Tag: college sports

Dartmouth Basketball Players Vote to Be First College Athletes Represented by a Union

On March 5, 2024, players on the Dartmouth College men’s basketball team voted to unionize, making the group the first college sports team to do so in the United States. Dartmouth College has already filed an appeal with the National Labor Relations Board (NLRB), setting up a legal challenge that will have significant implications for the status of college athletes and the future of college sports in the United States.

Quick Hits

  • The Dartmouth men’s basketball team voted to unionize in what would be the first union to represent college athletes.
  • Dartmouth has filed an appeal with the NLRB that could determine whether college athletes are employees within the meaning of the NLRA.
  • The union vote could have significant implications for the future of college sports in the United States.

In a representation election overseen by the NLRB, the Dartmouth men’s basketball players reportedly voted 13-2 to be represented by the Service Employees International Union Local 560. The Trustees of Dartmouth College immediately filed a request for a review of the regional director’s decision and direction of election that had allowed the unprecedented election to proceed despite serious implications for college sports.

The election comes after an NLRB regional director in Boston, Massachusetts, ruled on February 5, 2024, that the men’s basketball players at Dartmouth—who compete in the National Collegiate Athletic Association (NCAA) Division I, the highest level of college athletics—are “employees” within the meaning of the National Labor Relations Act (NLRA) and have the right to a union election.

Dartmouth argued in its request for review that the players cannot be considered employees under the NLRA because they are amateur students who are provided with financial aid and academic resources, not compensation, and do not provide any service to the school.

Dartmouth, which is a private institution in New Hampshire and part of the all-private Ivy League collegiate athletic conference, called the regional director’s decision an “unprecedented, unwarranted, and unsupported departure” from applicable legal standards that creates a “new definition of ‘employee’” and “promises to have significant negative labor and public policy implications.”

College Athletes’ Employment Status

NLRB Region 1 Director Laura Sacks found that the Dartmouth men’s basketball players were employees in large part because the school “exercises significant control” over their participation on the team, including determining when players practice and play, review film, engage with alumni, and take part in other team-related activities. During travel, the school controls when and where the players travel, eat, and sleep, the regional director found.

Further, the regional director found that despite questions about the revenue generated, the players generate publicity for the school, and do so to receive various economic benefits, including equipment and apparel, tickets to games, lodging, meals, and other specialized academic and career development support.

The Dartmouth appeal tees up for the NLRB the issue of whether college athletes at private schools are employees after the NLRB punted on a similar issue in a 2015 case involving college football players at Northwestern University that left open the issue of whether college athletes at private universities may be considered employees under the NLRA.

In the Northwestern case, the full Board later declined to assert jurisdiction over the case, finding it “would not serve to promote stability in labor relations,” largely because the majority of schools that compete in college football at the highest level are public institutions not subject to the NLRA.

The regional director in Dartmouth reached her conclusion despite the significant differences in the economics of college basketball and football that distinguished the Dartmouth case from the Northwestern case, where the players received athletic scholarships in a sport—football—that generated more revenue. Further, unlike the highest level of college football, which is comprised mostly of public universities, Dartmouth is a member of a collegiate athletic conference made up entirely of private universities that do not provide athletic scholarships.

Looking Ahead

If the Board agrees that the Dartmouth basketball players are employees and allows the union election to stand, it could have a ripple effect, with college athletes at private universities across the country seeking to organize.

Yet the Dartmouth basketball players’ unionization vote is only the latest in a string of legal developments related to whether college athletes may be considered employees or parties entitled to receive compensation under various legal standards, including under the NLRA and Fair Labor Standards Act (FLSA). On February 23, 2023, the U.S. District Court for the Eastern District of Tennessee issued a preliminary injunction blocking the NCAA from enforcing new rules on athletes’ compensation derived from name, image, and likeness (NIL) rights—specifically, rules restricting the ability of so-called school “boosters” to negotiate with NCAA athletes during the recruiting and transfer processes.

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For more news on College Athletes Unionizing, visit the NLR Labor & Employment section.

NLRB Issues Complaint for Athlete Misclassification against NCAA, Pac-12, and USC

On May 18, 2023, the National Labor Relations Board’s (the Board) regional director in Region 31 issued a complaint against the National Collegiate Athletic Association (NCAA), the Pac-12 Conference, and the University of Southern California (USC), alleging they violated the National Labor Relations Act (the Act) by misclassifying college football and basketball players as “non-employee student-athletes.” The original charge was issued back in February 2022 and alleged all three entities were in violation of the Act as “joint employers” of these athletes.

While this issue is not necessarily new to higher education, the Board’s decision to issue a complaint—and issue that complaint against all three entities—is new ground, as it departs from a 2015 precedent and paves the way for student-athletes to unionize at potentially both private and now public institutions. Under the Act, the Board has authority over private-sector workers, while state labor boards have jurisdiction over employees at state institutions. However, because the students at issue in Thursday’s complaint would be considered employees of the private NCAA and Pac-12 as well as USC, all three entities would be subject to potential liability as “joint employers.” What this means for public institutions is that there is a real and likely potential that the “joint employer” doctrine will allow for an end run around the Act’s coverage exemption for public-sector entities. As such, all student-athletes could potentially seek to collectively bargain at the NCAA level.

