Major League Baseball (MLB) exercised its legal right and remedy guaranteed pursuant to current federal labor laws when it commenced a lockout of its players shortly after the five-year collective bargaining agreement (CBA) between MLB and the Major League Baseball Players Association expired at midnight on December 2.

This marks the first work stoppage in MLB since 1994-95. In a letter announcing the lockout, Commissioner Rob Manfred said,

“We are taking this step now because it accelerates the urgency for an agreement with as much runway as possible to avoid doing damage to the 2022 season.”

Without a new agreement, all activity between MLB Owners and players and transactions between players on the 40-man roster (union members) must cease. All communications between the union member players and the major league clubs will end until a new collective bargaining agreement is reached between the parties.

While the lockout prevents players from accessing team facilities — being physically “locked out” — it will also freeze all offseason business. Teams will not be able to negotiate with free agents or engage in trades with each other. The annual Winter Meetings were cancelled shortly after the lockout began.

Typical off-season roster deadlines are already being affected as the annual Rule 5 draft, continuously held since 1920—even through past labor disputes—has already been postponed indefinitely

(though the minor league portion, which does not involve MLBPA union members, will proceed as scheduled). Player arbitration, scheduled to be held in February, may also be in jeopardy. The lockout, if it continues, also may affect Spring Training, with exhibition games currently scheduled to begin February 26, 2022. In November, Commissioner Manfred distinguished an offseason lockout from “a labor dispute that costs games.” He also said a lockout “moves the process forward” during the offseason.

Historically, whether initiated by employers or employees, work stoppages have been employed as a useful tool in labor negotiations. Through legally protected work stoppages, either management or labor can attempt to leverage their position — employees denying employers the benefit of their work and employers denying employees the opportunity to work. MLB offseason lockouts have also effectively preempted player strikes in the past and lowered the possibility of affecting the regular season and the potential cancellation of any games during the 162 game regular season. MLB’s three previous lockouts were resolved without the loss of regular season games. Comparatively, MLB’s five previous strikes resulted in the loss of 1,720 games, including 921 games and the 1994 post-season during the 1994-95 strike.

MLB is not the only sport to use work stoppages in negotiating labor disputes. The National Basketball Association has had to shorten seasons due to lockouts, most recently in 2011. The National Football League used replacement players to avoid losing games during the 1987 strike and ended a lockout in 2011 just before the start of the regular season. The National Hockey League lost the entire 2004-05 season due to a lockout and, most recently, had to shorten its season after a lockout to begin the 2012-13 season.

Lockouts are not only used in sports. For example, in 2016, Long Island University locked out faculty members for 12 days after the union contract expired in an effort to break the union’s routine of striking during five of the previous six labor negotiations.

Lockouts are not without risk, in particular work stoppages can negatively impact consumers/fans and public opinion of the business. “I don’t think ’94 worked out too great for anybody,” Commissioner Manfred said, “That’s what it’s about. It’s avoiding doing damage to the season.”

Despite the historical use of both legal remedies by labor and management,

the Build Back Better Act, pushed forward by President Joe Biden and recently passed by the House of Representatives, seeks to tip the scales in organized labor’s direction as the law would effectively ban management’s ability to permanently replace economic strikers or use lockouts.

Of specific interest, the Act contains no corresponding restriction on a union’s strike counterpart. Jackson Lewis’ Labor Relations Practice Group has discussed the Act’s impact on established employer labor practices.

Jackson Lewis’ Sports Industry Team will continue to monitor the MLB work stoppage and labor developments. Please feel free to reach out to any member of the Team with questions.

Not only are name, image, and likeness (NIL) rights being asserted in collegiate sports, high school athletics are beginning to experience expansion of NIL rights as well.

After the National Collegiate Athletic Association (NCAA) announced it would no longer enforce almost all of its NIL rules prohibiting individual athletes competing at NCAA-affiliate institutions from marketing and profiting from their NIL, prohibitions against high school athletes capitalizing on the same NIL rights were still the national standard. Shortly after the NCAA’s announced change, Executive Director of the National Federation of State High School Associations Dr. Karissa Niehoff commented that the NCAA’s change does not affect high school athletes and member-state rules prohibiting athletes “from receiving money connected to wearing their school uniform.” However, as Dr. Niehoff acknowledged,

high school athletics are governed state-by-state and several are revisiting their rule books.

In California, the California Interscholastic Federation (CIF) has taken the position that their rules never prohibited athletes from profiting from their NIL rights, as the CIF is unwilling to declare an athlete ineligible for also participating in the state’s film and television economy. However, California prohibits athletes from using their school’s name, logos, uniforms, or marks in endorsements.

