College Football Players Are Employees? Who's Next?

The NLRB’s Regional Director in Chicago issued a decision on March 26 in 13-RC-121359 finding the football players at Northwestern University are employees under the NLRA, over the objections of the University. The Regional Director rejected the University’s arguments that the players, who receive “grant-in-aid scholarships” from the University, are more akin to graduate students, held by the Board not to be employees in Brown University, 342 NLRB 483 (2004). The Director also rejected the University’s argument that the players were “temporary employees” who were not eligible for collective bargaining. 

Northwestern’s varsity football team consists of 112 players, 85 of whom receive scholarships that pay for their tuition, fees, room, board, and books in the amount of $61,000 per year ($76,000 per year if they take summer classes). The players receive a “tender” letter at the beginning of their football career that describes the terms and conditions of the offer; are subject to certain rules of conduct; and spend 20-25 hours a week in mandatory activities in the off-season, 40-50 hours per week during the season, and 50-60 hours per week during training camp. The Director found that the players performed “services” for the University that generated revenues of approximately $235 million during the nine-year period of 2003-2012 through the team’s participation in the NCAA Division I and Big Ten Conference through ticket sales, television contracts, merchandise sales, and licensing agreements.

The Director distinguished the graduate assistants who were deemed “not employees” in Brown by the amount of time the Brown students spent on educational studies as compared to work duties. Unlike graduate assistants who were deemed primarily students, the Board reasoned that the players spent more time on athletics “than many undisputed full-time employees work at their jobs” and those hours were more than the players spent on their academic studies. Also, unlike the football players, who did not receive any academic credit for playing football, the graduate assistants received academic credit for performing their duties, and for the substantial majority, those duties were a requirement for them to obtain their graduate degree. In other words, the graduate assistants’ relationship with the university was an academic one, whereas the players’ relationship was an economic one based on large scholarships. Third, Northwestern’s academic faculty members did not oversee the players’ athletic duties, which lessened any concern that allowing them to engage in collective bargaining would have a negative impact on educational decisions.   Critically, the Board also distinguished between general financial aid, which graduate assistants and fellows receive, and the players’ scholarships, which commentators have dubbed “pay-for-play.”

Although this decision affects only the Northwestern varsity football team, it is certain to have ramifications throughout private college athletics. Commenters have referred to this as a “blockbuster” decision that could change the face of college athletics. 

This decision adds to the existing uncertainty of students’ status as employees, given the Board’s decisions. The NLRB has vacillated on the question of whether graduate students, student research assistants, and graduate student teaching assistants who are paid a stipend and required to perform some teaching or research service to their university should be treated as employees. In 2010, the NLRB voted to reconsider its Brown decision, but the parties in the case reached a voluntary agreement in November 2013, and the union withdrew its petition, so Brown is still controlling law. There also has been much litigation regarding whether university faculty are not covered by the NLRA as “management.” And the state of Board law in the medical field concerning medical residents and interns is uncertain since these students also provide compensated services for hospitals. 

The parties have until April 9, 2014 to file a Request for Review of the decision with the Board in Washington, D.C. Northwestern said it would appeal the Regional Director’s ruling to the full NLRB in Washington.

UPDATE: NLRB Postpones Posting Rule Indefinitely

In response to two federal court cases we previously blogged about here and here, the NLRB has indefinitely postponed implementation of its notice posting rule pending appeals in both of those cases.  The bottom line is that no employer needs to post the notice for the time being.

The U.S. Court of Appeals for the D.C. Circuit will hear the NLRB’s appeal of an emergency injunction that court issued against the rule, but the hearing will not occur before September 2012.  In the trial court ruling in that case, the judge found the NLRB's posting rule valid, but its enforcement provisions invalid.  The NLRB is also appealing the South Carolina federal trial court decision we previously blogged about, in which a judge deemed the NLRB's entire posting rule invalid.  No schedule has yet been set for the South Carolina appeal.

See the NLRB’s statement about this issue here.

South Carolina Federal Court Holds NLRB's Notice Posting is Unlawful

As previously blogged here, a federal court located in the District of Columbia upheld the National Labor Relations Board's (“NLRB”) rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act.  While upholding the rule, that federal court did at least strike down the rule’s main enforcement provisions.  A copy of that federal court decision is here.  As we blogged then, another legal challenge to the NLRB’s rule was also pending in a South Carolina federal court.  That decision is now here, and it is a good one for employers.

