Student Athletes as Employees?
The first American intercollegiate sporting event took place in 1852 when rowing teams from Yale and Harvard went head-to-head in Lake Winnipesaukee, New Hampshire. Since those humble beginnings, college sports teams in the U.S. have, in many instances, become the personas of the academic institutions they represent. As succinctly explained by James J. Duderstadt, the former president of the University of Michigan, “Nine of 10 people don’t understand what you are saying when you talk about research universities. But you say ‘Michigan’ and they understand those striped helmets running under the banner.”1
Since the inception of formal college athletics in the 19th century, student athletes have not been considered employees of the institutions for which they play. For example, the National Collegiate Athletics Association (NCAA), which was founded in 1905 for the purpose of regulating amateur college sports in the U.S., has long viewed college athletes as students, not employees.2 Accordingly, at least with respect to their student athletes, universities have not had to concern themselves with compliance under the National Labor Relations Act or the myriad of U.S. employment laws. But this may change, along with the entire landscape of collegiate athletics.
The Northwestern University Representation Petition
On January 28, 2014, the then-recently formed College Athletes Players Association filed a petition with the National Labor Relations Board (NLRB or the board) seeking recognition as the union representative for scholarship recipients playing on Northwestern University’s football team. The petition was opposed by the university because the National Labor Relations Act (NLRA or the act) only applies to employees.3 Thus, the issue in the case was whether football players receiving scholarships were considered employees for purposes of organizing under the act. Peter Sung Ohr, the regional director of the board’s Chicago region, answered that question in the affirmative on March 26, 2014, holding that Northwestern University scholarship football players are indeed employees. An explanation of the facts of the case and the regional director’s decision are summarized below.
The Northwestern University Football Program
In reaching his decision, the regional director devoted significant attention to the profitability of Northwestern’s football program. The football team produces revenue for the university through ticket sales, television broadcast contracts, and the sale of football merchandise.4 The football team generated total revenue of $235 million, along with expenses of $159 million, for the years 2003-2012. The football program generated $30.1 million in revenue and $21.7 million in expenses for the 2012-13 year.5
Northwestern University expends a great deal of effort recruiting its scholarship football players. Once a particular player has been identified as having the desired football skills and abilities, the university vets the recruit’s high school transcript, standardized test scores, and other information to determine whether the recruit can be pre-approved for admission to the school. If pre-approved, the recruit receives a formal tender offer from the school, which must be executed by the recruit to become effective. The tender sets forth the specific terms and conditions of the scholarship. For example, the tender explains that the scholarship may be canceled if the player renders himself ineligible to play football or if he withdraws from the football team for any reason. To be eligible to play on the team, the player must be enrolled as a full-time student; be making adequate progress toward obtaining a degree; and maintain a certain grade point average.
The Northwestern University football team consists of about 112 players. Of those, 85 players receive grant-in-aid scholarships that pay for the recipients’ tuition, fees, books, room, and board. The total value of the grant-in-aid scholarships per player is about $61,000 per year or approximately $76,000 per year if a player also takes optional summer classes. Players can also receive additional student assistance funds for things like health insurance and other expenses. In the past, the NCAA restricted schools to offering only one-year scholarships to athletes. However, effective the 2012-13 academic year, the NCAA loosened its rules to allow four-year scholarships to players. Northwestern University immediately began offering four-year scholarships with an option of a fifth year if the player “redshirts” his freshmen year.
The football season begins with a month-long training camp beginning in August. During the training camp, the players typically begin their day at 6:30 a.m. and end at approximately 10:30 p.m. Their days during training camp are spent in various types of rehabilitation and athletic training activities, practice on the field, meetings, and participation in team meals. The players spend upward of 50 to 60 hours per week on football activities during the training camp.
Once the training camp is complete, the football season begins. The regular season is comprised of 12 games against other colleges and universities, beginning in September and ending in November. Including travel time to and from the games, football players spend 40 to 50 hours per week on football activities, for which no academic credit is received. Their weekdays typically start at 6:30 a.m. with rehabilitation for injuries, followed by mandatory practice lasting until about noon. Players routinely have nonmandatory practices in the evening, along with similarly nonmandatory film-watching sessions thereafter. Players usually travel to the location of their weekly game on Fridays, along with mandatory meetings and meals. On game day Saturdays, the players are awakened at 7:30 a.m. and begin preparing for the game, which includes extensive warm-up drills and stretching exercises. Most games last about three hours. After the games and any media interviews of coaches and players, the team travels back to the home campus and the weekly process starts again.
