A unanimous decision on Monday by the National Labor Relations Board (NLRB) ended the Northwestern University scholarship football players’ bid to unionize — without addressing the key issue that has plagued collegiate athletics for so many years: whether college athletes are employees and entitled to the rights as such under federal law.

The case was brought before the five-member NLRB for review after Peter Sung Ohr, the Regional Director for NLRB Region 13 in Chicago ruled on March 26, 2014 that all football players at Northwestern University receiving grant-in-aid scholarships are “employees” within the meaning of the National Labor Relations Act (NLRA). Ohr also certified a unit of all Northwestern University football players receiving scholarships who had not exhausted their playing eligibility and directed that a secret ballot election of these student athletes be held on April 25, 2014 to determine if those players desired representation by the College Athlete Players Association (CAPA) Union.

In determining that Northwestern’s scholarship football players are “employees,” Ohr reasoned that those players should receive compensation for services in the form of tuition, fees, room, board, and books, as well as additional stipends for special circumstances. In addition, the players are subject to special rules, spend a majority of their time on football-related activities, and are recruited primarily for their talents on the field rather than for their academic achievement in high school. Finally, Ohr observed that the Northwestern football team generates significant revenue for the college.

On April 25, 2014, the NLRB did conduct a secret ballot election of Northwestern University’s football players receiving scholarships who had not exhausted their playing eligibility; however, as the NLRB granted Northwestern University’s request to review Ohr’s decision on April 24, 2014, the ballots cast during the April 25, 2014 election were impounded and not counted, pending the NLRB’s decision on review. A total of 22 briefs were filed with the NLRB by the parties and interested amici.

Rather than determine whether grant-in-aid scholarship players are employees under the NLRA, the NLRB exercised its discretion not to assert jurisdiction in this case. The NLRB noted that the National Collegiate Athletic Association (NCAA) exercises a substantial degree of control over the individual member Division I Football Bowl Subdivision (FBS) schools, including the terms and conditions under which the scholarship players practice and play. The overwhelming majority of competitors in FBS football are public colleges and universities over which the Board cannot assert jurisdiction. While Northwestern University is not a public university, the NLRB determined that asserting jurisdiction over Northwestern would likely have ramifications for the other member teams. Therefore, the NLRB unanimously decided that it would not promote stability in labor relations to assert jurisdiction over this case and dismissed the student athletes’ representation petition.

The NLRB emphasized that its decision is based on the unique facts in this case and does not preclude reconsideration of this issue in the future.

As the NLRB has now dismissed the petition, the ballots cast by Northwestern football players over a year ago will not be counted, leaving the outcome of the election a mystery.

This is both the outcome and the prevailing rationale that we predicted in our March 28, 2014 Practice Group Update, where we observed:

Northwestern likely will obtain reversal or substantial modification of the decision (even if CAPA wins an election) given the practical difficulties associated with the complex interaction between private universities and public universities (which are not covered by the National Labor Relations Act), and the intersection of big-time college football and the NCAA rules.

This decision, which appears on its surface to be pro-employer, should not be considered a sign of a shift in the NLRB’s pro-labor agenda. Rather than address the underlying issue of whether the student athletes are employees, the NLRB sidestepped the controversy by unanimously declining to exercise its jurisdiction in this case. Employers should expect the NLRB to continue its aggressive agenda to expand employee rights under Section (7) of the NLRA — as long as the Board’s current majority remains in place.

If you have any questions about how this could impact your business, please contact:

• Sean P. Beiter (716.566.5409; sbeiter@goldbergsegalla.com)
• Caroline J. Berdzik (609.986.1314; cberdzik@goldbergsegalla.com)
• Or another member of the Goldberg Segalla Employment and Labor Practice Group.