The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce challenged the NLRB’s rule.  On April 13, 2012 (perhaps Friday the 13th from the NLRB’s perspective), the federal judge in that South Carolina case ruled that the NLRB’s entire posting rule is invalid, finding the NLRB exceeded its authority when it required employers to post notices explaining workers’ rights to form a union. In his ruling, the South Carolina federal judge said the NLRB lacked the legal authority to issue the notice and thus the rule was not lawful.  “Based on the statutory scheme, legislative history, history of evolving congressional regulation in the area, and a consideration of other federal labor statutes, the court finds that Congress did not intend to impose a notice-posting obligation on employers, nor did it explicitly or implicitly delegate authority to the Board to regulate employers in this manner,” the court ruled.

Many labor law professionals feel that the NLRB has become overly aggressive in supporting and expanding union rights during the Obama administration.  This sentiment is especially strong in a conservative state like South Carolina, which also was at the center of a now-settled dispute between the NLRB and Boeing over Boeing’s decision to move production of its 787 Dreamliner airplane from Washington State to South Carolina.  The South Carolina federal judge appears to agree that the NLRB is becoming overly aggressive, stating, “The Board also went seventy-five years without promulgating a notice-posting rule, but it has now decided to flex its newly-discovered rulemaking muscles.”  A copy of the South Carolina decision is here. Its authority is technically legally limited to that particular court, but because of its import we expect it to have an effect nationally as the NLRB seeks to regroup and rethink what it will do.  If the NLRB does not appeal the South Carolina court’s decision, the ruling will stand and, from a practical perspective the posting requirement will be invalidated nationally.  But most pundits anticipate that the NLRB will file an appeal over the South Carolina decision.

The bottom line is that we now have two conflicting federal court rulings on the issue, and await the NLRB’s decision on whether it will appeal the South Carolina ruling, and/or delay implementation of its previously stated April 30, 2012 posting deadline.  Stay tuned.

NLRB Posting Requirements - Update

Update: A federal trial court in the District of Columbia has upheld the notice posting requirement in the National Labor Relations Board's (“NLRB”) recently issued final rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act. To view the Court's decision, click here.  The court also held, however, that the rule’s main enforcement provisions, including making an employer’s failure to post a per se unfair labor practice, are invalid. Unless this decision is overturned or another court finds the rule to be invalid, the notice posting requirement will still take effect April 30, 2012. An appeal is likely in the District of Columbia case, and at least one other court challenge is pending in South Carolina.


For additional information regarding the NLRB's rule and posting requirement, including links to the rule and the poster employers must post, see our prior discussion on this topic by following this
link.

Update - New Rule Requires Employers to Post Notice of Employee NLRA Rights

In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012.  Stay tuned.

For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.

New Rule Requires Employers to Post Notice of Employee NLRA Rights

Your bulletin board full of required workplace postings just got more crowded. The National Labor Relations Board (“NLRB”) has issued a final rule that will require nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act (“NLRA”). The notice must be posted by no later than November 14, 2011 (now postponed until January 31, 2012, see update below).  The new rule is one of many new developments arising from the current NLRB’s implementation of the Obama administration’s labor policy.

This new notice is a form designed by the NLRB. Among other things, it contains:

 

·         A summary of employee rights under the NLRA, including the right to discuss wages and working conditions with co-workers or a union, form or join a union, take collective action to improve working conditions, and engage in other protected activities.

·         Examples of violations of those rights, and an affirmation that unlawful conduct will not be permitted.

·         Information about the NLRB, the NLRB’s contact information, and details on how to file an unfair labor practice charge with the NLRB.

·         A statement about the employer's obligation to bargain in good faith if a union has been selected by employees.

 

This new rule applies to almost all employers except public sector employers, very small employers below the NLRB’s jurisdictional standard for impacting interstate commerce, and other limited classes of employers outside of the NLRA’s jurisdiction. The NLRB may find that an employer’s failure to post the notice constitutes an unfair labor practice. The remedy for a violation may not be severe because the NLRB cannot impose fines – but much worse, a violation can be evidence of unlawful motive and prevent the running of the statute of limitations.

