College Athletes Players Association v. Northwestern UniversityJohn Wolohan
In this article, John Wolohan explores the recent landmark “Northwestern University” decision, in which the National Labor Relations Board in Chicago ruled that scholarship football players attending the University were “employees” for the purpose of the National Labor Relations Act, thus entitling them - among other things - to unionize and partake in collective-bargaining for employment rights. John continues to reflect on the wider implications the decision may have for college athletics in the United States.
In my last post, I talked about the impact various antitrust lawsuits were going to have on college athletics in the United States. In particular, the article examined the various antitrust challenges to the National Collegiate Athletic Association (NCAA), the organization that governs college athletics in the United States, and the entire college sports model. Currently, in the United States, colleges can offer athletes a one year scholarship to attend the school, which usually covers tuition, books, room and board, in exchange for their athletic participation. However, with the NCAA and some universities making millions of dollars from their athletic programs, athletes have begun challenging this system claiming that it illegally caps their wages at the cost of the scholarship.
In this post, I would like to examine College Athletes Players Association (CAPA) v. Northwestern University, Case 13-RC-121359 and the attempt by CAPA, a labor organization, to represent a group of Northwestern University scholarship football players. In particular, CAPA is claiming that those football players who receive grant-in-aid scholarships from the Northwestern are "employees" under the National Labor Relations Act (the Act), and are therefore entitled to choose whether or not to be represented for the purposes of collective-bargaining. Northwestern, on the other hand, claims that football players receiving scholarships are not employees under the Act and therefore have no right to be represented by a labor union for the purposes of collective-bargaining. 1
On March 26, 2014, the regional director for the National Labor Relations Board (NLRB), Region 13 in Chicago, Peter Sung Ohr held that the common law definition of “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.2 Appling this common law test, the Board determined that those players who received scholarships to perform football-related services for Northwestern were working under a contract for hire in return for compensation and were subject to Northwestern's control and are therefore employees within the meaning of the Act. Accordingly, the NLRB ordered that an election be conducted to determine whether the majority of scholarship football players at Northwestern who have not exhausted their playing eligibility wished to be represented by CAPA.3
In support of his finding, Ohr pointed to the fact that the players (both scholarship players and walk-ons) are subject to special rules that the regular Northwestern student population is not subject to. For example, if a player wants to obtain outside employment, they must first obtain permission from the athletic department. The purpose of the rules, the Board found, is so that Northwestern can monitor whether the player is receiving any sort of additional compensation or benefit because of their athletic ability or reputation. Similarly, players are required to disclose to their coaches detailed information pertaining to the vehicle that they drive. The players must also abide by a social media policy, which restricts what they can post on the internet, including Twitter, Facebook, and Instagram. In fact, the players are prohibited from denying a coach's "friend" request and the former's postings are monitored. In addition, the players are prohibited from giving media interviews unless they are directed to participate in interviews that are arranged by the Athletic Department. Players are prohibited from profiting off their image or reputation, including the selling of merchandise and autographs.4 Players are also required to sign a release permitting Northwestern and the Big Ten Conference to utilize their name, likeness and image for any purpose.5 (The Big Ten is a group of 12, soon to be 14, universities that make up one of the five major college athlete conferences in the United States. Made up mostly of large public universities in the Mid-West, the Big Ten Conference in 2006 launched its own television network which shows athletic events between member schools and is broadcast into over 51 million homes in the United States and 20 countries internationally and generates tens of millions of dollars for the member schools.) The players are subject to strict drug and alcohol policies and must sign a release making themselves subject to drug testing by Northwestern, Big Ten Conference, and NCAA.6 Even the players' academic lives are controlled as evidenced by the fact that they are required to attend study hall if they fail to maintain a certain grade point average (GPA) in their classes. And irrespective of their GPA, all freshmen players must attend six hours of study hall each week.7
In addition to the special rules the players must follow, the NLRB also found that the players who receive scholarships are under strict and exacting control by Northwestern the entire year. Commencing with training camp which begins approximately six weeks before the start of the academic year, the players are required to devote 50 to 60 hours per week on football related activities. Once classes start, the NLRB found that the players must to devote between 40 to 50 hours per week on football related activities.8 During this time, the players are under the complete control of the coaches. The Board noted that even though the NCAA rules limits “countable athletically related activities” (CARA) to 20 hours per week from the first regular season game until the final regular season game (or until the end of Northwestern's Fall quarter in the event it qualifies for a Bowl game). The CARA total do not include such activities such as travel, mandatory training meetings, voluntary weight conditioning or strength training, medical check-ins, training tape review and required attendance at training table.9 Even when the season is over, the Board found that the players were required to devote an additional 20 to 25 a week to mandatory meetings, strength and conditioning sessions and other workouts conducted by the football team's coaches.10
