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The End of College Football As We Know It?

By Thomas P. Brady / Mar 31, 2014

The Director for Region 13 of the National Labor Relations Board (NLRB), has found that grant-in-aid scholarship students who play football for Northwestern University's varsity football team are employees as defined by the National Labor Relations Act (Act) and can vote in a representation election to be represented by the College Athletes Players Association (CAP). Northwestern University and College Athletes Players Association, NLRB Case NO 13-RC-121359.

The ability of college athletes to form and join unions raises a number of issues which could end college sports as we know it.  If the scholarship college football players are paid, will college basketball players begin to organize?  Does a college have to pay its female scholarship athletes under Title IX if the male scholarship athletes are paid more than their scholarships?  If college athletes are injured while engaged in athletic are they entitled to workers' compensation?  If college scholarship athletes are employees will the college have to provide health insurance under ACA?  The answer to these questions may well make the cost of providing scholarships to college athletes impractical.

CAP filed a petition, under Section 9(c) of the Act, seeking to represent the scholarship football players in Northwestern University's varsity football program.  The University has 112 players on its football team.  The players have a 97% graduation rate.  Eight-seven of the players receive scholarships for playing football.  The scholarships pay for the players' tuition, fees, books and room and board for the first two years.  Third and fourth year students, who live off campus, receive a monthly stipend of between $1,200 and $1,600.  The team also has 27 walk-on players who do not receive scholarships and who CAP did not include in the proposed bargaining unit.  The regional director's Decision and Direction of Election details the amount of time the players spend preparing for and playing football; the amount of control the coach and staff exert over the players; and the revenues generated by the program.

The regional director cited § 2(3) of the Act which states that "the term 'employee' shall include any employee..."  Using the definition of "employee" contained in Brown University, 342 NLRB 483, 490, fn 27 (2004), the regional director held that an employee is "a person who performs services for another under a contract of hire, subject to the other's control or right of control in return for payment."

The regional director found that the players perform athletic services for the University, generating $235 million in revenues over the last nine years.  He also found that they received compensation for these services in the form of scholarships which were valued at as much as $76,000 per calendar year.  In addition, the scholarship students received tender letters, setting out the terms of the scholarships, which acted as employment contracts.  The University, through its coaching staff and football program exerted control over the players performance of their duties as football players.  Based on these findings, the regional director held that the scholarship players were employees.

The regional director excluded the walk-on players because they "have nothing tying them to the football team except 'love of the game' and the strong camaraderie that exist among players.  He also limited the players who could vote in the representation election to players who are currently receiving scholarships and who have not exhausted their four or five years of NCAA eligibility, and incoming freshman who have begun to perform athletic services for the University.

Northwestern has said it will appeal the decision to the National Labor Relations Board.  The regional director has directed an election by secret ballot for the scholarship players to decide if they wish to be represented for collective bargaining purposes by CAP.  CAP needs to obtain votes from a majority of players voting to win the right to represent the players.  The regional director is setting a date for the election.  If CAP is successful, Northwestern will have to bargain with CAP over the wages, terms and conditions of the employment of the scholarship football players.  This would mean bargaining over wages, and benefits such as health care, which Northwestern might have to provide under the Affordable Care Act (ACA).

The decision in Northwestern University has limited applicability.  Northwestern is a private university and one of 17 Football Bowl Subdivision schools that are private institutions.  The National Labor Relations Act does not apply to States or political subdivisions of a State.  Scholarship students who play for public universities, like the University of Michigan or Michigan State cannot organize under the National Labor Relations Act.  However public universities in Michigan are subject to the Michigan Public Employment Relations Act (PERA) which allows public employees to organize together and join labor organizations.  While the Michigan Employment Relations Commission, which interprets PERA often follow NLRB precedent, PERA contains a different definition of employee than the one used by the Board, and its application could lead to a different result.

If you have any questions about please contact Thomas P. Brady at (313) 965-8291 or tbrady@clarkhill.com, or another member of the Labor and Employment Practice Group.