New York and New Jersey have joined California in granting high school athletes NIL rights. While the New York legislature has yet to pass a state law granting NIL rights to college athletes in the state, the New York State Public High School Athletic Association (NYSPHSAA) executive committee has revised the state’s amateur rule to allow high school athletes to benefit from their NIL rights without jeopardizing their amateur status.

However, the NYSPHSAA revision contains restrictions similar to California’s rule. New York athletes also are prohibited from using their school’s name, logos, marks, or affiliation with the NYSPHSAA in any endorsements. The new NIL rights also prohibit student-athletes from appearing in any endorsement wearing their high school uniform. A violation of these restrictions could result in the loss of eligibility to compete. NYSPHSAA Executive Director Robert Zayas referenced not only the NCAA rule change but the rise in “social media influencers” and the difficulty in distinguishing between online fame and athletic fame to enforce restrictions.

New Jersey is the latest to empower high school athletes with endorsement rights. The New Jersey State Interscholastic Athletic Association’s executive committee (NJSIAA) approved an NIL proposal to permit athletes to benefit from their NIL rights. The New Jersey Association has adopted the California model by prohibiting athletes from using their school logos and marks. New Jersey athletes also are prohibited from endorsing certain categories of products and services, including adult entertainment, alcohol, cannabis, gambling, and firearms. NJSIAA Executive Director Colleen Maguire commented,

“Everyone is excited. I do think there are athletes … who right now have a standing and a presence that probably are going to profit off it.”

The New Jersey rule will go into effect on January 1, 2022.

While states are making or considering NIL changes for high school athletes, some athletes are unwilling to delay profiting from their NIL rights. Top basketball recruit and scheduled 2023 high graduate Mikey Williams announced a deal with a sports agent and a multiyear endorsement deal with Puma. Williams avoided potential state NIL restrictions because he attends an independent high school in North Carolina, which is not governed by the North Carolina High School Athletic Association (NCHSAA). The NCHSAA is scheduled to review its NIL policy during its December Winter Meeting.

Jackson Lewis’ Sports Industry Group will continue to monitor the ongoing NIL issues on the federal and state level and the impact on the sports legal landscape. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

 

Unable to find a student-athlete willing to file an unfair labor practice charge to support the effort of the General Counsel of the National Labor Relations Board (NLRB) to reclassify student-athletes as “employees” as defined in the National Labor Relations Act (NLRA), Michael Hsu, co-founder of the recently formed college basketball player advocacy group, the College Basketball Players Association (CBPA), has filed an unfair labor practice charge (Case No. 25-CA-286101) with Region 25 of the NLRB in Indianapolis accusing the National Collegiate Athletic Association (NCAA) of violating Sec. 8(a)(1) of the NLRA “by classifying college athletes as student-athletes.”

According to Hsu, current players were not willing to file a charge because they feared retaliation and were concerned about causing harm to their school or sport.

Interestingly, the NLRA does not require standing to file a charge and the NLRB’s regulations provide that “any person may file a charge alleging that someone has engaged in . . . an unfair labor practice” (emphasis added). This process is authorized because the filing of a charge simply gives the NLRB General Counsel notice that a possible violation of the NLRA may have occurred and should be investigated. Such notice is essential because the General Counsel is legally precluded from searching for alleged NLRA violations on its own initiative. In fact, even if the General Counsel were to witness a clear violation of the Act, absent a pending charge, the office would lack the authority to act.

Hsu’s filing tracks the goals announced in NLRB General Counsel Jennifer Abruzzo’s memorandum (GC 21-08).

With Hsu’s filing, Abruzzo can now attempt to use her “prosecutorial authority” to have an administrative law judge decide that certain student-athletes must be reclassified as college or university employees pursuant to the NLRA. In her memorandum, Abruzzo asserted that the mere reference by schools to student-athletes as anything other than employees is a misclassification of their status and a violation of the Sec. 8(a)(1). The General Counsel will allege the misclassification has a chilling effect that misleads student-athletes to believe they are not entitled to the NLRA’s protection.

