Student-Athletes Are What Under The NLRA?

By:  Betty S.W. Graumlich & Pakapon Phinyowattanachip
Reed Smith LLP
Richmond, Virginia

In a game-changing decision issued on March 26, 2014, Peter Sung Ohr, the Regional Director for Region 13 of the National Labor Relations Board (“NLRB”), held that scholarship football players at Northwestern University are “employees” within the meaning of the National Labor Relations Act (“Act”). Northwestern Univ. v. Coll. Athletes Players Ass’n, Case 13-RC-121359 (NLRB Region 13 Mar. 26, 2014) (http://www.nlrb.gov/case/13-RC-121359).

Mr. Ohr’s holding effectively ignores the definition of “employee” articulated in Brown University, 342 NLRB 483 (2004), the seminal NLRB decision on the subject. In Brown, the NLRB found that graduate assistants are not “employees” because the relationship between the graduate assistants and the university was “primarily educational” rather than an “economic relationship.” Id. at 488. Ignoring the reasoning in Brown, Mr. Ohr relied on the common law definition of “employee” as “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.” Northwestern, Case 13-RC-121359, at *1. Mr. Ohr concluded that “players receiving scholarships to perform football-related services for the Employer under a contract for hire in return for compensation are subject to the Employer’s control and are therefore employees within the meaning of the Act.” Id. at *14.

Three factors underpin Mr. Ohr’s analysis. First, the football program generated $235 million from 2003 to 2012 through ticket sales, television contracts, merchandise sales, and licensing agreements. The University also received less quantifiable, but nevertheless “great benefit,” from “alumni giving and increase in number of applications for enrollment at the University.” Id.

Second, the scholarship, totaling $76,000 per year, was a substantial economic benefit that constituted compensation for athletic services. Indeed, the formal “tender” for which student-athletes must sign to receive a scholarship “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.” Id. “[T]he scholarship is clearly tied to the player’s performance of athletic services as evidenced by the fact that scholarships can be immediately canceled if the player voluntarily withdraws from the team or abuses team rules.” Id. at *15.

Third, the University had “strict and exacting control” over student-athletes. Student-athletes spent 50-60 hours per week on football-related activities during spring camps and 40-50 hours per week during the season. In addition, they must obtain permission before they can make off-campus living arrangements; apply for employment; drive personal vehicles; travel off campus; post on social media websites; and speak to members of the media. Id. at *16.

Significantly, as noted above, Mr. Ohr held that Brown “does not control whether the grant-in-aid players are employees.” Id. at *18. Unlike graduate assistants, whose interest at the University was “primarily an educational one, rather than economic one,” and whose “research duties were inextricably related to their graduate degree requirements,” football-related activities are unrelated to the players’ academic studies. Id. “[I]t is undisputed that… scholarship players do not receive any academic credit for playing football. They are also not required to play football in order to obtain their undergraduate degree….” Id. at *19.

Given the significance of the issue presented, the NLRB has granted the University’s request for review of this decision. The Request for Review is available for download at http://www.nlrb.gov/case/13-RC-121359. Affirmance of this decision would be truly game-changing, providing for collective bargaining between scholarship football players and the University over the terms and conditions of their “employment.”

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California Institutions Should Review Title IX Compliance in Athletics ASAP

By:  Natasha J. Baker
Hirschfeld Kraemer LLP
San Francisco, CA

On January 13, 2014, Mr. Mark Rossmiller, an individual with no apparent connection to OCR or any of the schools in question, filed a total of 121 complaints against California colleges and universities with the OCR San Francisco office, alleging that they were not in compliance with the athletic participation requirements of Title IX. The complaints allege that the institutions are discriminating against female students in intercollegiate athletics by not providing equal athletic opportunities for members of both sexes.   In the complaints, Mr. Rossmiller provided athletic participation data from the Equity in Athletic Disclosure Act reports for the 2007 to 2013 academic years. With regard to each institution, he alleged that the participation data was sufficient to establish that the institutions did not provide substantially proportional opportunities for female students to participate in athletics, and that the participation gap was sufficient to establish that these institutions do not have a history and continuing practice of expanding programs for female students under parts 1 and 2 of OCR’s three-part test for determining Title IX compliance. He further alleged that these institutions failed to satisfy part 3 of the three-part test because they cannot demonstrate that they are fully and effectively accommodating female students’ interests and abilities in athletics.

