United States: NLRB Decision On Student-Athlete Unionization A Win For Colleges, But Title IX Still In Play

David J. Santeusanio is a Partner and Philip J. "Phil" Catanzano is a Senior Counsel in our Boston office.

HIGHLIGHTS:

  • The National Labor Relations Board (NLRB) decided unanimously to dismiss a petition by Northwestern University scholarship football players seeking to unionize.
  • The NLRB did not address the issue of whether Northwestern's scholarship football players were employees under the National Labor Relations Act (NLRA).
  • Although Northwestern and the union raised Title IX issues extensively in briefing, the Board did not address Title IX in its decision. Title IX is a critical compliance issue for colleges and universities managing a new wave of student-athlete reforms.

The National Labor Relations Board (NLRB) issued a unanimous decision on Aug. 17, 2015, dismissing a petition filed by Northwestern University scholarship football players seeking to unionize under the National Labor Relations Act (NLRA). The Board reviewed an NLRB regional director's March 2014 ruling that Northwestern's scholarship football players are employees under the NLRA, which led to a vote by the players in April 2014 on the issue of whether to unionize. In its decision, the Board explained that it declined to exercise jurisdiction in this case because it would not "promote stability of labor relations." Consequently, the Board did not decide the critical issue of whether Northwestern's scholarship football players are employees under the NLRA. (See the NLRB's Aug. 17, 2015 decision.)

The Board's decision – and the proceedings that led to the decision – highlighted significant issues for educational institutions addressing changes to their athletic programs and to collegiate athletics generally. If the union had prevailed, the door could have opened to a range of additional concerns for Division I athletic programs, not the least of which would have been potential compliance concerns under Title IX of the Education Amendments of 1972 (Title IX). While the union threat has dissipated, Title IX remains a critical compliance issue for educational institutions as they manage changes to their athletic programs during this era of reform efforts.

Student-Athlete Unionization Efforts and the Regional Director's Decision

In January 2014, scholarship football players at Northwestern filed a petition for an election with the NLRB in Chicago. The College Athletes Players Association (CAPA) – the union organizing the student-athletes – identified a number of issues and changes that it sought as part of its unionization efforts, including guaranteed coverage for sport-related medical expenses, ensuring due process on issues of punishment of players for rule violations and allowing players to receive compensation for commercial sponsorships.

Northwestern, in opposing the unionization efforts, raised the legal argument that student-athletes are not "employees" under the NLRA. The NLRB's regional director disagreed. In ruling that scholarship football players are employees, the regional director concluded that the players receive "compensation" in the form of scholarships in return for playing football. Further, the regional director concluded that Northwestern exerted requisite control over student-athletes with respect to their football-related lives (e.g., 40 to 50 hours per week on football activities during the regular season, with rules concerning meal times, meetings and dress codes) and their private lives (e.g., the need to obtain permission from coaches regarding living arrangements, speaking to the media, etc.). Following this decision, the Northwestern scholarship football players voted on April 25, 2014, and the votes remained sealed pending the NLRB's review of the regional director's decision.

Decision of the Board

On Aug. 17, 2015, the five-member Board issued its unanimous decision in which it declined to exercise jurisdiction in the case. The Board recognized the complexity of exercising jurisdiction over only one football team in the context of a 14-team league (the Big Ten) within one division (the Football Bowl Subdivision, or FBS) of the National Collegiate Athletic Association (NCAA). The NLRB stated that "because of the nature of sports leagues (namely the control exercised by the leagues over the individual teams) and the composition and structure of FBS football (in which the overwhelming majority of competitors are public colleges and universities over which the Board cannot assert jurisdiction), it would not promote stability in labor relations to assert jurisdiction in this case."

The NLRB recognized that teams, conferences and the NCAA have a "symbiotic relationship" that could be disrupted if a single team is unionized. The Board explained that the NCAA exerts significant control, and that such control is necessary to ensure uniformity and integrity of individual games and league competition. The Board concluded that "labor issues directly involving only an individual team and its players would also affect the NCAA, the Big Ten, and the other member institutions. Many terms applied to one team therefore would likely have ramifications for other teams. Consequently, it would be difficult to imagine any degree of stability in labor relations if we were to assert jurisdiction in this single-team case."

Further, the NLRB noted that Northwestern is the only private school in the Big Ten (only 17 of the 125 teams in the FBS are private), and that public universities are not subject to the NLRA. According to the Board, this situation is without precedent "because in all of our past cases involving professional sports, the Board was able to regulate all, or at least most, of the teams in the relevant league or association." Here, by contrast, there is "an inherent asymmetry of the labor relations regulatory regimes applicable to individual teams." As a result, asserting jurisdiction over a single team would not promote stability in labor relations.

The Board also recognized that an "additional consideration" is the fact that recent reforms have taken place in college athletics. The Board explained that "the terms and conditions of Northwestern's players have changed markedly in recent years and that there have been calls for the NCAA to undertake further reforms that may result in additional changes to the circumstances of scholarship players." The Board specifically referenced the NCAA's decision to allow FBS teams to award guaranteed four-year scholarships, as opposed to one-year, renewable scholarships. The Board recognized that "recent changes, as well as calls for additional reforms, suggest that the situation of scholarship players may well change in the near future."

