Back in the Game: NLRB General Counsel Says That Scholarship Football Players at Private Universities Are Employees Under the NLRA
On January 31, 2017, the General Counsel of the National Labor Relations Board released an official memorandum declaring that scholarship football players at some of the most elite college programs are employees under the National Labor Relations Act, with the full panoply of employee rights guaranteed under Section 7 of the Act. Section 7 gives employees the right to engage in protected, concerted activities, and to unionize. Section 8 of the NLRA prohibits employers from violating the Section 7 rights of employees by retaliating against them for engaging in union organizing activities or any other kind of protected, concerted activity regarding the terms and conditions of their employment.
As a result, scholarship football players at private institutions in the NCAA’s Division I Football Bowl Subdivision are, for now, entitled to file unfair labor practice charges, seek union representation, and advocate for better working conditions and benefits—including pay—without fear of retaliation, discrimination, or discharge. The General Counsel’s analysis may also empower other student-athletes to claim employee status under the NLRA, raising questions about the long-term future of amateurism in collegiate athletics.
The Memorandum arises out of the Board’s decision in August 2015 to decline jurisdiction over a petition for union representation filed by football players at Northwestern University. The Board determined that certifying the petition “would not promote stability in labor relations” because the proposed bargaining unit did not include players at competing FBS schools, many of which are public universities entirely beyond the reach of the NLRB’s jurisdiction. For that reason, the Board concluded that it did not need to resolve the issue of whether Northwestern’s players qualified as employees under the NLRA. The Board’s decision also left open the possibility that a petition on behalf of scholarship football players at all private FBS universities could be more successful, a suggestion that takes on additional significance in light of the Memorandum.
Specifically, the Memorandum asserts that the employee status of scholarship football players at private FBS schools finds clear support in both the language of the NLRA and several recent cases extending employee rights to other categories of student-workers. The General Counsel cited those cases as examples of the Board’s broad interpretation of the statutory definition of “employee,” and concluded that the absence of any exclusions for university employees, football players, or students “is itself strong evidence of statutory coverage.” Moreover, the General Counsel determined that the factual record developed in the Northwestern University case contains clear evidence that covered football players also qualify as employees under common law rules, which define an employee as any person “who performs services for another and is subject to the other’s control or right of control,” with payment being a strong indicator of employee status.
According to the Memorandum, all scholarship football players at private FBS schools satisfy the common law test. First, football players clearly provide services for their schools, as evidenced by the fact that Northwestern’s football program generated approximately $76 million in net profit during the ten-year period ending in 2012-2013 and, in addition, the program “provided an immeasurable positive impact to Northwestern’s reputation, which in turn undoubtedly boosted student applications and alumni financial donations.” Second, the players receive compensation in the form of scholarships that are conditioned on maintaining their player status. Finally, the universities exercise significant control over their players by virtue of the fact that they must ensure compliance with NCAA rules and academic requirements. As a result, the General Counsel concluded that all FBS scholarship football players “clearly satisfy the broad [NLRA] definition of employee and the common-law test.”
The immediate impact of the Memorandum may be significant for private universities with FBS football programs. Those schools could see an increase in union organizing efforts and unfair labor practice charges filed with the Board as their football players begin to exercise their newly-won rights. Although the Memorandum is not binding law, it does constitute a policy statement of the NLRB and reflects the position that it will take in enforcement proceedings involving student-athletes, at least in the short term.
Given the Board’s efforts in recent years to expand the scope of what constitutes “protected, concerted activity” under Section 7 of the NLRA, student-athletes will be empowered to speak out on a wide range of subjects free from retaliation or interference. In fact, the Memorandum specifically identifies some of the most contentious issues in college football as subjects of concerted activity that would be protected under Section 7. Examples of such protections include any actions to “advocate for greater protections against concussive head trauma and unsafe practice methods, reform NCAA rules so that football players can share in the profit derived from their talents, or self-organize, regardless of whether the Board ultimately certifies the bargaining unit.”
The Memorandum may also have a lasting impact on college sports more generally. Although its reach is limited to Division I FBS football players, the Memorandum clearly outlines each element of proof that players in other revenue-producing athletic programs (men’s basketball, for example) would need to satisfy in order to obtain employee status under the NLRA. As such, the extension of employee rights to Division I football players may signal the beginning of the end of what the Memorandum calls “the revered tradition of amateurism in college sports.” In the alternative, the General Counsel’s emphasis on “the enormous revenue generated by Division I FBS football programs” suggests that the Memorandum may result in a two-tiered system in which athletes in revenue-producing sports are able to exert their influence as statutory employees to obtain compensation and benefits that would not be similarly available to athletes in sports that do not produce significant revenue. The fact that the profitability and prestige of an athletic program are central to the inquiry of whether athletes qualify as employees may also make it more difficult for female athletes to claim employee status under the NLRA, as the number of revenue-producing women’s athletic programs is far smaller than the number of equivalent men’s programs.
Despite the immediate effect of the Memorandum, the long-term impact of the Memorandum is uncertain, given that it was issued by General Counsel Richard F. Griffin, Jr., an Obama-appointee whose term expires in November 2017. President Trump will appoint his replacement, as well as replacements for at least two of the three sitting Board members (out of five) (each of whom are Democratic appointees) and whose terms will also expire during the Trump administration. President Trump recently named the lone Republican on the Board, Phillip Miscimarra, as the Acting Chairman. A future Republican majority on the Board may ultimately choose to rescind the Memorandum and not treat student-athletes as employees.
If you have any questions about this Alert, please contact the authors, any member of Arent Fox’s Sports or Labor & Employment groups, or the Arent Fox professional who regularly handles your matters.