to five years. Furthermore, the Regional Director found that the players are under the strict control of the University throughout the year. The coaches determine the location, duration, and manner in which the players carry out their football-related activities; they monitor the players’ adherence to NCAA and team rules; and they control “nearly every aspect of the players’ private lives,” including their living arrangements, applications for outside employment, off-campus travel, social media posts, and communications with the media. In contrast, the Regional Director held that “walk-ons do not meet the definition of ‘employee’ for the fundamental reason that they do not receive compensation for the athletic services that they perform.” The University has confirmed that it plans to appeal the decision to the full National Labor Relations Board in Washington, D.C. If upheld, the decision has the potential to dramatically alter the world of big-time athletics in higher education as it would open the door for scholarship athletes at all private universities to unionize. Indeed, the decision could have implications for scholarship students in a number of areas beyond athletics. The Union, College Athletes Players Association (CAPA), which has the financial backing of the United Steelworkers, is seeking, among other demands, financial coverage for former players with sports-related medical expenses and the creation of an educational trust fund to help former players graduate.
The National Labor Relations Board’s treatment of college and university students as “employees” covered by the National Labor Relations Act has been the subject of a tortured history. In the Fall of 2000, in a case involving NYU, the NLRB 