By Tyler O’Hara
Introduction
In this case, Petitioner College Athletes Players Association (“CAPA”) requested the Board to find that grant-in-aid scholarship football players at Northwestern University are employees pursuant to Section 2(3) of the National Labor Relations Act (the “Act” or “NLRA”) and to direct an election in a unit of said players. After the Regional Director agreed with the Petitioner on these issues, the Board granted Northwestern’s Request for Review due to important concerns raised regarding the scope and application of section 2(3), in addition as to whether the Board should even assert jurisdiction under the given circumstances in the first place.
Upon review of the arguments by both parties, the Board found that it would not promote the policies of the Act to assert jurisdiction in the case, even assuming without deciding, that the grant-in-aid football players were employees within the meaning of Section 2(3). The Board stated that with the absence of “explicit congressional direction” regarding whether or not to assert jurisdiction, it concluded that asserting jurisdiction would not serve to effectuate stability in labor relations. However, the Board notes that the decision is limited to the grant-in-aid scholarship football players covered by the petition.
Background
On March 26, 2014, the Regional Director for Region 13 of the National Labor Relations Board (“NLRB”) issued a ruling that granted student-athletes playing football on scholarship at Northwestern University (the “University”) the right to collectively bargain under the NLRA. The result of a petition submitted by CAPA, the Director’s decision was based predominantly on his conclusion that the players met the definition of “employees” under Section 2(3) of the Act. The main issue presented by parties before the Regional Director (the “Director”) was whether grant-in-aid scholarship football players at Northwestern University were “employees” within the meaning of the Act, and would therefore be entitled to choose whether or not to be represented for the purposes of collective-bargaining. The Director ultimately found that players receiving scholarships from the University are “employees” under Section 2(3) of the Act,” and ordered an election to be conducted under its direction in the following appropriate bargaining unit:
Eligible to vote are all football players receiving football grant-in-aid scholarship and not having exhausted their playing eligibility employed by the Employer located at 1501 Central Street, Evanston, Illinois, but excluding office clerical employees and guards, professional employees and supervisors as defined in the Act.
College Athletes Players Association
CAPA is a purported labor organization that seeks to “represent and advocate for college athletes in collective bargaining with respect to health and safety, financial support, and other terms and conditions of employment.” In January 2014, CAPA filed a petition under Section 9(c) of the Act seeking to represent and collectively bargain for grant-in-aid scholarship football players at the University. Specifically, CAPA sought to bargain with Northwestern over the terms and conditions of the football players’ “employment” at the University. The proposed bargaining unit would consist of approximately eighty-five football players who receive athletic scholarships from the University. Notably, one of CAPA’s co-founders is Kain Colter, who played varsity football at Northwestern on scholarship for four seasons.
CAPA’s Argument —In its’ argument, CAPA asserted that the University’s scholarship football players are “employees” under the Act. In support of this position, CAPA relied on language in Boston Medical Center Corp., which affirmed the Board’s proposition in NLRB v. Town & Country Electric., that “the term ‘employee’ as used in the Act reflect[s] the common law agency doctrine of the conventional master-servant relationship.” Under common law, a master-servant relationship “exists when a servant performs services for another, under the other’s control or right of control, and in return for payment.” Therefore, by applying the common law test to the current case, CAPA argued that scholarship football players at the University perform services for the University, under the University’s control or right of control, and in return for payment in the form of an athletic scholarship. Consequently, CAPA contended that applying the common law test was proper and that its application should result in the Board finding that the players are “employees” under the Act.
Northwestern University
Northwestern University is a private university located in Evanston, Illinois. The University is a member of the NCAA, a private, non-profit, voluntary association comprised of collegiate institutions across the United States. The University’s football program is part of the Big Ten Conference and competes in college football’s top division—the Football Bowl Subdivision (“FBS”). In response to CAPA’s petition, the University has stated that it has always been “first and foremost,” a premier academic institution and that its’ students who participate in NCAA varsity sports at Northwestern are “carrying out the educational mission of the school.” In the University’s “institutional purpose and athletics philosophy,” Northwestern President Morton Shapiro articulates the positive effects that its’ athletic program has on the academic and personal development of student-athletes.
The University’s Argument — Contending CAPA’s claim, the University argued that the scholarship student-athletes on its football team are not “employees” of the University under the Act. While CAPA sought to immediately apply the common-law test for “employee” that the Board articulated in Town & Country, the University first sought to emphasize the vast differences between an academic and an industrial setting. The University’s argument relies on the Board’s language in Brown, which states how the Act is “fundamentally designed” to address the economic relationship between employers and employees. As a result, the University contends that instead of applying the common-law test to determine “employee” status, the appropriate test for the Board to apply is whether the football student-athletes on scholarship have a primarily educational or economic relationship with the University.
In Brown, the Board determined that graduate student assistants did not have a fundamentally economic relationship with the university and therefore were primarily students and not “employees” under the Act. Similarly, in Leeland Stanford, the Board concluded that research assistants were not employees within the meaning of the Act after determining that the payments they received were stipends or grants and were not based on “the skill or function of the particular individual, the hours spent on research, or the nature of the research performed.” Based on this precedent, the University argues that by applying the test from Brown to the current issue, the student-athletes in Northwestern’s football program who receive athletic scholarships have a predominantly academic, rather than economic, relationship with the University.
