By R. Joseph Stennis

Yesterday afternoon the Director of the NLRB’s regional office located in Chicago, Illinois ruled in a landmark decision that Northwestern University football players presently on scholarship at the school are an “employee” as that term is defined under the National Labor Relations Act (“NLRA”) and federal common law. As a result, the Director’s decision instructed these particular football players to participate in an election proceeding to determine whether or not they want to be represented for collective bargaining purposes by the College Athletes Players Association (“CAPA”). CAPA filed the election petition with the NLRB on behalf of Northwestern football players on January 28, 2014.

In this case, Northwestern University had the burden of establishing why the school’s football players should be prohibited from being classified as employees. Specifically, Northwestern was required to establish that its football players are not employees that “performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.” Brown University, 342 NLRB 483, 490 fn. 27 (2004)(citing NLRB v. Town & Country Electric, 516 U.S. 85, 94 (1995)). From the Director’s perspective, Northwestern fell short in meeting this burden. Rather, he concluded university football players on scholarship are employees of the school for the following reasons:

1.  Grant-in-aid scholarship football players perform services that benefit Northwestern for which they receive compensation. From 2003 – 2012, Northwestern generated revenues of approximately$235 million from its affiliation with the NCAA Division I and Big Ten Conference. Revenues were derived from ticket sales, television contracts, merchandise sales and licensing agreements. The Director saw this as evidence of an “economic benefit” that the scholarship football players provided for the university to use as it pleases, as well as the “immeasurable positive impact” Northwestern gains in reputation as being a winning football program. Equally compelling to the Director was the scholarships that the players receive for their athletic services, which amount to $76,000 per year for either four or five years depending upon whether a player redshirts or not. The Director further noted that the players’ scholarships are essentially employment contracts called a “tender” by the university that gives each player details regarding terms and conditions for which compensation will be provided to them.

2.  Grant-in-aid scholarship football players are subject to Northwestern’s control while performing their duties. As supporting evidence of control, the Director noted in his decision that players, among other things, spend at least 50 hours per week participating in football related activities during both training camp and the regular football season. During this timeframe, the location, duration and manner players perform these activities are controlled by university football coaches. Also, the Director noted that coaches keep control over players by observing their compliance with NCAA and team rules and disciplining them for any violations. Other examples of control cited by the Director in his decision was when coaches restrict and/or require players to get permission to: 1) seek employment; 2) drive personal vehicles; 3) travel off campus, and 4) use social media, to name a few.

3.  Scholarship players are employees who can vote but walk-ons are not. While the Director in his decision recognizes as employees football players who are on scholarship and have not exhausted their four or five years of eligibility, he does not give this same distinction to “walk-on” players. Since walk-ons are not on scholarship and have more flexibility from the university’s football coaches regarding missing practices and workouts during the season, they are not regarded by the Director as being employees. However, should a walk-on receive a scholarship at a later time, the Director concludes that such a player would satisfy the “employee” definition under the NLRA and common law.

A few things should be kept in perspective regarding the NLRB Chicago regional office’s decision. First, this decision is by a regional director, directing that an election will take place among a unit of grant-in-aid football players. It is not an NLRB decision per se. Prior to the election, Northwestern has the right to request that the Director’s decision be reviewed by the NLRB in Washington, D.C., which it may well do. However it is possible that the NLRB will not grant review immediately, and instead wait until later in the process and allow the scholarship players to participate in the election process. Should the union lose the election, then this decision will be the last word in this case. At any rate, the university must request a review in order to preserve the issues for later adjudication. The university has until April 9, 2014 to file its request for review. Also, the NLRB does not have jurisdiction over state universities because they are recognized under the law as state agencies. Thus, the NLRB lacks jurisdiction over state employers and political subdivisions of states. This decision does however potentially impact private colleges’ athletic programs in which scholarships and other financial aid are awarded.