In the midst of the NCAA March Madness, a distraction is taking place. A regional director for the National Labor Relations Board (NLRB) ruled last month that members of the Dartmouth men's basketball team are employees of the school. This ruling will allow the basketball team to organize under the NLRB rules, and they decided to join Service Employees International Union (SEIU).
Specifically, the NLRB Regional Director stated that Dartmouth University "has the right to control the work performed by the Dartmouth men's basketball team, and the players perform that work in exchange for compensation," and found that the university exerted control through its requirement that players follow strict practice and fitness programs. Further, the school provided players with free athletic equipment and other benefits and scholarships. These are not currently taxable to the student athlete, but under a union environment they may be treated as compensation and thus taxable.
As of this date, Dartmouth is refusing to come to the bargaining table with the players. If the union eventually wins and bargains, scholarships and other perks may be considered income to the athletes and subject to income tax.
It feels like déjà vu. In March 2014, the Chicago district of the National Labor Relations Board ruled that Northwestern football players qualify as employees of the university, and therefore can unionize. Similar to the reasoning for the Dartmouth basketball team, the NLRB’s Regional Director determined that the students who accept the scholarships are signing, in effect, employment agreements. He reasoned that the school controls the activities of the students and has rules in place that the students must follow or be in violation of their scholarship requirements.
In the Northwestern case, walk-ons would not be considered part of the bargaining unit even though they must follow the same work rules as the scholarship players because they are not compensated by the university (they do not receive scholarships). The NLRB director reasoned that walk-ons do not face the same potential loss of compensation as scholarship players if they stop playing football for the employer. Therefore, the NLRB Director is in effect allowing for a “fractured unit” by declaring that walk-ons don’t count, even if they play and are subject same conditions as scholarship players.
The NLRB Board decided in the end that Northwestern football players could not organize. They held that since Northwestern was in the Big Ten conference, which also housed public institutions, there was a “risk that adjudicating the case could lead to labor instability, as those public institutions would not be subject to the National Labor Relations Act.” In a unanimous decision, the five-member board declined to exert its jurisdiction in the case and preserved one of the NCAA’s core principles: that college athletes are primarily students.
However, it wasn’t the end of it. In 2017, the NLRB’s general counsel issued a memo concluding that Division I FBS scholarship football players are employees under the NLRA. That memo was later rescinded. In 2021, the NLRB’s current general counsel, Jennifer Abruzzo, issued a memo reinstating the 2017 memo.
The difference in this case is that Dartmouth is in a private league and would not have public institutions that muddy the jurisdictional water. The full board could rule that the college athletes may organize. It is an election year, and depending which party wins, college sports, especially with NILs, may never be the same. Or think of it this way, instead of the Rose Bowl, it will be the UAW Rose Bowl.
Source: Venable LLP 2/12/24, BCLP 2/7/24, NY Times 8/17/15, NORTHWESTERN UNIVERSITY, Employer, and COLLEGE ATHLETES PLAYERS ASSOCIATION (CAPA), Petitioner, Case 13-RC-121359 (3/26/14)