In response, OCR SF asked Mr. Rossmiller to provide additional information to evaluate the complaints, specifically additional information that the circumstances demonstrate that female students at these institutions were not provided equal opportunities to participate in intercollegiate athletics. OCR SF asked Mr. Rossmiller to provide them with this additional information by March 11.   OCR SF dismissed the case on March 11, finding that the data Mr. Rossmiller provided was not recent and therefore was untimely.

Mr. Rossmiller then filed a complaint against OCR SF and the institutions with the DOJ Civil Rights Division, Department of Educational Opportunities, alleging that OCR SF failed to fully investigate his claims or enforce violations of Title IX regulations.

Currently, there is no response from the DOJ regarding whether they will conduct an investigation and instruct OCR SF to perform investigations as well. We will keep you apprised of any new information we learn.

Supreme Court Strikes Down Affirmative Action In Public Universities Again

By:  Euphemia Thomopulos
Hirschfeld Kraemer LLP
San Francisco, CA

On April 22, 2014, in Schuette v. Coalition to Defend Affirmative Action et al. (No. 12–682), the Supreme Court upheld a Michigan law that bans public colleges and universities, community colleges and school districts from offering preferential treatment to any individual based on their race, sex, color, ethnicity, or national origin in the context of public employment, public education or public contracting. A narrowly divided Sixth Circuit previously ruled that the law violated the equal protection clause by denying a fair political process to minorities. The Court, divided 6 to 2, with Justices Sotomayor and Ginsberg dissenting and Justice Kagan recusing herself, held that Michigan’s Proposal 2, subsequently enacted as Article I, §26, of the Michigan Constitution, did not violate the equal protection clause because it does not run the risk of causing specific injuries on account of race, as did laws struck down in Hunter v. Erickson, 393 U. S. 385 (1969) and Washington v. Seattle School Dist. No. 1, 458 U. S. 457 (1982), holdings that the Sixth Circuit relied upon in making its decision.    The majority declined to comment on the effects of race-conscious policies, noting that the issue before it was not the constitutionality, or the merits, of race-conscious admissions policies in higher education but rather whether, and in what manner, state voters may choose to prohibit the consideration of racial preferences in governmental decisions, in particular with respect to school admissions.

The impact of the Court’s decision remains to be seen.  University of Michigan President Mary Sue Coleman and admissions director Ted Spencer have decried the affirmative action ban, saying outright that the school cannot achieve a fully diverse student body with it in place.  Currently, African-American students comprise just 4.6 percent of undergraduates at the University of Michigan, compared to 8.9 percent in 1995 and 7 percent in 2006.

Ultimately, however, we expect that like other recent affirmative action cases, this case will have very little precedential value for colleges and universities for two reasons.  First, the Court did not rule on the constitutionality of affirmative action, but rather whether a state could ban affirmative action.  Second, like most recent affirmative action cases, this case was decided on the very specific circumstances involved with the Michigan initiative.

At the same time, the case does show this Court’s willingness to delve into affirmative action issues, particularly as they affect public education.  More challenges to affirmative action policies can certainly be expected.

Natasha Baker Comments on Law360 Regarding SCOTUS Affirmative Action Decision

Hirschfeld Kraemer LLP Partner Natasha J. Baker is quoted in the Law360 article “Lawyers Weigh In On High Court’s Affirmative Action Ruling,” recapping the high court’s decision in the case Schuette v. Coalition to Defend Affirmative Action.

Baker offered the following:

The court’s ruling in Schuette, upholding Michigan’s ban on consideration of race as a factor in admissions, impacts the integrity of the political process and diversity in higher education. Its impact on the political process is the mathematically obvious problem that the minority can never overcome the majority of voters, which is permissible in a democracy, unless the legislation burdens only a racial minority. Rejection of this doctrine erodes this critical limitation. Its impact on diversity in higher education can be predicted by the immediate and sustained decrease in minority admissions following California’s passage of comparable legislation in 1996.