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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