The landscape of college athletics has seen a seismic shift over the course of the last few years. College coaches are signing multi-year, multi-million dollar contracts and then being paid the bulk of the money owed under the contracts to not coach for their respective university. Conference realignment is being driven by television revenue at the expense of tradition and geographic convenience for student-athletes. And NIL (name, image and likeness) money available for student-athletes has transformed big time college athletics into a (mostly) unfettered form of professional free agency. This money driven era of college athletics has led many to question whether student-athletes remain students or are instead sources of revenue generation for their universities––i.e., employees.
While the NCAA, politicians, and state and federal legislatures scramble to address the new economic realities of college athletics, the National Labor Relations Board (NLRB) has entered the fray to offer its guidance on this issue. In the Dartmouth College case, Region 1 of the NLRB recently found that members of the men’s basketball team––as university employees––had the right to vote on whether to be represented by a union for purposes of collective bargaining with the university. The NLRB rejected Dartmouth’s arguments that the NLRB lacked jurisdiction over the case because the members of the basketball team were student-athletes, not employees; and that the members of the basketball team did not meet the common law test for employment.
Specifically, the NLRB disregarded Dartmouth’s arguments that members of the basketball team do not provide work or services for the university in return for money; members of the basketball team do not receive athletic scholarships or other financial aid based on their status with the team; and the university does not earn a profit on the men’s basketball team. Put simply, Dartmouth provided undisputed evidence that there is no financial relationship between the university and members of the basketball team, and that Dartmouth is not receiving a direct financial benefit from the members of the basketball team, i.e., the members of the basketball team are not employees.
In rejecting these arguments, the NLRB instead focused on the fact that the men’s basketball team creates alumni engagement and positive publicity for the university; the coaches and other leaders of the university exercise “significant control” over the members of the basketball team, e.g., practice schedules, training sessions, game schedules; and the university provides the members of the basketball team with other monetary perks such as sneakers and clothing, tickets, travel and lodging expenses. The NLRB reviewed the totality of these benefits to Dartmouth and members of the basketball team and determined the members of the basketball team were performing work in exchange for monetary compensation, thereby making them employees versus student-athletes.
The NLRB’s position seems like a stretch and could have wide-sweeping unintended consequences. For example, if simply setting a student’s schedule and providing minimal financial perks transforms a college student into an employee, then members of a meat judging team, chess team, or mock trial team could also be considered an employee of the university for which they compete. While such an outcome may seem absurd, these student groups could certainly make the argument that they are entitled to union representation for purposes of collective bargaining with their respective universities based on the Dartmouth College case.
So, what does this mean? First, the NLRB’s decision will likely be appealed to the full board of the NLRB. Second, this is not the first time a Region of the NLRB has found student-athletes are employees. In 2015, Region 13 of the NLRB determined that members of the Northwestern football team were employees, but when the case was appealed to the full board of the NLRB, the decision was punted based on jurisdictional grounds––a similar outcome may happen here. Finally, the National Labor Relations Act which is administered by the NLRB does not apply to public universities, so this ruling does not impact a majority of the universities around the country, including Oklahoma State University and the University of Oklahoma. With that said, the Labor & Employment at Crowe & Dunlevy will continue to monitor this case and provide updates as it moves forward.
For more information on this, please reach out to Allen Hutson or any member of the Labor & Employment Practice Group.