Finding merit to the charge and issuing this complaint is a logical result of General Counsel (GC) Memorandum GC 21-08 issued by the Board’s GC Jennifer Abruzzo in late September 2021. At that time, we issued an alert detailing the GC’s desire to expand the definition of “employee” in order to bring scholarship collegiate athletes under the Act. In February 2022, we issued another alert detailing how USC was likely to be the test case for that endeavor.

Alleging the violation of Section 7 of the Act, Thursday’s complaint arises from charges filed by the National College Players Association, a nonprofit advocacy association founded by former UCLA football player Ramogi Huma. The charge and complaint asserted that USC, the Pac-12, and NCAA misclassified student-athletes in order to deny them their rights under the Act, including the right to speak about compensation and working conditions. In addition to the alleged misclassification issue, the complaint alleges that USC illegally obstructed athletes’ organizing by “maintaining unlawful rules and policies in its handbook, including restricting communications with third parties, in the media, etc.”

Colleges and universities may be tempted to minimize this issue by thinking that the shift to seeing student-athletes as employees would affect them only in the event their athletes attempt to form a union. That is not the case. While a Board determination that student-athletes are employees could lead to a renewed effort by college athletes to organize, the GC has already cautioned (and made good on that warning) that the Board will seek to issue unfair labor practice charges against colleges and universities that misclassify student-athletes as “non-employees” or engage in other violations of the Act. For example, the GC has previously made clear that protections afforded by the Act apply to concerted activity such as expressions of support for social justice issues and other advocacy. As such, higher education institutions would be wise to tread lightly into these waters when they arise, because where employee status exists, concerted efforts of those employees to speak their minds or speak out on certain issues will be viewed as protected under the Act.

The hearing on the Board’s complaint is set for November 7, 2023.

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Name, Image and Likeness: What Higher Education Institutions Need to Know for Legal Compliance

More than a year has passed since the NCAA v. Alston ruling and roll-out of the NCAA Name, Image and Likeness Interim Policy. What processes should institutions have in place, and what situations should they be on the lookout for at this point in the NIL game? While institutions cannot provide compensation to student-athletes or potential student-athletes in exchange for use of a student’s NIL, below are items counsel at higher institutions should have on their radar.

Review and Approval of NIL Agreements

The NCAA Interim Policy does not require student-athletes to disclose NIL agreements and/or opportunities to their institutions. In the State of Michigan, however, pursuant to House Bill 5217, beginning December 31, 2022, student-athletes must disclose proposed NIL opportunities or agreements to the institution at least seven days prior to committing to the opportunity or contract. For the institution, this means there needs to be a process in place by which student-athletes submit opportunities or agreements to the institution and the institution does a timely and thorough review of the submission. The institutional representative reviewing the submissions must be knowledgeable of the institution’s active contractual obligations and only sign off on the student-athlete’s potential NIL opportunity or contract once confident there is no conflict with an existing institutional contract. This is most likely to come up in agreements with exclusivity terms, such as sports apparel and campus-wide pouring rights agreements. If there is a conflict, the institution needs to articulate the specific conflict to the student-athlete so they can negotiate a revision, which is then subject to additional review and potential approval by the institution.

Institutions are the Regulating Bodies

Institutions in states that require submission of NIL opportunities by student-athletes need to pay close attention when reviewing submissions because the NCAA has placed most of the NIL regulatory burden on institutions. Specifically, institutions are obligated to report potential violations of NCAA policy. Among other potential violations, institutions must report possible abuses on the prohibition of pay-for-play and improper inducements of potential student-athletes and current student-athletes. Essentially, in addition to spotting potential conflicts between NIL agreements and current institution agreements, institutions need to review NIL agreements to determine if a student-athlete is being compensated for athletic achievement and/or for their enrollment or continued enrollment at a particular institution. Any indication that the student-athlete’s NIL agreement will be void if they no longer participate on an athletic team requires the institution to complete due diligence and determine the appropriateness of the arrangement in light of the NIL policy. Institutions are ultimately responsible for certifying the eligibility of student-athletes, and the presence of the previously mentioned terms place the agreement in direct violation of the language in the NIL Interim Policy and corresponding NCAA guidance.

Institutional Staff Members

It is in the best interest of institutions to train their staff members on appropriate interactions with boosters because the NCAA holds institutions responsible for the “impermissible recruiting activities engaged in by a representative of athletics interest (i.e., a booster).” Staff members need to understand the actions they are permitted to take and conversations they are permitted to have, as failure to do so could land them deep in the gray area of NIL.

  • An institutional staff member cannot directly or indirectly communicate with a potential student-athlete on behalf of a booster or NIL entity.
  • An institutional staff member cannot enter into agreements with an NIL entity to secure NIL deals between the entity and potential student-athletes.
  • An institutional staff member cannot “organize, facilitate or arrange” a meeting or any conversations between an NIL entity and a potential student-athlete, which includes transfer students coming from other institutions.