Once the season is concluded, the players start winter workouts beginning in mid-January, which consist of running, agility drills, and weight lifting. The players are also required to attend training table sessions after their workouts. The players typically spend 12 to 15 hours per week on football activities until mid-February. From mid-February until mid-April, the players participate in spring football, which, all told, consumes about 20 to 25 hours per week. When spring football is complete, the players participate in spring workouts, which are essentially the same schedule as the winter workouts. The players receive approximately two weeks off to return home following the completion of the academic year in the beginning of June. After their break, the players are required to return to campus for summer workouts, which take up approximately 20 to 25 hours per week until training camp begins in August.
In addition to their training, practice, and game schedules, the players are also subject to various rules and regulations to which regular students at the university are not. For example, all players are subject to the team handbook. This means that freshmen and sophomores must live on campus, and that leases for off-campus living quarters must be approved by the coaching staff before the player can enter into the lease. The players must likewise receive approval from the coaching staff prior to obtaining any employment. The players are subject to a social media policy, which regulates what they can post on their Facebook, Twitter, and Instagram accounts. Players are also required to accept coaches’ friend requests so that the players’ postings can be monitored. Players are prohibited from profiting from their image or reputation, although they are required to sign a release permitting the university to utilize their name, image, and likeness. Further, the players are subject to strict drug and alcohol policies.
With respect to the players’ academics, Kain Colter, a former starting quarterback for the university, testified that scholarship athletes are not permitted to miss football practice during the regular season if they have a class conflict, although walk-on players are allowed to miss practice for academic reasons. Colter further testified that during spring, scholarship athletes were not allowed to take classes before 11 a.m., as they would conflict with practice. He also asserted that scholarship players could only take six-week classes in the summer because the eight-week classes would conflict with training camp. However, witnesses for the university testified that if a player had to take a class required for his or her major, then a member of the coaching staff would pull the player from practice in time for class, provide the player with a to-go meal, and give him or her a ride to class. The team’s head coach also testified that he never told players they could not leave early due to a class conflict. It was uncontroverted that the university provided things like tutoring programs, study tables, and class attendance policies.
Analyzing the Regional Director’s Holding
Relying on the Supreme Court’s decision in NLRB v. Town & Country Electric, 516 U.S. 85, 94 n. 27 (1995), the regional director applied the common law test to determine whether the scholarship athletes were employees under the act. The act, in pertinent part, states that “the term ‘employee’ shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise.”6 The regional director defined an employee as someone “who performs services for another under a contract of hire, subject to the other’s control or right to control, and in return for payment.”
Applying this analysis, the regional director first held that the scholarship athletes perform services for the university for which they receive compensation. The regional director emphasized the fact that the Northwestern football program generated approximately $235 million between 2003 and 2012, and that the university was free to spend the funds in any way it chose. Further, not included in the dollar amount was the good will and positive impact the football program had on alumni (leading to increased donations to the school) and on prospective students by encouraging them to enroll. Based on these economic incentives, it is, thus, the goal of the university to field the most competitive football team possible, which leads to the recruitment process of its scholarship athletes.
To attract and retain top recruits, the university offers scholarships valued at as much as $76,000 per year, or about a quarter of a million dollars over the player’s college career. Due to their demanding schedules and restrictions on employment, the regional director stated that the scholarship football players “are truly dependent on their scholarships to pay basic necessities, including food and shelter.” Further, the regional director highlighted that although only two players have had their scholarships canceled in the past five years, the head coach can reduce or cancel a player’s scholarship for a variety of reasons, providing incentive for the players to perform well on and off the field. Accordingly, the regional director held that the tender offer signed by each recruit is, in reality, an employment contract between the athlete and the university. Thus, when the university provides a scholarship to a football player on its team, the football player is performing services for the university for which the player receives compensation.
The regional director further held that the scholarship players are subject to the university’s control in the performance of their duties and in their private lives. This portion of the holding was based on the fact that the coaching staff provides the players with daily itineraries setting forth what football-related activities the players are going to engage, including meals. The decision notes that the coaching staff strictly controlled all aspects of travel relating to game days, including the players’ entire daily schedules, and even their travel attire. Moreover, the regional director emphasized that the coaching staff also controls “nearly every aspect” of the players’ private lives, including applying for outside employment, driving a personal vehicle, traveling off campus, posting items on the Internet, speaking to the media, and using alcohol or drugs, among other things.