Decision of the Regional Director
After hearing arguments from both sides, the Director found that football players receiving scholarships from the University were “employees” under Section 2(3) of the Act. In the “Discussion and Analysis” section of his decision, the Director first established the burden of proof and the applicable legal standard before laying out his reasoning behind the determination. Finding that the University bore the burden of proof and that the proper definition of employee under the Act is the common law definition, the Director primarily based his determination on four claims; (1) grant-in-aid scholarship football players perform services for the benefit of the University for which they receive compensation; (2) grant-in-aid scholarship football players are subject to the University’s control in the performance of their duties as football players; (3) the University’s grant-in-aid scholarship players are employees under the common law definition; and (4) Brown University is not the applicable legal standard.
Following the Director’s decision, the University submitted a Request for Review of the Decision and Direction of Election. In its’ request, the University elucidated how this “unprecedented decision” would alter the very foundation of collegiate varsity athletics. On April 24, 2014, the Board granted the University’s Request for Review stating that the request raised “substantial issues warranting review.”
Decision on Review
In its’ review, the Board quickly acknowledged the unique circumstances of the case, emphasizing that they have never before been asked to assert jurisdiction over college athletes. Decision on Review and Order, Northwestern University and College Athletes Players Association (CAPA), Case 13-RC-121359 (NLRB August, 2015). They additionally state that there has there never been a petition for representation in a unit of a single, or a group, of college teams and that scholarship players do not fit into “any analytical framework that the Board has used in cases involving other students or athletes.” Id. at 4. The Board concludes that the fact that scholarship players are students who are also athletes participating in what has traditionally been regarded as an extracurricular activity, is a material distinction from the Board’s student precedent. Id. Likewise, the Board distinguishes scholarship players from those in professional leagues, elucidating that scholarship players are required to be enrolled as full-time students, meet certain academic requirements, and maintain their amateur status. Based on these determinations, the Board subsequently concluded there was no controlling precedent and that it was appropriate to consider whether or not to decline asserting jurisdiction. Id.
Notwithstanding the distinctions previously stated, the Board acknowledged similarities between FBS football and professional sports. Id at 5. Like that of the National Football League (“NFL”) NCAA member institutions have FBS teams that are in the “business” of staging college football contests from which they receive revenues (via ticket sales, concessions, merchandise sales, and television contracts). See, e.g., American Basketball Assn. Players’ Assn., 215 NLRB 280, 280 (1974); American League of Professional Baseball Clubs, 180 NLRB 190, 190 (1969). Additionally, both FBS and professional football contests require the joint cooperation by the teams comprising each league or association involved. See NCAA v. Board of Regents of University of Oklahoma, 468 U.S. 85, 101 (1984) (“Some activities can only be carried out jointly. Perhaps the leading example is league sports”). It is the need for this joint cooperation, the Board states, which required academic institutions that sponsor intercollegiate athletics formed the NCAA in the first place. Decision on Review and Order, Northwestern University and CAPA (NLRB 2015) at 5.
However, while this cooperation has ultimately given “the NCAA a substantial degree of control over the operations of individual member teams,” the Board again emphasizes the necessity of this arrangement to achieve uniform rules of competition and compliance. Id. at 5. As a result of this symbiotic relationship, “labor issues directly involving only an individual team and its players would also affect the NCAA, the Big Ten, and the other member institutions.” Id. This issue becomes particularly problematic in the given case as only 17 of the roughly 125 colleges and universities that participate in FBS football are not state-run institutions. Id. Therefore, the Board cannot even assert jurisdiction over the vast majority of FBS teams because they are not operated by “employers” pursuant to Section 2(2) of the Act. See, e.g., Big East Conference, 282 NLRB at 340. The Board summarizes this point clearly:
Because most FBS teams are created by state institutions, they may be subject to state labor laws governing public employees. Some states, of course, permit collective bargaining by public employees, but others limit or prohibit such bargaining. At least two states [Michigan and Ohio]—which, between them, operate three universities that are members of the Big Ten [Michigan State, Michigan and Ohio State]—specify by statute that scholarship athletes at state schools are not employees. Under these circumstances, there is an inherent asymmetry of the labor relations regulatory regimes applicable to individual teams. In other contexts, the Board’s assertion of jurisdiction helps promote uniformity and stability, but in this case, asserting jurisdiction would not have that effect because the Board cannot regulate most FBS teams. Accordingly, asserting jurisdiction would not promote stability in labor relations.
Decision on Review and Order, Northwestern University and CAPA (NLRB 2015) at 6.
Conclusion
After consideration, the Board found that even if scholarship players were statutory employees (an issue they do not decide here), it would not “effectuate the policies of the Act to assert jurisdiction.” Id. at 4. Importantly, the Board also concluded that a finding that scholarship players are statutory employees would not have an effect on the ruling. Id. at 6 (emphasis added). However, the Board explicitly clarifies that this decision does not preclude a reconsideration of these issues should a material change in circumstances arise. Decision on Review and Order, Northwestern University and CAPA (NLRB 2015) citing Walter A. Kelley, 139 NLRB 744, 747 (1962) (citing Leedom v. Fitch Sanitarium, Inc., 294 F.2d 251, 255 (D.C. Cir. 1961)).
O’Hara is a 2016 J.D. Candidate at the University of North Carolina School of Law, who has written frequently about this topic.
