A hearing before an administrative law judge in Los Angeles could change the nature of college sports forever.
On May 18, the National Labor Relations Board filed suit against the University of Southern California, the Pac-12 Conference, and the National Collegiate Athletic Association, alleging that the organizations worked together to illegally misclassify scholarship athletes as “student-athletes.” submitted a letter. than “employee”.
This complaint is based on an ad hoc memorandum in which the NLRB General Counsel adopted the same position on September 29, 2021. The NLRB is currently putting its analysis into practice in administrative hearings that began Nov. 7.
The legal theory underlying the NLRB’s lawsuit is very simple, even though a successful outcome could have a devastating impact on the world of college sports. According to the NLRB, college athletes receive money in the form of scholarships in exchange for their “service” of playing college sports. Universities, academic societies, and the NCAA control the lives of athletes in the form of strict rules regulating eligibility, practices, game schedules, and other aspects of their competitive and personal lives.
Under that equation, these athletes are “employees” entitled to the benefits of federal and state labor laws. These include the right to form trade unions and strike, access to unemployment benefits and workers’ compensation benefits, liability under laws prohibiting discrimination in the workplace, disability benefits, improved health care, and legally mandated benefits. Includes other benefits obtained through collective bargaining.
Efforts to unionize on campus expanded to the sports world in September, when Dartmouth’s men’s basketball team filed a unionization petition with the NLRB. It is the first college team to unionize since Northwestern University’s men’s football team’s failed effort in 2014.
In Northwestern, the NLRB regional director in Chicago ruled that football players are employees entitled to the benefits and protections of federal labor laws. When he appealed to his NLRB board in Washington, the board vacated the decision and refused to consider the employee issue, citing narrow jurisdiction.
The NLRB does not have jurisdiction over public universities. Although Northwestern University is a private university, 108 of the 125 teams in the NCAA’s Division I Football Bowl Subdivision are public schools. The board rejected jurisdiction in the Northwestern case on the grounds that adjudicating a single case involving a single team would not “promote the stability of league-wide labor relations.” Frankly, the board made a joke out of this issue, and I mean, a joke that was totally intended.
This is where the NLRB’s argument regarding concerted action by USC, the Pac-12 Conference, and the NCAA comes into play. The NLRB charges that they are “joint employers” in that they all have rules, regulations, and policies that exercise significant control. About the life of an athlete. Co-employers may be jointly liable for unfair labor practices and other violations of her NLRA.
This “co-employer” theory in college sports is not new. The NLRB General Counsel specifically warned of its applicability in a memorandum dated September 29, 2021. In the USC case, the NLRB utilized the joint employer doctrine to establish the basis for him to exercise jurisdiction over the public universities that constitute the majority of schools within the FBS, as discussed above.
Although USC is a private institution, if the Pac-12 and NCAA determine that it is a “joint employer” with USC and is subject to the rules and regulations of the NLRA and NLRB, that ruling also applies to public school athletes. May be applicable. .
A similar issue is currently being argued before the U.S. Court of Appeals for the Third Circuit in Philadelphia. In this case, former Division I players have filed lawsuits against multiple universities under the federal Fair Labor Standards Act and state labor laws, claiming that they were “employees” who were entitled to minimum wage and overtime pay during their playing days. filed a lawsuit against the other party. The trial court agreed with the players, and the case is currently on appeal to the Third Circuit. It is expected that the long-awaited verdict will be handed down some day.
But while the “employee” classification may be beneficial to athletes, it also has other consequences. If the athlete is an employee, there is no limit to how much the university can pay them. The result would be an arms race in which the wealthiest schools with the biggest budgets could offer the best compensation packages.
And what about scholarship athletes in so-called non-revenue sports outside of football and basketball? Will they get paid as well? Do members of the men’s tennis or women’s volleyball teams get paid, and how does that differ from the compensation of a star quarterback?
This brings us to the issue of Title IX, the federal law that requires men and women to have equal opportunities to participate in sports. One of Title IX’s financial requirements is that the total amount of scholarship money for all college athletic programs must be divided proportionately between men and women in the same proportion as their participation rates. What happens to this calculation when salaries, bonuses, and benefits are factored into the financial package offered to athletes?
The NCAA, sports conferences and schools are asking Congress for protection. Several bills have been introduced that would specifically exclude college athletes as “employees.” On October 17, the Senate Judiciary Committee held a hearing on this issue. But given the current dysfunction in Washington, there appears to be little hope for a legislative solution in the short term.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
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Kenneth A. Jacobsen is Professor of Practice and Director of the Sports Law Program at Temple University Beasley School of Law.
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