Based on this analysis under the common law test, the regional director ultimately held that scholarship7 athletes are employees under the act. In reaching this conclusion, the regional director declined to follow the holding of Brown University v. UAW AFL-CIO, 342 N.L.R.B. 483 (2004), which held that graduate assistants at Brown University were not employees under the act. In Brown University, the board based its ruling on four factors, which ultimately weighed in favor of nonemployee status for the graduate assistants: 1) the status of the graduate students as students; 2) the role of graduate assistants’ duties in their graduate education; 3) the graduate assistants’ relationship with the faculty; and 4) the nature of the financial support received from the school.8
Principal in the regional director’s decision not to follow Brown University was his conclusion that the football players were not “primarily students” due to the fact that players spend between 40 and 60 hours per week on football activities, while the graduate assistants only spent “a limited number of hours” performing their graduate assistant duties. Further distinguishing Brown University was that the graduate students’ teaching and researching duties constituted a core part of their academic degree requirements, while the football players receive no academic credit for their football activities and receive no oversight from academic faculty in their football duties.
The board has agreed to review the regional director’s decision.9 T he board’s decision can ultimately be appealed to a U.S. court of appeals, and then possibly to the Supreme Court. Thus, it may be years before this litigation is concluded with finality.
Potential Implications in Florida
Although the Northwestern decision is not binding on public employers,10 let alone public employers in the state of Florida, its impact may nevertheless be felt by public colleges and universities throughout the nation. While the National Labor Relations Act does not apply to government workers, in 1974, the Florida Legislature enacted Florida’s Public Employee Relations Act (PERA), which governs the collective bargaining rights of public sector employers and their employees.11 PERA is enforced by the Public Employees Relations Commission (PERC).12
In 1976, the United Faculty of Florida labor union sought to represent graduate assistants at the University of Florida and the University of South Florida.13 P ERC concluded that graduate assistants are employees for purposes of organizing under PERA,14 which differs from the NLRB’s holding in Brown University. Florida’s First District Court of Appeal upheld PERC’s decision in 1979, finding that graduate assistants at public universities in Florida have the right to unionize.15 In response, two years later, the Florida Legislature amended F.S. §447.203 to exclude graduate assistants and undergraduates holding part-time positions from its definition of “public employee.”16 However, the First DCA, in United Faculty of Florida, Local 1847 v. Bd. of Regents, 417 So. 2d 1055 (Fla. 1st DCA 1982), found that the legislature’s 1981 exclusion of graduate assistants from the definition of “public employee” violated Florida’s Constitution.17
Importantly, in 1982, the First DCA modified its holding in United Faculty to clarify its earlier ruling.18 The court’s modification specifically notes that its earlier opinion did not address the constitutionality of the legislature’s exclusion of part-time undergraduate student workers in Florida’s state university system because that issue was not before the court.19 Accordingly, Florida law currently prohibits undergraduate students who perform part-time work in a state university from unionizing. The United Faculty decisions could be used as a jumping off point for student athletes in Florida seeking to unionize, and the Northwestern University holding could bolster their position.
Sackos v. NCAA
The apparent trend in student athletes seeking recognition as employees can also be seen in a current lawsuit against the NCAA. The suit, which was filed in October 2014, is currently pending in the U.S. District Court for the Southern District of Illinois. It was brought against the NCAA and all of its Division I schools by former University of Houston soccer player Samantha Sackos on behalf of herself and all others similarly situated.20
The Sackos lawsuit asserts that scholarship athletes are employees who are due minimum wage and overtime under the Fair Labor Standards Act (FLSA). The lawsuit’s factual allegations are similar to those alleged in the Northwestern complaint, but this lawsuit is not limited to scholarship athletes and equates student athletes with individuals in work-study programs. In particular, Sackos alleges that student athletes meet the criteria for recognition as temporary employees of Division I schools under the FLSA as much as, if not more than, work-study participants and are, therefore, required to be paid at least minimum wage. According to the complaint, students who participate in work-study programs perform nonacademic functions for no academic credit for the benefit of Division I schools and are treated as employees by the schools. Sackos likens work-study students to student athletes who also engage in nonacademic activities for no academic credit for the benefit of the schools they attend.
In addition, according to the lawsuit, student athletes are subject to “stricter, more exacting supervision by full-time staff…and confer as many, if not more, tangible and intangible benefits” to their schools. In support of its allegations, the lawsuit specifically cites to §10b24 of the DOL Field Operations Handbook, which provides in part that “students work at food service counters or sell programs or usher at athletic events, or who wait on tables or wash dishes in dormitories…are generally considered employees under the [a]ct.” Although not cited by Sackos in the lawsuit, this same provision of the Field Operations Handbook also states that “an employment relationship will generally exist with regard to students whose duties are not part of an overall educational program and who receive some compensation.” While the FLSA broadly defines the term “employ” as including to “suffer or permit to work,”21 it will be interesting to see whether the definition will be extended to some or all student athletes and what factors are ultimately determinative of the decision. Because the FLSA applies to both private and public sector employers, private and public colleges and universities alike may wish to follow the Sackos case.
