As expected, Northwestern University (the “University”) has filed its Request for Review of NLRB Regional Director Peter Sung Ohr’s controversial March 26 decision that scholarship football players at the University are “employees” entitled to union representation. The Regional Director’s decision came in response to the football players’ January 2014 filing of a “Certification of Representation Petition,” or “RC Petition,” premised on the seemingly novel legal theory that Division I scholarship football players were employees of the University despite their amateur status.
In the Regional Director’s March decision, two primary factors were critical to the finding that the scholarship football players were employees: the value of the players’ scholarships and the extreme degree of control over players’ lives on which those valuable scholarships are conditioned. In particular, the Regional Director’s March decision found:
• That the football players perform services for the University in exchange for a “substantial economic benefit” – i.e., their scholarships, which typically total totaling $61,000 each academic year including tuition, fees, books, room and board, and in some cases in excess of $250,000 over the course of a player’s University football career. For student-athletes who take summer classes, the annual value of a football scholarship at the University can be as high as $76,000.
• That the high degree of control that the University exercises over its football players’ lives, including personal conduct requirements and time commitments to their sport – as much as 40 to 50 hours per week during the football season – is indicative of an employment relationship. As noted by the Regional Director, the football players’ are governed by a “handbook” that establishes in great detail how they must conduct themselves.
• That the revenue generated by the University’s football program supports the finding the scholarship players are employees. Even at a prestigious private university such as Northwestern, which is not in the same league revenue-wise as the big time football schools, the Regional Director noted that the football program had operating profits of approximately $75 million in the 10 years preceding the hearing, and had operating profits of about $8.4 million in the 2012-2013 academic year alone.
• That the football players’ situation was different than the graduate assistants in Brown University, 342 NLRB 483 (2004), because, unlike the grad assistants in Brown University, the football players “are not ‘primarily students,’” the scholarship players football duties do not constitute a core element of their educational degree requirements, the University’s academic faculty does not supervise players’ athletic duties, and the scholarship players’ “compensation” is not financial aid.
• That the football players were not “temporary” employees under the Act, even though their “employment” is for a finite term.
Based on these findings, the Regional Director concluded that the scholarship football players were “employees” under Section 2(3) of the Act, as interpreted by the U.S. Supreme Court in NLRB v. Town & Country Electric, 516 U.S. 85, 94 (1995) to include the common law definition of employee – in other words, “a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.”
The University’s Request for Review, filed April 9 and available here on the NLRB’s web site, attacks each of these key conclusions of the Regional Director’s March ruling, arguing in the process that the NLRB Regional Director improperly placed the burden of proof on the University, committed clear error on substantial fact issues, and incorrectly applied NLRB precedent. In a particularly direct attack, the University accuses the Regional Director of shading the factual record and writes that “the Regional Director’s decision reads like a brief submitted by an advocate, with the facts he chooses to stress set out in the text of the decision and those which are equally important but which do not support his pre-determined outcome relegated to footnotes or completely ignored.”
In a clear sign that the case has become a political issue with broader import than its impact on the actual parties, the University argues that the NLRB Regional Director’s decision fails to consider the practical effects of giving scholarship student athletes employee status:
• That unionization of student athletes would create “chaos” due to the variation in state and federal labor laws;
• That employee status would have tax implications for student athletes if scholarships are re-characterized as income;
• That NCAA regulations, including prohibitions on economic benefits to student athletes, would prevent the football players from achieving their collective bargaining objectives; and,
• That extending collective bargaining rights to the University’s football players would have Title IX consequences by requiring gender equity for so-called “non-revenue” money-losing sports at the University.
Many commentators believe the NLRB will deny the University’s Request for Review, which given the stakes, all but ensures the players’ status ultimately will be resolved by a federal appellate court. However, it is important to note that although everyone in the higher education community is carefully watching this proceeding, the NLRB’s jurisdiction is limited to only private employers, i.e., not the public universities that mostly dominate the Saturday gridiron.
The case is College Athletes Players Association (“CAPA”) v. Northwestern University, NLRB Case 13-RC-121359.
D. Shane Jones, a shareholder, and Kameron W. Murphy, an associate, practice with Tueth Keeney Cooper Mohan & Jackstadt P.C. in the areas of education law and labor and employment defense. To further discuss how this decision may impact higher education, or to discuss higher education legal issues in general, please contact Tueth Keeney’s Missouri office at (314)880-3600 or the firm’s Illinois office at (618)692-4120.
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