On March 26, 2014, Region 13 of the National Labor Relations Board (Chicago) held that Northwestern University football players are employees of the university and have the right to unionize. Relying on the broad common law definition of “employee,” the NLRB ruled that football players that receive scholarships are employees because of the university’s right to control the players, the significant time the players devote to football, and the fact that they receive “compensation” in the form of scholarships. Northwestern University has already stated that it intends to appeal this decision to the Seventh Circuit. If the decision is affirmed, not only will the players have the right to unionize, but collegiate athletic programs will likely be the next target of the NLRB’s aggressive attacks on employer workplace rules.
Technically, this decision impacts only Northwestern University football players, but it has the potential to have significant consequences for collegiate sports. First, this creates a precedent on which other student athletes at private universities could rely in their efforts to unionize. In addition, the NLRB’s broad definition of “employee” (if applied by other government agencies or courts) could raise a number of significant questions, some of which include:
- Will the NLRB’s determination that scholarships are “compensation” impact the IRS’s analysis of whether scholarships are subject to FICA, social security, Medicare and other taxes? And if so, will those withholding obligations apply in prior years that are still open resulting in universities having a springing liability for failure to withhold and remit those taxes?
- Can an athlete’s on-the-field injury be a basis for a workers’ compensation claim?
- Will athletes that are cut from the team be eligible for unemployment benefits?
- Will athletes who do not receive scholarships or who receive more limited scholarship funds have a claim under the Fair Labor Standards Act or state wage and hour laws for unpaid wages failure to comply with minimum wage laws?
- Will athletes be entitled to participate in employee benefit plans if they are employees of the university?
Right now, there appear to be more questions than answers regarding this decision, so it is an issue that is worth monitoring.
A copy of the NLRB’s decision can be found at http://mynlrb.nlrb.gov/link/document.aspx/09031d4581667b6f.