March 28, 2014

NLRB Rocks Student-Athlete Cases With Ruling That College Athletes Are Employees Entitled To Unionize

By Gordon Schnell and David Scupp

On Wednesday, the National Labor Relations Board issued a stunning decision finding that Northwestern University scholarship football players are employees of the school and therefore entitled to unionize.

The NLRB’s holding could have a profound impact on the various antitrust suits that current and former players have brought against the NCAA, challenging its restrictions on collegiate athlete compensation.

The well-reasoned decision by a regional director of the NLRB was premised on a flat-out rejection of the notion that big-time college sports are amateur pursuits by “student-athletes” who are students first, and athletes a distant second.

The NLRB found the opposite to be the case – that in every way, the university and its scholarship athletes have an employer/employee relationship where academics and student status play little, if any role.  The NLRB pointed to the following for support:

  These sports programs bring in a massive amount of revenues to their universities, with Northwestern generating $235 million over the past 10 years through ticket sales, television contracts, merchandise sales and licensing agreements.

  In exchange for the athletic services they provide, players receive substantial compensation in the form of scholarships which can amount to as much as $76,000 per year in the form of tuition, fees, room, board and books.

  The coaching staff has “strict and exacting control” over “every aspect of the players’ private lives” throughout the entire year.

  The players devote 40 to 50 hours per week to their sports duties – with academics often taking a back seat – despite the NCAA’s rules that are supposed to limit to 20 hours a week the amount of time athletes play or practice.

The NLRB’s 24-page ruling severely undermines the NCAA’s claims that its collegiate athletes are all “amateurs.”  This spells trouble for the NCAA in defending its practices in numerous pending antitrust cases, where the NCAA has touted maintaining “amateurism” as the primary procompetitive justification for its rules restricting collegiate athletes’ compensation.

To be sure, the NLRB’s ruling does not end the controversy over the NCAA’s “amateurism” rules.  Northwestern University will undoubtedly appeal the decision.  The ruling only covers scholarship athletes.  And, it has no direct implications for state universities, which are governed by their own set of labor laws.

At the very least, however, the decision should provide substantial guidance to the courts hearing the antitrust claims against the NCAA.  Without a doubt, the ruling is a significant victory in the battle to eliminate the NCAA’s anticompetitive restrictions on collegiate athlete compensation.

Edited by Gary J. Malone

Categories: Antitrust Litigation

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