The football coaches are able to maintain control over the players by monitoring their adherence to NCAA and team rules and disciplining them for any violations that occur. If a player arrives late to practice, they must attend one hour of study hall on consecutive days for each minute they were tardy. The players must also run laps for violating minor team rules. And in instances where a player repeatedly misses practices and/or games, he may be deemed to have voluntarily withdrawn from the team and will lose his scholarship. In the same way, a player who violates a more egregious rule stands to lose his scholarship or be suspended from participating in games. In addition, the coaches have control over nearly every aspect of the players' private lives by virtue of the fact that there are many rules that they must follow under threat of discipline and/or the loss of a scholarship. The players have restrictions placed on them and/or have to obtain permission from the coaches before they can: (1) make their living arrangements; (2) apply for outside employment; (3) drive personal vehicles; (4) travel off campus; (5) post items on the Internet; (6) speak to the media; (7) use alcohol and drugs; and (8) engage in gambling.11
In addition, the Board found that the players perform valuable services for Northwestern. For example, monetarily, the Northwestern football program generated revenues of approximately $235 million during the nine year period 2003 — 2012 through its participation in the NCAA Division I and Big Ten Conference that were generated through ticket sales, television contracts, merchandise sales and licensing agreements. As a result of the profit realized from the football team's annual revenue, Northwestern was able to fund the school's non-revenue generating sports (i.e. all the other varsity sports with the exception of men's basketball). This, in turn, assists the Northwestern in ensuring that it offers a proportionate number of men's and women's varsity sports in compliance with Title IX of the Education Amendments of 1972.12
Finally the Board found that the scholarships are an exchange of economic value, whereby the schools provide a scholarship in exchange for the athlete’s services. Indeed, the monetary value of these scholarships totals as much as $76,000 per calendar year and results in each player receiving total compensation in excess of one quarter of a million dollars throughout the four or five years they play football for Northwestern. While it is true that the players do not receive a paycheck in the traditional sense, they nevertheless receive a substantial economic benefit for playing football. And those players who elect to live off campus receive part of their scholarship in the form of a monthly stipend well over $1,000 that can be used to pay their living expenses.13 Equally important, the Board found that the type of compensation that is provided to the players is set forth in a "tender" that they are required to sign before the beginning of each period of the scholarship. This "tender" serves as an employment contract and also gives the players detailed information concerning the duration and conditions under which the compensation will be provided to them. In addition, the Board found that it was clear that the scholarships that players receive were in exchange for the athletic services being performed, which the Head football coach could immediately reduce or cancel if the player voluntarily withdraws from the team or abuses team rules.14 Based on the above facts, the Board found that the players met the definition of employee who performs services for Northwestern under a contract of hire, subject to the other's control or right of control, and in return for payment.
On April 9, 2014, Northwestern University formally filed a "request for review" of the ruling by the five-member NLRB based in Washington.15 In their appeal, Northwestern claimed that Peter Sung Ohr mischaracterized the scholarship offer as an employment contract and ignored relevant facts when ruling that the school’s football players are employees of the university. The requested appeal, which must now be heard by the entire five person National Labor Relations Board, is probably too little too late to stop the players from voting on whether they would like to be represented by CAPA. The vote is scheduled for April 25 and in order for the CAPA to represent the players, a majority of scholarship players would have to vote in favor of representation. While the election could be delayed if the board accepts the requested review, most people believe that it is unlikely, and that the Board will allow the election to take place. If that happens, the votes likely would be kept secret and not opened until any appeal by Northwestern works its way through the federal courts, which could take years.16
While the issue involving Northwestern’s athletes now rest with the NLRB, the outcome of the case has implications on other colleges in the NCAA as well. For example, if this ruling is upheld and the athletes are considered employees, the decision will also extend to the 17 other private universities that play football at the highest level, including Syracuse University, where I teach. Although the decision will only officially impact private universities, since NLRB decisions only apply to private employers, it would seem logical that athletes at state universities would also move to unionize as well. As for the actually cost to the schools, while there are a lot of gloom and doom scenarios being thrown around by Northwestern and the NCAA, who have claimed that the unionization of college athletes will cause universities to cut sports and opportunities for athletes, there can be little doubt that if the athletes are considered employees the cost of running an athletic program will raise. However, with colleges now paying football and basketball coaches millions of dollars in salary, it is hard to believe that the schools could not absorb any additional cost associated with the decision.
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- Tags: American Football | Basketball | Employment Law | Governance | NCAA | Northwestern University | Regulation | United States of America (USA)
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About the Author
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.