NLRB’s Acting Gen. Counsel Rescinds Memo for College Student-Athletes Considered Employees Under Act
On February 14, Acting General Council of the National Labor Relations Board (NLRB) William Cowen rescinded a number of memoranda including Memorandum GC 21-08, in which his predecessor Jennifer Abruzzo, argued that college athletes are employees under the National Labor Relations Act (NLRA).[1] Cowen did not provide a specific reason for rescinding GC 21-08, commenting generally that he had “conducted a comprehensive review of active General Counsel Memoranda and determined that the following actions are warranted.”[2] Notably, Cowen did not place GC 21-08 within a group of memoranda rescinded “pending further guidance,” [3]; the fact that 21-08 was not included in this section could infer indicate that the Cowen does not plan to take a position on the issue in the near future.
In GC 21-08, Abruzzo had argued that at a minimum, scholarship football and from inferences, similarly situated common law athletes fall within the definition of “employee” under the NLRA.[4] The NLRA defines “employee” to include “any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise.”[5] The NLRA lists certain categories of workers who would not be considered employees, which Abruzzo noted do not include university employees, football players, or students.[6] Moreover, Abruzzo highlighted that at common law, an employee was anyone who performed services for another and could be controlled by the other person, with payment being a strong indicator of an employment relationship.[7] She argued that since NCAA football players perform a service for their school (playing football), receive compensation in the form of scholarships and stipends, and have their schedules subject to the control of the university, they would fall under the common-law definition of an “employee.”[8]
Those who oppose student-athlete unionization (which, if the NLRB deemed student-athletes to be employees, would be protected activity under the NLRA) raise various arguments. First, they highlight the burden student-athlete unionization would put on schools, potentially leaving them without enough revenue to fund sports that do not generate revenue.[9] Second, if athletes were to subsequently be considered “employees” under the Fair Labor Standards Act (FSLA), colleges may begin to remove traditionally covered services for student-athletes such as housing, meals, and other “fringe benefits,” arguing that these benefits are “pay” under the FLSA.[10] Third, if athletes are “employees,” it may be easier to “fire” them by revoking their scholarships or removing them from teams, which would be detrimental to the academic goals of the NCAA. [11]
The other common argument opposing employee status for student athletes, related to the “history and tradition” of amateurism in college athletics, was recently rejected by the Third Circuit in Johnson v. NCAA.[12] The court adopted Justice Kavanaugh’s argument in Alston v. NCAA that “the argument ‘that colleges may decline to pay student athletes because the defining feature of college sports … is that the student athletes are not paid,’ is circular, unpersuasive, and increasingly untrue.”[13]
The Johnson court was facing a question of whether student-athletes were employees under the FLSA. [14] The NLRB has noted that it may decline to exercise jurisdiction even if the Board considered student-athletes to be “employees” under the NLRA, if it would not “effectuate the purposes and policies of the Act to do so.”[15] However, some commentators believe that if a court held that student-athletes are employees under the FLSA, the NLRB may reconsider its previous decisions to decline jurisdiction over student-athlete unionization cases under the NLRA. [16] The Third Circuit left often the possibility that student athletes were employees, holding that “college athletes may be employees under the FLSA when they (a) perform services for another party, (b) ‘necessarily and primarily for the [other party’s] benefit,’ (c) under that party’s control or right of control, and (d) in return for ‘express’ or ‘implied’ compensation or ‘in-kind benefits.’”[17]
Looking forward, how the NLRB considers student-athletes as employees can be seen in recent actions. Arbuzzo’s memo asserted that she would consider bringing charges against schools, athletic conferences, and the NCAA for misclassifying student-athletes as non-employees; with Cowen’s recission of GC 21-08, it is unlikely that the Cowen’s office would pursue misclassification charges against these institutions. [18]. Moreover, the Service Employees International Union (SEIU) withdrew in January its petition to the NLRB seeking to represent Dartmouth’s men’s basketball team.[19] This decision came after NLRB Regional Director Laura Sacks had determined that the Dartmouth basketball players should be considered employees under the NLRA.[20] However, the Dartmouth team told the SEIU that it would no longer seek to unionize, expressing concerns that the Trump administration would appoint NLRB officials who would be less sympathetic to their unionization effort.[21] Now that the union’s petition is withdrawn, the national board will not have the opportunity to hear the case and potentially overturn the regional director’s ruling that athletes are employees.[22]
Footnotes