Conclusion
The impact of these potentially sweeping changes to college athletics cannot be understated. For example, if college athletes must be recognized as employees of their respective schools, would they have the right to file a charge of discrimination with the Equal Employment Opportunity Commission for discrimination if they are dropped on the depth chart? Would universities be required to provide workers’ compensation insurance for athletes? If a player is injured, would the school have to provide leave under the Family and Medical Leave Act and return the player to his or her position once leave has concluded? Would the team have to provide players with qualifying health insurance benefits under the Affordable Care Act? While the tests for determining employment status under these various laws differ, the Northwestern case and potentially the Sackos case will undoubtedly impact these areas. These implications may raise the cost of collegiate athletics such that many smaller schools may not be able to continue some of their athletic programs.22
Ostensibly seeing the trend of college athletes seeking recognition as employees, Michigan recently enacted legislation that explicitly excludes athletes at public colleges and universities from the definition of “public employee.”23 We may see other states follow suit in an effort to blitz unionization efforts and protect the status quo in college athletics. Only time will tell. In the meantime, we shall all have to stand on the sidelines and watch how this game plays out.
1 L aura Pappano, How Big-Time Sports Ate College Life, The New York Times, January 20, 2012, available at http://www.nytimes.com/2012/01/22/education/edlife/how-big-time-sports-ate-college-life.html?pagewanted=all&_r=0.
2 See NCAA, Division I Manual, art. 15.2.7 (2014-15), available at http://www.ncaapublications.com/p-4380-2014-2015-ncaa-division-i-manual-october-version.aspx?CategoryID=0&SectionID=0&ManufacturerID=0&DistributorID=0&GenreID=0&VectorID=0&.
3 29 U.S.C. §§152(3), 158.
4 National Labor Relations Board, NLRB Director for Region 13 Issues Decision in Northwestern University Athletes Case, Case 13-RC-121359 (the factual background discussed herein is taken from the regional director’s decision), available at http://www.nlrb.gov/case/13-RC-121359?page=4.
5 College Football’s Most Valuable Teams 2013, Forbes, available at http://www.forbes.com/pictures/emdm45efmkf/college-footballs-most-valuable-teams-2013/. To put this into perspective, the football team generating the most money during this same time period was the Texas Longhorns, which generated $109 million, with profits of $82 million.
6 29 U.S.C. §152(3).
7 The regional director’s holding is limited only to scholarship athletes and excludes nonscholarship, walk-on players.
8 Brown University, 342 N.L.R.B. at 487-93.
9 Northwestern Univ., N.L.R.B. No. 13-RC-121359 (2014) (order granting Northwestern’s request for review of the decision).
10 29 U.S.C. §152(2). The National Labor Relations Act does not apply to government workers.
11 Fla. Stat. §447.201, et seq. (2001).
12 PERC is the state-level equivalent of the National Labor Relations Board. See Fla. Stat. §447.201(3) (2001) (“Creating a Public Employees Relations Commission to assist in resolving disputes between public employees and public employers.”).
13 United Faculty of Florida, Local 1847 v. Bd. of Regents, 417 So. 2d 1055 (Fla. 1st DCA 1982).
14 Id. at 1056.
15 Bd. of Regents v. Pub. Emps. Relations Comm’n, 368 So. 2d 641 (Fla. 1st DCA 1979).
16 United Faculty of Florida, 417 So. 2d at 1056.
17 Id. at 1058.
18 United Faculty of Florida, Local 1847 v. Bd. of Regents, 423 So. 2d 429 (Fla. 1st DCA 1982) ( United Faculty II ).
19 Id. at 430-31.
20 Sackos v. National Collegiate Athletic Association, Case No. 1:14-cv-01710-WTL-MJD (S.D. Ind. 2014).
21 29 U.S.C. §203(g).
22 See Ben Strauss & Zach Schonbrun, It’s a Game of Spiraling Costs, So a College Tosses Out Football, The New York Times, December 2, 2014, available at http://www.nytimes.com/2014/12/03/sports/ncaafootball/uab-cancels-football-program-citing-fiscal-realities.html (For example, the University of Alabama-Birmingham recently announced that it will be terminating its football program due to mounting financial burdens.).
23 Mich. Comp. Laws §423.201(e) (iii) (2013). H.B. 6074 was signed by Gov. Rick Snyder on December 30, 2014. Michigan law previously exempted graduate student research assistants from the definition of public employee, but the recent amendments provide further exceptions for student athletes.
Lori K. Mans is a partner in the Jacksonville office of Constangy, Brooks & Smith, LLP.
J. Evan Gibbs is an associate in the Jacksonville office of Constangy, Brooks & Smith, LLP.
This column is submitted on behalf of the Labor and Employment Law Section, Shane Thomas Munoz, chair, and Robert Eschenfelder, editor.
