What the National Labor Relations Board opinion means for college football players

Published 28 April 2017 | Authored by: John Wolohan

 On 3 April 2017, the University of North Carolina defeated Gonzaga University for the 2017 men’s National Collegiate Athletic Association (NCAA) basketball championship. The game culminated what is a three-week long event featuring the 68 “best[1] college teams in the USA known as “March Madness”. 

The NCAA tournament is called “March Madness” because for the entire month of March, college basketball dominates the sports market place in the United States with games televised non-stop from Thursday to Sunday. In order to win the NCAA championship, which was played in front of a crowd of over 77,000 and seen on television by over 23 million viewers,[2] the players involved will have had to travel around the country playing in a series of mini-tournaments where the winner moves on to the next round and the loser goes home.

With so any people watching the tournament, it is easy to see why television networks CBS and TBS are willing to pay the NCAA close to a billion dollars a year for the television rights to the basketball tournament.[3] With so much money flowing into the coffers of the NCAA and universities, however, it is not surprising that this is also the time of year when many people wonder why the athletes do not get paid a share of all the revenue. 

This article examines the issue, which largely revolves around the question of whether student athletes can be considered “employees” (and their respective Universities “employers”), in light of a recent opinion letter issued by the General Counsel of the National Labor Relations Board. Specifically, it looks at:

  • Background to the debate, and the two sides of the argument over whether college athletes should receive great remuneration;

  • The legal challenges to date;

  • The recent opinion issued by the General Counsel of the National Labor Relations Board; and

  • The future of the issue 

 

BACKGROUND: the two sides of the argument

In the United States, under NCAA rules, college athletes are only permitted to receive grant-in-aid scholarships covering the cost of attendance, room and board, books and other incidentals in exchange for performing on the court. The NCAA and the schools argue that the education and professional services the athletes receive while at school, anywhere from $200,000 to $500,000 over four years, is an appropriate exchange of value for the amount on money the player generate for the NCAA and schools.[4] 

However, critics argue that the schools are exploiting the athletes and should actually pay them a salary. In support of this argument, critics point to the fact that many basketball players at elite level are so busy traveling around the country playing games for their school that they are unable to attend classes and actually get the education they were promised.[5] 

 

THE LEGAL CHALLENGES TO DATE

In the last few years, the debate over whether or not college athletes should be better compensated (as mentioned above, they are arguably “compensated” via educational benefits) has moved from the campuses to the courtrooms, with a number of lawsuits challenging the NCAA restrictions on greater compensation to college athletes. 

The legal challenges are on two theories.

  • The first theory involves antitrust law. Under this theory, the athletes have argued (see below) that NCAA rules limiting player compensation violate federal antitrust law. In particular, the athletes claimed that NCAA rules prohibiting player compensation violate Section 1 of the Sherman Antitrust Act, which prohibits restraints of trade. While college athletes had some limited success using antitrust law in O'Bannon v. NCAA,[6] when the court ruled that the NCAA was in violation of the antitrust laws, they have yet to show that the restraints on athlete compensation are unreasonable. Although unsuccessful in O'Bannon, another major antitrust challenge facing the NCAA is already in the courts. In Jenkins.,[7] the athletes are asking the courts to strip the NCAA of the right to set compensation limits for college athletes.[8]
  • The second legal theory is based in labor law. In particular, the players argue that under the National Labor Relations Act’s (NLRA) definition of employees,grant-in-aid scholarship football players should be considered employees. The NLRA defines employee to include “any employee . . . .".  While not the most helpful definition, the United States Supreme Court in applying the NLRA’s broad definition of “employee” has ruled that an employee is any 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.[9] It was based on this definition that in 2014 the National Labor Relations Board (NLRB) Regional Director in Chicago, Peter Sung Ohr found that due to the control the coaches have over their players throughout the year and the amount of time the athletes were required to commit to their sports the players were employees under the Act. For a more detailed analysis of the Regional Director’s 2014 decision, see this LawInSport article by the author.[10]