Financial Aid

Institutions should ensure they are not influencing how a student-athlete uses their compensation. Specifically, institutions should not direct student-athletes to use their NIL compensation for financial aid. Student-athletes’ financial aid is not impacted by compensation they would receive from NIL agreements. Financial aid limitations exclude compensation which also extends to NIL compensation. However, if a student receives NIL compensation, this may impact need-based financial aid.

FERPA

Many public institutions have made the argument that FERPA precludes them from disclosing NIL agreements without a release executed by the student-athlete. If a copy of an NIL agreement or summary of an NIL opportunity is provided to the institution by the student-athlete, this becomes a record of the university per the definition of FERPA and is likely part of the student-athlete’s educational record. There may be a particular circumstance in which a FERPA exception would apply to a request, but there is no broad FERPA exception that would apply in this situation. Institutions might find it strategic to include their stance on FERPA in an NIL policy to ensure all requests for NIL agreements are handled consistently.

International Students

International students can receive NIL compensation but with some caveats. In its documentation, the NCAA directs international student-athletes to their institution’s Designated School Official for “guidance related to maintaining their immigration status and tax implications.” As a result, institutions should make sure the individual(s) is/are well equipped to provide answers regarding NIL from international students.

Five Steps to Become a Well-Organized and Compliant Institution

  1. Have an NIL policy and procedures that are followed consistently and made available to student-athletes for reference and consultation;
  2. Have a process in place to review NIL agreements between the institution’s student-athletes and outside entities or individuals (if located in a state that requires student-athletes to make such disclosures);
  3. Have trained its staff (especially athletics staff) on what actions can and cannot be taken in relation to student-athletes’ NIL opportunities;
  4. Have trained its student-athletes on available resources; and
  5. Have a team of institutional staff members ready to pivot if additional laws are enacted by their state, if additional guidance is provided by the NCAA or if federal legislation is enacted.

Article By Richard T. Hewlett and Jessica E. Visser of Varnum LLP

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© 2022 Varnum LLP

Could Leagues and Teams be Joint Employers Before the NLRB?

The National Labor Relations Board (NLRB) has released a Notice of Proposed Rulemaking to change the standard for determining if two employers may be joint employers under the National Labor Relations Act (NLRA). The proposed rule, expected to become effective sometime in 2023, could make it more likely that professional and collegiate leagues would be found to be joint employers of any unionized professional players or collegiate student-athletes who play for teams that are members of those leagues.

As a joint employer of unionized players of member teams, a league could be jointly responsible for unfair labor practices committed by the teams or the team’s supervisors or managers (i.e., coaches and administrators), be required to participate in collective bargaining negotiations with the teams concerning the wages and other terms and conditions of employment of the players, and picketing directed at the league would be considered primary and therefore permissible (rather than secondary and subject to injunction).

Currently, the NLRB will find two or more employers to be joint employers if there is evidence that one employer has actually exercised direct and regular control over essential employment terms of another employer’s employees. An employer that merely reserves the right to exercise control or that has exercised control only indirectly will not be found to be a joint employer. The NLRB has proposed that the Browning Ferris standard be restored. Under the proposed rule, two or more employers will be found to be joint employers if they “share or codetermine those matters governing employees’ essential terms and conditions of employment.” Importantly – and the critical import of the proposed rule – the NLRB will consider both evidence that direct control has been exercised and that the right to control has been reserved (or exercised indirectly) over these essential terms and conditions of employment when reviewing two or more employers for status as joint employers.

Professional athletes are employees under Sec. 2(3) of the NLRA, of course. As for collegiate student-athletes, NLRB General Counsel Jennifer Abruzzo issued a memorandum, GC 21-08, announcing the intention to consider scholarship athletes at private colleges and universities to be employees because, as she wrote, they “perform services for their colleges and the NCAA, in return for compensation, and subject to their control.” Stating in summation “that this memo will notify the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, that [she] will be taking that legal position in future investigations and litigation” under the NLRA, Abruzzo signaled that conferences, leagues, and the NCAA will face joint-employer analysis in an appropriate case.

The “essential terms and conditions of employment” will translate to the sports workplace in the nature of game, practice and meeting times, travel and accommodation standards, equipment and safety standards, conduct rules and disciplinary proceedings, the length of a season, the number of games and playoff terms, and numerous other areas. Professional leagues may already coordinate with their member teams on a number of employment terms for players. For collegiate conferences and leagues, this may be new. Under the current standard, a league could better insulate itself from the decisions made by its members’ coaches and administrators by not exercising direct involvement in those matters. Under the proposed rule, a league or conference that merely has the power (even if reserved and unexercised) to make decisions affecting the “work” conditions for student-athletes could be jointly liable along with the institution for decisions made solely by the institution’s agents.

Consequently, conferences and leagues should consider training managers on their responsibility under the NLRA to private sector employees. They should also consider the role they want to play in collective bargaining should any of the student-athletes at their member institutions unionize.

Article By Patrick L. Egan of Jackson Lewis P.C.

For more labor and employment legal news, click here to visit the National Law Review.

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