Although Hsu and his organization filed the charge on behalf of college basketball players, it is likely that he will assert many of the same arguments that were made in 2015 when the Northwestern University scholarship football players’ attempted to unionize, and later expressed by NLRB General Counsel Richard Griffin in his 2017 memorandum (GC 17-01), which formed the basis for General Counsel Abruzzo’s memorandum. Griffin’s memorandum concluded that scholarship football players meet the broad interpretation of the NLRA’s definition of “employee” and the common-law employee test because they (1) perform services for their institutions and the NCAA in playing football and generating millions of dollars in net profits and fostering an immeasurably positive reputational image which boosts admission applications and alumni donations; (2) are subject to the control of their institution and the NCAA based on the NCAA’s strict rules and compliance requirements and additional controls imposed by the individual institutions; and (3) receive compensation in the form of valuable scholarships covering tuition, fees, rooms, board, books, and additional stipends directly tied to a player’s status and performance on the football field.

NLRB Region 25 in Indianapolis will begin the investigative process and seek information, through affidavits, from the Charging Party (the CPBA). It will request evidence from the NCAA by asking to speak with and take affidavits from specifically identified individuals. In addition, the NLRB will seek significant documentation on the classification issue. The NCAA will likely decline to provide affidavits, as is its legal right; possibly object to some document requests; and submit a position statement with accompanying documentation regarding the proper classification of student-athletes.

It is likely that the NCAA will seek to dismiss the charge by presenting detailed facts as to why it is neither the employer of any student-athletes nor a joint employer of any student-athlete with any college or university.

Since this charge has the support of the NLRB General Counsel and it seeks to change NLRB law, it will likely be referred by Region 25 to the NLRB’s Division of Advice in Washington D.C. It should be expected that the Division of Advice will instruct the Regional Director to issue a formal complaint against the NCAA and schedule a formal hearing on the complaint. Following the issuance of the complaint, the Region will likely issue a press release. An NLRB trial before an administrative law judge could begin (probably in Indianapolis) in about six months, depending on the current NLRB trial schedule.

The Jackson Lewis’ Sports Industry Team will continue to monitor these developments and the potential impact on college sports. Please feel free to reach out to any member of the Team with questions.

A little more than two years ago, James Wiseman was the University of Memphis’ prize recruit expected to lead that school back to the Final Four. Now, following his very limited college career that was plagued by allegations of NCAA rules violations and an NCAA declaration of ineligibility for 12 games, his name may be tied more clearly to an historic piece of federal legislation, The NCAA Accountability Act of 2021, than his feats on the basketball court.

The initial challenge to Wiseman’s eligibility arose after the NCAA declared current basketball Coach Penny Hardaway a lifetime University of Memphis athletics booster because he had previously donated to the University. As a result, Hardaway’s providing $11,500 to Wiseman’s mother to cover the family’s moving expenses to Memphis, at a time when Hardaway was not employed by the University of Memphis or any other NCAA institution, was deemed a violation of NCAA bylaws.

Despite securing a state court injunction allowing him to play, Wiseman later dropped his legal action and the NCAA handed him a 12-game suspension. Ultimately, Wiseman withdrew from the university and waited for the NBA draft the following spring.

Although Wiseman was no longer enrolled at the university, the NCAA subsequently asserted rules violations against the university for honoring the state court injunction and allowing Wiseman to play in three games.

That NCAA case is still pending and is believed to be the motivation for three members of Congress to introduce The NCAA Accountability Act.

The bipartisan bill, introduced by Rep. David Kustoff (R-Tenn.), an alumnus of the University of Memphis, former NFL player Rep. Burgess Owens (R-Utah), and Rep. Josh Harder (D-Cal.) would formally establish due process protections for universities and individuals accused of NCAA regulatory violations. It would completely alter and revise the current NCAA infractions process and investigative method used by the NCAA.

The bill proposes to formally establish and mandate due process protections for NCAA institutional members, student-athletes, coaches, and administrators who have been accused of NCAA bylaw violations or asked to participate in any investigation involving alleged NCAA bylaw violations.

Commenting on his proposed legislation, Rep. Kustoff stated, “The NCAA infractions process is systemically flawed. The NCAA writes the rules, and punishes universities at will.”

Kustoff continued,

“[W]hen you consider that the NCAA … is the prosecutor, the judge, the jury and the executioner. That seems to me to be a violation of due process.”

Among the changes proposed is a new requirement that the NCAA complete an investigation within one year of its introduction, as well as a new statute of limitations that would prevent the NCAA from penalizing anyone for a violation that occurred more than two years before.

The bill also would drastically revise the existing appeals process and give the accused the right to resolve disputes through the use of an independent three-person arbitration panel, require the NCAA to submit annual reports on the status of infractions cases to the Department of Justice (DOJ), as well as submit separate reports to the Attorney General of each state, summarizing its interactions with NCAA member schools locate within that state.