The decision of the Regional Director was eventually overturned on appeal in 2015 when the full Board in Washington DC refused to accept jurisdiction over the case, ruling that accepting jurisdiction over the case would not serve to promote stability in labor relations. By denying jurisdiction, the Board effectively denied the athletes the right to unionize and collectively bargain. For a more detailed analysis of the Board’s 2015 decision, see this LawInSport article by the author.[11]

Although the NLRB left open the possibility that it could at some future time assert jurisdiction in another case involving grant-in-aid scholarship athletes, most legal scholars felt that by refusing jurisdiction in the Northwestern case the Board did not want to address such a potentially political issue and that the issue was dead.[12]

 

OPINION OF THE NRLB’S GENERAL COUNSEL

It therefore came as a big surprise when Robert F. Griffin, General Counsel at the NLRB, issued an official opinion letter on January 31,[13] 2017 stating that every athlete at all of the 17 private colleges in the Football Bowl Subdivision (FBS) will now be considered an employee in all future litigation brought before the Board.[14] While opinion letters do not have the legal weight of a court decision, such letters are attempts by the General Counsel to provide policy guidance on certain areas to the regional offices. In this case, since there was some debate over the employment status of college athletes, the purpose of the letter was to provide some clarification on the athlete’s employment status. 

As employees, the athletes are now entitled to the protections under section 7 of the NLRA and can engage in concerted activities (attempting to unionize) for the purposes of improving their working condition and if successful, they can collectively bargain over working conditions and even to seek compensation. [15] In fact, under the NLRA, the players do not even need to form a union to avail themselves to the protections of the Act. As employees protected by the NLRA, the players can demand to meet with coaches and administrators to talk about working conditions, such as practice schedules or contact drills without fear of losing their scholarships. 

Once an employee makes a formal demand on the school, the school (as employer) must respond in good faith. If a university ignored the request, threatened to punish the athlete for their union activity, or attempted to interfere in any way with an attempt by players to establish a union or negotiate working conditions, the university would be committing an unfair labor practice in violation of the NLRA. [16] It should be noted however that while the universities have to listen to the players, they are not obliged to agree to the players' demands. If the schools cannot afford the athletes demands, they do not have to meet them. However, this could lead to the first strike of college players.

The 17 universities are: Baylor; Boston College; BYU; Duke; Miami (Florida); Northwestern; Notre Dame; Rice; Southern Methodist; Stanford; Syracuse[17]; TCU; Tulane; Tulsa; USC; Vanderbilt and Wake Forest. The official opinion letter only deals with the 17 private universities because the NLRB does not have jurisdiction over public colleges and universities. It is important to note that even though the athletes at private universities are now considered employees, they still must unionize in order to gain the right to collectively bargain.[18]

As for athletes at public universities, this letter has no impact on them at all since they are covered under their individual states labor statutes, not the federal code. That being said, if the 17 private schools are forced to provide certain benefits to their athletes, there is a good chance that the public schools in the Power 5 conferences will attempt to match them. The letter was delivered to all of the NLRB's regional directors, and is a significant expansion of the 2014 decision, which only held that those players who received scholarships to play football for Northwestern met the definition of employees within the meaning of the Act.

 

The Future 

While no athlete at any of 17 private schools has indicated that he or she has any plans to ask the NLRB for a union certification vote at the present time, supporters of college athletes’ rights claim that the letter is a clear signal that the question of whether college football players are employees remains unsettled.[19]

Finally, although the opinion letter identifies the athletes as employees, any benefits won by the players could be short lived. Griffin is an appointee of President Barack Obama. With a new President and administration, a new head of the Board will probably appointed when Griffin’s term as General Counsel ends in November. In addition, the five-member board will also flip from a Democratic majority to Republican under the new administration, and the new Board should be expected to be less sympathetic to organized labor will look at this issue very differently. [20] 

 

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About the Author

John Wolohan

John Wolohan

John Wolohan is an Attorney and Professor of Sports Law in the Syracuse University Sport Management program and an Adjunct Professor in the Syracuse University College of Law. In addition to being one of the lead editors of the book "Law for Recreation and Sport Managers" by Cotten and Wolohan, John has been teaching and working in the fields of doping, antitrust, gaming law, and sports media rights for over 25 years.

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