February 15, 2024
By: Scott Cole
On Monday, February 5, 2024, National Labor Relations Board (NLRB) Region 1 Director Laura Sacks ruled that the Dartmouth College men’s basketball players are employees of Dartmouth and have the right to unionize. Director Sacks held that:
Because Dartmouth has the right to control the work performed by the Dartmouth men’s basketball team, and the players perform that work in exchange for compensation, I find that the petitioned-for basketball players are employees within the meaning of the (National Labor Relations) Act.
The decision, which could be overturned by the full NLRB or later on appeal in the federal appellate courts, is yet another step toward the demise of amateurism in college sports as we know them today.
In 2014, Northwestern football players received a similar ruling at the regional level of the NLRB, but the entire NLRB overturned that decision because it felt the decision would create instability in the labor market and would be impractical to implement, considering private colleges compete in athletic conferences with state schools, which are not subject to the same labor rules. However, the NLRB is under different leadership, and its current general counsel, Jennifer Abruzzo, issued a General Counsel Memorandum in 2021 concluding that scholarship football players at Division I Football Bowl Subdivision (FBS) private colleges and universities and other similarly situated players are employees under the National Labor Relations Act (NLRA).
The NLRB recently held a hearing on an unfair labor practice case filed against the National Collegiate Athletics Association (NCAA), the University of Southern California, and the Pac-12 Conference, alleging the three entities have misclassified the university’s basketball and football players as students rather than employees. The NCAA is also currently appealing a federal trial court decision denying its motion to dismiss a lawsuit, claiming student-athletes are employees. The case, Johnson v. NCAA, is presently on appeal in the U.S. Court of Appeals for the Third Circuit, which held oral arguments on Wednesday, February 15, 2023.
Considering these activities, along with the U.S. Supreme Court’s unanimous decision in NCAA v. Alston, holding that the NCAA is not entitled to special status under the antitrust laws, the continued ability of the NCAA to enforce Amateurism rules on its member institutions is at risk. As summarized by U.S. Supreme Court Justice Brett Kavanaugh’s concurrence in the Alston decision:
Nowhere else in America can businesses get away with agreeing not to pay their workers a fair market rate, on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different.
An interesting aspect of the NLRB decision is that it involved Dartmouth, a member of the Ivy League Conference, where big-dollar coaches and large Name, Image and Likeness (NIL) payments are almost non-existent. Unlike wealthy athletic programs where student-athletes receive six or seven-figure NIL payments, Dartmouth prohibits athletic scholarships, and financial aid is awarded solely on financial need. Despite this, the NLRB regional director found that the approximately $2,950 worth of shoes and clothing received by each student-athlete was employee “compensation” and the fact that the college determines when the players will practice and play, review film, engage with alumni, or take part in other team-related activities evidenced sufficient control over student-athletes to support their status as employees.
While this decision is far from becoming law, the consequences of student-athletes being deemed employees are significant. Under the NLRA, employees have the right to form or join unions, engage in protected, concerted activities to address or improve working conditions, or refrain from engaging in these activities. Each of these rights could increase the cost to the institution of operating its athletics program.
So, what should you do now?
Since this decision is a long way from becoming law, there is time to watch as this story unfolds. If amateurism is to survive, it will likely take action from Congress to exempt the NCAA from antitrust laws to continue to impose restrictions on player income. We may also see large and wealthy Division I conferences form their own governance body, leaving the NCAA to govern smaller Division I, Division II, and Division III programs. Ultimately, colleges will need to determine where their athletic programs fit within the academic enterprise, including the desires of alumni and supporters and whether they could continue financially supporting programs where student-athletes are employees; however, imminent action should only be considered once the landscape is clearer.
Questions?
Contact GrayRobinson Higher Education Team Leader Scott Cole.