The Board repeatedly noted that its decision is limited to the specific circumstances of the Northwestern football team. The Board noted that "we ... do not address what the Board's approach might be to a petition for all FBS scholarship football players (or at least those at private colleges and universities)," and it left open the possibility of other scholarship athletes organizing if circumstances change. But the Board also identified a range of issues unique to collegiate athletics that led the NLRB to decline jurisdiction in this case, and those issues are not likely to change soon. Absent significant changes that fundamentally alter college athletics and the status of uncompensated student-athletes, it is unlikely that circumstances will change so significantly that jurisdiction by the Board would be appropriate in the near term.

Title IX Issues and Future Reform

One of the most significant concerns with the Northwestern case from an institutional perspective was the inherent risk that a unionized team could seek to negotiate benefits not available to non-unionized teams. Setting aside the practical challenges that would result on campus from such a system, it also would have created potentially significant Title IX concerns. Title IX, of course, remains a critical compliance issue as institutions address reform efforts in collegiate athletics.

As colleges and universities are aware, Title IX prohibits discrimination on the basis of sex in collegiate athletics programs. Title IX's implementing regulations analytically break down an athletic program into components – often referred to colloquially as the "laundry list" – and then require gender equity in each of those components. There are 13 components on the Title IX laundry list, and the Northwestern case could have implicated many of them. For example, a unionized football team could force the institution to negotiate over better locker rooms, better practice facilities, better travel accommodations and meal plans, or additional medical training support. In addressing those demands, the institution would have to evaluate carefully whether its football program was receiving unequal benefits compared to other teams, most specifically the women's teams. In a practical sense, the institution would then potentially be forced either to provide additional benefits to its women's teams to balance the benefits it was providing to men's football or accept that its athletic program was likely out of compliance with Title IX and bear the consequences.

The potential consequences include an investigation by the federal government that ultimately could lead to the institution agreeing to implement changes to bring the program into compliance, or potential litigation by student-athletes, coaches or others alleging gender inequity. (See, e.g., Biediger v. Quinnipiac Univ., 728 F. Supp. 2d 62 [U.S. District Court for the District of Connecticut, 2010], affirmed by 691 F.3d 1085 [U.S. Court of Appeals for the Second Circuit, 2012]; see also Department of Education Office of Civil Rights Agreement with Rutgers University, No. 02-08-6001 [July 28, 2015].) Investigations and litigation bring with them the potential for costs, distraction and adverse publicity, and as a practical matter, a certain loss of control over the athletics program as the federal government and courts make decisions affecting the institution.  

Title IX issues were addressed by Northwestern, CAPA and amici in briefings to the Board. Northwestern argued that extending collective bargaining rights to scholarship football players would have Title IX ramifications because paying some male student athletes (whether in cash or other economic benefits) without paying female student athletes would violate Title IX's equal treatment requirement. CAPA argued that Title IX does not require the type of equivalence that Northwestern suggests and asserted that Northwestern "already spends more on the football team than on all of its women's teams combined."

By declining jurisdiction, the Board ultimately did not address the Title IX issue. But the threat created by the Northwestern case underscores the complex Title IX issues that exist for athletic programs managing recent and future changes affecting student-athletes. These changes have been brought about voluntarily by the NCAA, the conferences and the institutions. In some instances, student-athletes have resorted to the courts to address their issues. (See Holland & Knight's alert, " Boston Ordinances Proposed to Address Student-Athlete Safety and Scholarships," Oct. 15, 2014.)

Colleges and universities must continue to manage these reforms with careful consideration to their obligations under Title IX. For example, if a conference agrees to allow its member institutions to enhance their athletic scholarships to provide for the "cost of attendance," are those institutions providing enhanced scholarships to all of their sports or only to revenue-generating sports? If a Division I institution changes the way meals and incidentals are provided to student-athletes in accord with NCAA guidance, are those changes applicable to all teams, or only to the football or men's basketball team? In either instance, nothing prohibits an institution from providing such benefits, and many colleges will be tempted to provide such benefits to remain competitive in their conferences. Still, each institution also must assess how any changes might impact their entire athletic program with regard to their federal obligations under Title IX.

Conclusion

The Board's decision is a win for Northwestern and for private colleges and universities that potentially faced unionization efforts by scholarship student-athletes. With the unionization issue settled for the time being, institutions now must contend with a range of other changes and reforms, whether initiated by colleges, conferences, the NCAA or legal challenges by student-athletes. Through it all, institutions must not lose sight of their obligations under Title IX. While providing a benefit allowed by the NCAA might provide a competitive edge to a team, institutions must assess carefully whether the benefit is implemented in a way that ensures compliance with Title IX.

Holland & Knight's Collegiate Athletics Team has followed – and will continue to follow – each of these issues and can advise clients on these and other matters related to their athletic programs. We have deep experience advising institutions on the obligations and impact of Title IX, as well as on NCAA and other reporting issues, drafting contracts for individuals in athletic departments, separating from coaches when the situation demands and athletic conference realignment matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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