The legislation would authorize the DOJ to remove any member of the NCAA’s Board of Governors and fine the NCAA up to $15 million for failure to follow the regulations as required by the legislation. It also would prevent “confidential sources” from being used by the NCAA as a basis for any of its findings in the enforcement process and limit the ability of the NCAA’s public disclosures regarding an ongoing investigation until formal charges are filed.

Congressman Owens, a former NCAA athlete stated, “The NCAA Accountability Act is a commonsense charge to level the playing field by eliminating favoritism and bias in college athletics through increased transparency in rule enforcement and due process protections.”

Despite recent federal legislation proposals with regard to student-athlete name, image and likeness rights and efforts to amend the National Labor Relations Act to make student-athletes university employees eligible to unionize, these bills have stalled in Congress. The Jackson Lewis Sports Industry Group will closely follow this proposed legislation.

 

 

Inaction in Face of Sexual Assault Allegation

A 20-year-old player in the Chicago Blackhawks organization, Kyle Beach, filed a lawsuit against the team in May 2021 alleging he was sexually assaulted by the team’s video coordinator in May 2010, while the team was involved in the Stanley Cup playoffs. The senior management of the Blackhawks, including its president, general manager, and head coach, were made aware of the assault soon after it occurred, and elected not to promptly investigate the allegations, protect or respond to the player, or discipline the employee involved.

The fallout from the team’s election to put this matter to the side and, instead, focus on the playoffs was – – unfortunately- – foreseeable. The video coach, Brad Aldrich, was allowed to remain on the club’s payroll for several months, receive a playoff bonus, have his name engraved on the Stanley Cup, and quietly resign. Predictably, this failure to effectively deal with this serious allegation, and to terminate Aldrich for engaging in sexual misconduct, allowed him to secure successive employment with a private high school, where he allegedly assaulted and molested another teenage player.

Further, Beach reportedly also timely reported the assault to the National Hockey League Players Association and its leadership, including Executive Director Donald Fehr, and the players’ union failed to take any action to protect the player or help him to vindicate his legal rights. In an interview with Canadian sports network TSN, Beach said about Fehr, “For him to turn his back of the players, when his one job is to protect the players at all costs. I don’t know how that can be your leader. He supposed to have the players’ back, and they definitely didn’t have mine.”

Following the filing of lawsuits against the Blackhawks by Beach, and by a sexually victimized high school player in Michigan, the organization engaged a former Assistant U.S. Attorney to conduct a comprehensive investigation. The report concluded that “no action was taken for three weeks” after the senior leadership of the Blackhawks were informed of the unwelcome sexual activity and alleged sexual assault by the video coach. This lack of response was a violation of the team’s own sexual harassment policy – – which required investigation of all reports of sexual harassment to be conducted “promptly and thoroughly.”

Based on the findings of this investigation, general manager Stan Bowman was forced to resign and his top assistant was dismissed. The former head coach of the Blackhawks, Joel Quennville, who went on to become the head coach of the Florida Panthers, summarily resigned his position in Florida following a meeting with NHL Commissioner Gary Bettman. The NHL has also imposed a substantial fine against the Blackhawks.

This sordid tale is about a sports team prioritizing winning over the well-being of a young player to which it owed a moral duty and responsibility. It’s also about a players’ union that appears to have failed in one of his principal missions – – the well-being of players. The consequences of these failures include lawsuits, the end of several management careers, an avalanche of adverse publicity, and an embarrassing distraction to the team, the league, and the sport. Kudos to Beach for his courage in coming forward and addressing the unfortunate situation in a brutally honest and direct manner.

The message for sports teams and employers generally is to be aware of your existing policies dealing with sexual harassment and other forms of employee misconduct, involve human resource professionals upon learning of such events and seek their input and advice, promptly and thoroughly investigate all allegations of sexual assault, harassment or misconduct, offer counseling or assistance to impacted employees, be prepared to discipline or dismiss the responsible parties, and be aware of any reporting responsibilities that may exist under state law or other regulations. Jackson Lewis attorneys are available to conduct thorough investigations, to help guide employers through such challenging situations, and to provide advice on appropriate employment decisions and other corrective actions.

Texas House Bill 25, “The Save Women’s Sports Bill,” would bar public school students from participating in interscholastic athletic opportunities designated for the opposite “biological sex.”

The proposed legislation was passed by the Texas State Senate by a 19-12 margin, and an amended version of the measure received support and approval from the State House of Representatives. The bill will now be presented to Texas Governor Greg Abbott for his signature.

Governor Abbott, who has strongly supported previous legislative efforts restricting transgender youth participation in interscholastic sports, is expected to sign the bill into law.

