Are College Football Players on Scholarships “Employees?” An NLRB Regional Director Says “Yes”

By: Mark D. Nelson

On March 26, 2014, the National Labor Relations Board’s Regional Director (RD) in Chicago ruled that Northwestern University’s football players who receive scholarships are “employees” under the National Labor Relations Act and have the right to form a union.   The potential implications of this ruling are significant.  If the decision is not overturned by the National Labor Relations Board (NLRB) or a federal court, every private college and university in the country that has scholarship athletes could face the unionization of athletes in sports that generate significant revenue.  Public universities could also be affected under state labor laws.

The RD found that the university, through the football program, exerts significant control over the football players.  During the six-week training camp immediately before the season, athletes are given daily itineraries that dictate football-related activities for that day.  During training camp, the players spend between 50 and 60 hours every week engaged in football-related activities.  In season, the players spend between 40 and 50 hours per week in practice, travel and playing games.  The coaching staff sets all of the details for away games and the activities of the players throughout the trip.  During the off season, players are expected to spend 12 to 25 hours of work on football activities.  In addition, the players must follow rules set by the coaching staff, including regulations concerning personal conduct, alcohol and tobacco use, and internet conduct and protocol.

The economics of college football played a large part in the RD’s decision.  From 2003-2012, the football program generated almost $235 million in revenue for the university through ticket sales, TV deals, merchandise and licensing agreements.  For their football services, the players receive tuition, fees, books, and room and board for up to five years.  These benefits have a monetary value up to $76,000 per year and $380,000 over five years.  The players do not receive a paycheck, but the RD found that the players “nevertheless receive a substantial economic benefit for playing football.”  Another significant fact was that each season the players had to sign a “tender” for their scholarships, which the RD determined to be “an employment contract.”  According to the RD, “it is clear that the scholarships that players receive are in exchange for the athletic services being performed” since the scholarships are tied to the players’ athletic performance; the scholarships can be revoked if players quit the team or violate team rules.  On the other hand, the RD found that walk-on players were not employees because they do not receive scholarships or any other economic benefit from the school.

Northwestern can appeal this decision to the NLRB in Washington D.C. and the legal battle could go on for several years.  In the meantime, the RD will schedule an election for the scholarship football players to vote on being represented by the College Athletes Players Association (CAPA).

Among the several questions/issues raised by this decision are:

Would scholarship athletes in sports that generate little or no revenue be considered employees?

As employees, are the football players entitled to minimum wage and overtime pay?

Are they covered by the Occupational Safety and Health Act and other employment-related laws?

Will this decision impact college graduate assistants, who are not employees under current NLRB law?

This unprecedented ruling is consistent with other recent Labor Board decisions establishing new law or reversing long-standing decisions, which make the National Labor Relations Act more favorable to labor unions.  This agenda is unlikely to change in the near future.