A hearing before a Los Angeles administrative law judge could forever change the nature of college sports.
On May 18, the National Labor Relations Board filed a lawsuit against the University of Southern California, the Pac-12 Conference, and the National Collegiate Athletic Association, alleging that these entities, acting in concert, illegally misclassified athletes scholarships as “student-athletes” rather than against the University of Southern California, the Pac-12 Conference and the National Collegiate Athletic Association. as “employees”.
This complaint follows an extraordinary situation memorandum published by the NLRB General Counsel on September 29, 2021, which took the same position. The NLRB is now putting its analysis into practice during the administrative hearing that began on November 7.
The legal theory behind the NLRB’s case is fairly simple, although the consequences of a positive outcome could be catastrophic for college sports. According to the NLRB, college athletes receive money in the form of scholarships in exchange for “services”: playing college sports. Universities, conferences, and the NCAA exert control over the lives of these athletes in the form of strict rules governing their eligibility, training, game schedules, and other aspects of their athletic and personal lives.
By this equation, these athletes are “employees” entitled to the benefits of federal and state labor laws. This would include the right to unionize and strike, access to unemployment and workers’ compensation benefits, liability under laws prohibiting discrimination in the workplace, disability benefits, Improved health care and other benefits prescribed by law or obtained through collective bargaining.
Unionization efforts on college campuses extended to sports in September, when the Dartmouth men’s basketball team filed a petition with the NLRB to unionize, the first collegiate team to do so since the unsuccessful efforts for the Northwestern University men’s soccer team in 2014.
In the Northwestern case, the NLRB’s Chicago regional director ruled that football players were employees entitled to the benefits and protections of federal labor laws. On appeal to the NLRB board in Washington, the board reversed that decision and declined to rule on the employee issue on narrow jurisdictional grounds.
The NLRB does not have jurisdiction over public colleges and universities; Although Northwestern is a private university, 108 of the 125 teams in the NCAA Division I Football Bowl are public schools. Table declined his jurisdiction in the Northwestern case on the grounds that issuing a ruling in a single case involving a single team “would not promote the stability of labor relations within the league.” Frankly speaking, the board has looked into the matter – pun fully intended.
And that’s where the NLRB’s allegation that concerted action by USC, the Pac-12 Conference and the NCAA comes into play. The NLRB accuses them of being “employers spouses” as they all have rules, regulations and policies that exercise significant control. on the lives of athletes. Joint employers may be liable together for unfair labor practices and other violations of the NLRA.
This “co-employer” theory in the context of college sports is not new. The NLRB’s General Counsel specifically cautioned against its applicability in his September 29, 2021 memorandum. In the case of the USC, the NLRB uses the joint employer theory to lay the groundwork for exercising jurisdiction over public colleges and universities which, as noted above, make up the vast majority of FBS schools.
Although USC is a private institution, if the Pac-12 and the NCAA are determined to be “joint employers” with USC and therefore subject to the NLRA and the rules and regulations of the NLRB, this decision could also s ‘extend to public school athletes. .
A similar question is now before the federal Third Circuit Court of Appeals in Philadelphia. In this case, former Division I athletes filed lawsuits against several universities under the federal Fair Labor Standards Act and state labor laws, arguing that they were “employees” deserving of minimum wage and overtime during their playing days. The trial court sided with the athletes, and the case is now on appeal to the Third Circuit. A much-anticipated decision is expected any day now.
But the “employee” classification, while perhaps beneficial for athletes, also has other consequences. If an athlete is an employee, there is no limit on what the college or university can pay them. This will lead to an arms race in which the richest schools, with the biggest budgets, will be able to offer the highest salaries.
And what about scholarship athletes in so-called non-profit sports, other than football and basketball? Will they be paid too? Will a member of the men’s tennis team or women’s volleyball team receive a salary, and how will that compare to a star quarterback’s compensation?
This brings us to the issue of Title IX, the federal law that states that men and women have equal opportunities to participate in sports. One of the financial requirements of Title IX is that aggregate scholarship money for all athletic programs at a university must be divided proportionally between men and women in the same ratio as their participation rates. What happens to this calculation when salaries, bonuses and benefits are factored into the financial package provided to an athlete?
The NCAA, athletic conferences and schools sought refuge in Congress. Several bills have been introduced that would specifically exclude college athletes as “employees.” On October 17, the Senate Judiciary Committee detained a hearing on this issue. But with the current dysfunction in Washington, there appears to be little hope for a legislative solution in the near term.
This article does not necessarily reflect the views of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author information
Kenneth A. Jacobsen is Professor of Practice at Temple University’s Beasley School of Law and Director of its Sports Law Program.
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