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What the NLRB Memo Might Mean for the Future of College Athletics

November 3, 2021
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Much ado was made earlier this year when the NCAA announced that for the first time, student athletes would be allowed to profit from the use of their name, image and likeness.  Examples like Hercy Miller, the freshman basketball player for Tennessee State, who signed a $2 million deal weeks after the rules change, were covered incessantly by the media.

But while the NCAA rules change has grabbed all of the headlines, a memo issued by the NLRB last month could potentially have an even broader impact on college sports.

The NLRB’s general counsel, Jennifer Abruzzo said she issued the memo, in part, to: “Help educate the public, especially players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, about the legal position that I will be taking regarding employee status and misclassification in appropriate cases.”  

That legal position, as summarized in the memo, is:

“Players at Academic Institutions perform services for institutions in return for compensation and subject to their control.  Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment.”

In her memo, Abruzzo revisits the case of the Northwestern University football team. In 2015, its players attempted to organize for the purpose of collective bargaining, classifying themselves as university employees. At the time, the NLRB declined to support the Northwestern athletes, saying, that creating different rules for public schools and private ones “would not promote stability in labor relations.”

Six years later, on the heels of the Supreme Court ruling in the matter of National Collegiate Athletic Association v. Alston Et Al., the door is now opening for teams to follow the path toward unionization that Northwestern athletes sought.

What does this ruling mean for student athletes?

This is the most common question being asked, and the best answer is, only time will tell. That being said, it certainly moves college athletes closer than ever to two major changes: the right to collectively bargain to improve their position, and the opportunity to be paid as employees of the college.

Critics of the memo and its potential fallout say it will ultimately hurt private institutions and potentially cripple some college programs. They point out that this memo paves the way for:

  • Students to have a bargaining representative negotiate with the school on their behalf
  • Student-athletes to collectively bargain not just potential wages, but working conditions, holiday time off, health benefits and other costly benefits afforded to employees of the institution.
  • Public institutions to be at a severe competitive advantage when it comes to recruiting top athletes. Because public institutions are not covered by the National Labor Relations Act, an athlete could conceivably forgo a public university offering only a scholarship, in favor of a private institution where they could potentially be paid, and receive other benefits.

The call for student athletes to be better compensated, particularly at programs where their sport earns millions of dollars in revenue for the school, is not a new one. However, following changes in the rules in more than 20 states, as well as the Supreme Court ruling and the NLRB memo, it is clear that the tides are rapidly changing in favor of the student athlete.

To read the entire memo from the NLRB General Counsel, click here.

Charles Swanekamp focuses on business law, commercial litigation, and the defense of accountants and attorneys in disciplinary and malpractice matters. His litigation practice includes business valuation for closely held corporations, shareholder disputes, securities litigation, contractual disputes and trademark and copyright litigation. Mr. Swanekamp also practices in sports and entertainment law and represents both amateur and professional athletes and sports organizations as well as radio and television personalities on a wide variety of legal matters. He can be reached at 716-566-7253 or cswanekamp@gross-shuman.com

 

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