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April 24, 2014

The NLRB's Latest Attempt At Administrative Legislation: The Northwestern Case

On March 26, 2014, Peter Ohr, the Regional Director for Region 13 of the National Labor Relations Board ("NLRB"), continued the NLRB's head long rush to expand the coverage of the National Labor Relations Act ("Act") by holding that scholarship football players for Northwestern University were "employees" as that term was defined by the Act, and, therefore, were entitled to vote on whether they wanted to be represented by a union. The Regional Director, applying the common law definition for "employee," found that the scholarship players were employees of the University because the "players perform services for the benefit of the [University] for which they receive compensation." A review of the decision, however, demonstrates the Regional Director's inherent bias in reaching that result.

Initially, the Regional Director found that "it will effectuate the purposes of the Act to assert jurisdiction herein." The Regional Director, however, ignored the NLRB's acknowledgment in Brown University, 342 NLRB 483 (2004), that:

The Supreme Court has recognized that principles developed for use in the industrial setting cannot be "imposed blindly on the academic world." NLRB v. Yeshiva University, 444 U.S. 672, 680-681 (1980), citing Syracuse University, 204 NLRB 641, 643 (1973).

342 NLRB at 487.

The Regional Director's attempt to distinguish Brown by arguing that, unlike Brown, the scholar athlete's primary focus while in school is athletics, not academics, ignores two important facts: (1) the student athlete has to be enrolled in Northwestern to participate in his or her chosen sport and to receive financial aid; (2) the student athlete must demonstrate satisfactory academic progress to maintain his or her eligibility to participate in his or her chosen sport. In addition, like in Brown, scholarship athletes receive the same grant in aid packages from the University whether they are an All-American quarterback or a third-string tackle. Finally, the Regional Director's characterization to the contrary, the vast majority of scholarship athletes obtain their college degree and do not go on to professional sports careers.

In addition, the Regional Director wrongly placed the burden of demonstrating that scholarship players are not employees on the University, citing NLRB v. Kentucky River Community Care, Inc., 516 U.S. 706 (2001). The issue in Kentucky River, and the other cases cited by the Regional Director, however, was not whether the individuals were employees but, whether the employees were eligible to be included in a proposed bargaining unit. In Kentucky River, the Union objected to certain employees being excluded from a proposed bargaining unit because they were supervisors. The ALJ placed the burden on the employer to demonstrate that the employees were not supervisors and, finding that the employer failed to carry that burden, excluded the employees from the bargaining unit. The United States Supreme Court reversed, finding that the burden to prove that an employee should be excluded from a bargaining unit fell on the party seeking exclusion. As noted above, there was no question that the alleged supervisors were employees.

And, the Regional Director's conclusion that the scholar athlete "receive compensation for the athletic services they perform . . . throughout the calendar year," ignored the National Collegiate Athletic Association ("NCAA") Constitution and Bylaws which he admits closely regulates the University's relationships with scholar athletes.

Article 2.9 of the NCAA Constitution provides:

Student-athletes shall be amateurs in intercollegiate sport, and their participation should be motivated by education and by the physical, mental and social benefits to be derived. Student participation in intercollegiate athletics is an avocation.

NCAA Bylaws, article 12.01.1 provides, "Only an amateur student-athlete is eligible for intercollegiate athletics participation in a particular sport." NCAA Bylaws, article 12.01.4 provides, "A grant-in-aid administered by an educational institution is not considered to be pay or the promise to pay for athletic skill, provided it does not exceed the financial aid limitations set the Association's membership." (emphasis supplied). NCAA Bylaws, article 12.02.2 defines "pay" as follows: "Pay is the receipt of funds, awards or benefits not permitted by the governing legislation of the Association for participation in athletics." NCAA Bylaws, article 15.02.4.1 defines "scholarships" and "grants" as financial aid. By holding that Northwestern scholar athletes are employees of the University, the Regional Director necessarily renders those students and universities in violation of the NCAA rules which prohibit athletes from receiving "pay" and thereby renders them ineligible to participate in intercollegiate sports. In addition, although the instant case was limited to football players, the Regional Director's reasoning could apply to any grant-in-aid athlete.

The NLRB has granted Northwestern's petition to review the decision but will allow the election to go forward and will impound the ballots pending its decision.

If you have any questions, please contact the Hiscock & Barclay lawyer with whom you normally work or any attorney in our Labor & Employment Practice Area.

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