Written By: Jackson Dankert
Introduction
On November 7, 2023, the National Labor Relations Board held the first day of a hearing brought on behalf of members of the University of Southern California (“USC”) football, men’s basketball, and women’s basketball teams. The complaint, issued by Region 31 of the National Labor Relations Board (“NLRB”) claims that USC, the NCAA, and the Pac-12 by not recognizing college athletes as “employees” violated their Section 7 right of the National Labor Relations Act (“NLRA”), which allows employees to create unions for the purpose of collective bargaining. To win, college athletes must be found to be “employees” of USC, the NCAA, or the Pac-12. Two important cases help to illustrate the shifting power dynamic between the NCAA and athletes.
NCAA v. Board of Regents and NCAA v. Alston
In Board of Regents, at a time when the NCAA was the sole broadcaster of college football, The Supreme Court held that an NCAA policy limiting each school to being shown on television more than four times a year was an unreasonable restraint of trade, in violation of the Sherman Act. Comments made in the opinion noted that “the NCAA plays a critical role in the maintenance of a revered tradition of amateurism in college sports.” and the NCAA restrictions on athlete compensation as being “entirely consistent with the Sherman Act.” 468 U.S. at 120. These comments, spanning decades, effectively gave the NCAA a catch-all justification for not paying collegiate athletes.
In 2021, in NCAA v. Alston, the Supreme Court unanimously held that NCAA rules limiting education-related compensation a school may offer an athlete violates the Sherman Act. Further, the Court noted the NCAA, like any other company, is fully subject to antitrust laws. Noting the increased commercialized nature of college football compared to 1984 when Board of Regents was decided, the Court characterized the previous comments about preserving amateurism as “stray comments” of little importance to the current case. In a concurring opinion, Justice Kavanaugh stated “The NCAA’s business model would be flatly illegal in almost any other industry in America.”
Following the Alston decision, NCAA took a hands-off approach and permitted athletes to accept compensation, so long as the athlete complies with their respective University and State Policies regarding NIL compensation. Being fully subject to antitrust laws, much of the NCAAs business model would fail as an unreasonable restraint on trade, indicating they were much more willing to reason with wants and needs from collegiate athletes. Athletes, feeling a stronger legal voice, continued to challenge for increased rights such as employment status.
College Athlete Unionization Efforts
In 2017, members of the Northwestern University’s men’s football team sought union classification. Citing that Northwestern is the only private institution in the Big Ten, the NLRB found it would not promote labor stability to assert jurisdiction in this case, thus declining to resolve whether certain collegiate athletes were employees under the NLRA. However, they made clear that nothing precludes them from reconsidering the issue down the line. In 2021, relying on the success of the Alston case, Jennifer Abruzzo, General Counsel of the NLRB, issued a memorandum explaining how the law fully supports a finding that the scholarship football players at the highest levels of college football fit the statutory and common law definitions of an employee. Section 2(3) of the NLRA broadly defines an employee as “any employee,” subject to a few exceptions. University employees and football players were not among the exceptions.
In the current challenge, the NLRB’s Region 31 asserts that the NCAA, Pac-12, and USC are “joint-employers” of athletes under the NLRA. The NLRA applies to private employers. This may have wide implications, particularly because certain states have laws excluding public employees from unionization. If found to be joint-employers, athletes would have the right to collectively bargain with the NCAA, a private organization, even if state laws exempted them from unionizing for purposes of collectively bargaining with their schools. The NCAA continues to lobby Congress for a legislative exemption stating that collegiate athletes are not employees. The Pac-12 argues that they are a political subdivision rather than a private organization, making them not subject to the NLRA due to the fact that a majority of their members are public schools. USC argues that the rules they put forth for athletes to adhere to “do not rise to the level of work rules and their maintenance does not constitute an unfair labor practice.”
Risk / Reward of Employment Status
Being recognized as employees would bring about many changes to the Athlete-University relationship. Athletes would be able to collectively bargain for many terms of labor, including compensation, overtime, and worker’s compensation. Further, athletes could negotiate for a split of the broadcasting revenue, allowing athletes greater compensation for playing collegiate athletics. Compensation is important to many of these athletes, as less than 2% of college football and basketball players make the NFL and NBA. To many, college athletics offers the best chance to receive substantial compensation to protect them later in life.
Employment status does not come without any risks or further questions. Would schools be allowed to terminate an athlete’s employment? Will the athlete’s employment be on a 1-year renewable basis or is it a 4-year contract? Would collective bargaining hurt top end athletes who may be restricted in benefits due to what the union has bargained for? Despite not being expected to be decided until next year, the entirety of collegiate athletics, from the NCAA, to Schools, to Athletes, to fans, will tune in as this ruling may have drastic effects to the future landscape of collegiate athletics.
Sources:
NCAA v. Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984)
NCAA v. Alston, 141 S. Ct. 2141 (2021)
Northwestern University and College Athletes Players Association (CAPA). Case 13-RC-121359
Statutory Rights of Players at Academic Institutions (Student-Athletes) Under the National Labor Relations Act, Jennifer Abruzzo, retrieved from NLRB General Counsel Jennifer Abruzzo Issues Memo on Employee Status of Players at Academic Institutions | National Labor Relations Board