 

The full text of the actual required notice is available here. Private sector employers will be required to post this notice in conspicuous places, including where they customarily post other workplace notices. In addition, employers who customarily post personnel policies and rules on an internet or intranet site must include this new notice there or provide a link to the NLRB’s website section containing the notice. If an employer has employees working at another employer’s site, it will also need to determine whether it can post notices at that site if the other employer does not already have the notice posted. If 20 percent or more of an employer’s employees are not proficient in English and speak the same foreign language, the notice must also be posted in that language. The NLRB will provide translations in such circumstances. Copies of the required 11x17 posters will be available at no cost from the NLRB upon request, and will also be downloadable from the NLRB’s website, www.nlrb.gov. A federal contractor will be regarded as complying with the NLRB’s new posting requirement if it already posts the notice required of federal contractors by the U.S. Department of Labor. See our earlier discussion of those posting requirements here. 

 

The NLRB fact sheet with further information about the rule is available here. There are likely to be legal challenges to the NLRB’s new notice posting rule, and at least one bill has already been introduced in Congress seeking to invalidate it. For now, employers will need to be prepared to comply with the new posting requirement. While already unionized employers will likely see little impact from the new rule other than the actual posting requirement itself, non-unionized employers may be faced with employees raising questions about their rights under the NLRA. Because such questions will invariably be directed toward their immediate supervisors, it is important for non-unionized employers to make sure that supervisors are properly trained regarding how to maintain a union-free environment without violating the NLRA. Non-unionized employers might also be tempted to post their own notice alongside the new NLRB poster, advising employees why a union is not needed. As with all such efforts, missteps can lead to challenges before the NLRB, so employers should consult with their Stoel Rives labor attorney.

 

UPDATE:  On September 14, 2011, the NLRB made available the poster that employers must post.  The link to that poster is here.  The NLRB recently postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers.  See here.  The new effective date of the rule, and the date by which the new notice must be posted, is January 31, 2012.

President Obama Uses Recess Appointments to Fill NLRB, EEOC Seats

This week President Obama announced that he would make recess appointments to fill vacancies on the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC).  The move allows the White House to bypass the Senate confirmation process, which promised to be extremely contentious. 

The appointments will add two Democratic members to the NLRB:  Craig Becker and Mark Pearce.  Both appointees were strongly opposed by Republicans because of their anticipated pro-labor viewpoints.  Becker, a labor law professor, has been associate general counsel for the Service Employees International Union (SEIU) since 1990 and has also served as an AFL-CIO staff counsel since 2004.  Pearce is a partner with the firm of Creighton, Pearce, Johnsen & Giroux in Buffalo, New York, where he represents unions and employees.  President Obama's recess appointments do not include Republican nominee Brian E. Hayes, the Republicans' labor policy director for the Senate Committee on Health, Education, Labor and Pensions, but Hayes' Senate confirmation is not expected to encounter any significant roadblocks. 

The EEOC appointments will bring the agency up to a full compliment of five directors.  The new appointments include: Jacqueline Berrien as EEOC chair, Chai Feldblum and Victoria Lipnic.  Berrien has served as associate director of the NAACP Legal Defense and Educational Fund Inc. (LDF) in New York since 2004 where she has worked on voting rights and political participation issues.  Feldblum, a Georgetown University law professor, played a leading role in drafting the original Americans with Disabilities Act and more recently worked on the ADA Amendments Act.  She has also worked on the proposed Employment Non-Discrimination Act, which would ban employment bias based on sexual orientation or gender identity.  Lipnic is a lawyer with Seyfarth Shaw in Washington, D.C. and served in President George W. Bush's administration as assistant secretary of labor for employment standards from 2002 until 2009.   In addition, EEOC supervisory attorney P. David Lopez will appointed to the post of EEOC general counsel.

What will these appointments mean for employers?  First, expect to see more rule changes.  Both the EEOC and the NLRB have for some time operated without quorums, meaning that the agencies have not been able to take on any controversial cases or make significant rule changes.  Now that they have enough members, expect a flurry of activity from both bodies.  For the NLRB in particular, this may mean reversals of many pro-employer decisions made during the Bush years.  Second, expect both agencies to get a lot more employee-friendly.  President Obama's appointments will appease labor unions and employee advocates who adamantly supported his campaign but until now have not received much in return.  Those groups expect to get a return on their investment, and these appointments will go along way towards making that happen.