The bill’s sponsor, Rep. Valoree Swanson, has explained that the bill seeks to protect competitive fairness, the safety of girls (who might otherwise be competing against bigger, faster, and stronger “biological males”), and girls’ right to equal access to athletic opportunities as guaranteed under Title IX. Acknowledging the University Interscholastic League (UIL), the governing body of school sports in Texas, previously adopted a 2016 rule that requires athletes to compete in sports based on the gender listed on their birth certificates, Swanson maintained her bill only seeks to codify existing UIL rules.

House Bill 25’s stated purpose is to remedy past discrimination for girls who historically were denied sufficient interscholastic athletic opportunities because:

  1. Boys historically participate in interscholastic athletics at higher rates than girls;
  2. Courts have identified a legitimate and important governmental interest in remedying past discrimination against girls in athletics on the basis of sex and endorsed equality of athletic opportunity between the sexes under Title IX; and
  3. Courts have identified that classification by sex is the only suitable classification to promote the governmental interest of providing for interscholastic athletic opportunities for girls.

The bill bars schools from allowing students to compete in an interscholastic athletic competition authorized by the district or school that is designated for the biological sex opposite to the student’s biological sex.

Schools or districts must to look at the student’s official birth certificate to determine biological sex. If an official birth certificate is not obtainable, then another governmental record must identify the student’s biological sex.

Rep. Mary Gonzalez is among the legislators who strongly opposed the bill. She commented, “This bill has one target, trans and intersex youth. And knowing that this bill has a target and can hurt innocent children – why are we even having this debate?”

Gonzalez stated, “[T]here is no issue with transgender and intersex students playing sports.”

Several state and national LGBTQ rights groups plan to challenge the bill. Houston’s professional men and women’s soccer teams, the WNBA, and a coalition of around 1,500 companies have taken a stand against the bill.

Legislation similar to House Bill 25 has become law in five other states; however, the Texas bill is arguably the most restrictive. In an effort to address potential privacy concerns, the bill requires school districts to comply with state and federal law regarding the confidentiality of student medical information. It identifies Chapter 181 of the Health and Safety Code and the HIPAA as laws school districts must comply with.

Jackson Lewis’ Sports Industry Team will continue to monitor the progress of this legislation. Please feel free to reach out to any member of the Team with questions.

As vaccination mandates continue to be a topic of discussion and discord in the workplace, the world of college athletics is not exempt from similar mandatory vaccine controversy.

The First Amendment rights of 16 student-athletes seeking a religious exemption as a basis to avoid compliance with Western Michigan University’s (WMU) COVID-19 vaccination requirement were “likely violated,” the U.S. Court of Appeals for the Sixth Circuit has ruled, upholding a decision of the U.S. District Court for the Western District of Michigan.

The 16 student-athletes represented a broad, diverse group of student-athletes participating on WMU’s sports teams including football, baseball, women’s basketball, women’s soccer, the dance team, and cross-country programs.

The Circuit Court upheld the District Court’s issuance of a preliminary injunction allowing the student-athletes to continue participating in intercollegiate athletics at WMU despite the athletes’ refusal to comply with WMU’s mandate that all student-athletes receive a COVID-19 vaccine to continue playing and representing WMU in intercollegiate competition.

The Sixth Circuit has jurisdiction over Michigan, Ohio, Kentucky and Tennessee, all states containing numerous colleges and universities recognized for their athletic teams.

WMU policy stated that in order “to maintain full involvement in the athletic department,” students must be vaccinated against COVID-19.

This vaccination requirement did not apply to any other students at WMU.

Despite this specific student-athlete directive, the policy provided, “Medical or religious exemptions and accommodations will be considered on an individual basis.”

The Circuit Court focused on the fact that, despite the policy’s recognition of exemptions and accommodations, the WMU denied the student-athlete applications of several student-athletes, stating only that the applicant would have “[n]o participation in Intercollegiate sports.”

In addition, the Court noted, WMU failed to respond to certain accommodation requests, but still prevented the student-athlete from participating as a member of their team in collegiate competition.

The Court also pointed out that WMU only provided the student-athletes the limited choice of getting vaccinated or not fully participating in intercollegiate sports. The Court concluded “that conditioning the privilege of playing sports on plaintiffs’ willingness to abandon their sincere religious beliefs burdened their free exercise rights.”

The Court recognized WMU’s good faith as well as “the burdens COVID-19 has placed on this nation’s universities,” stating its “holding is narrow.”

The Court noted, “[O]ther attempts by the University to combat COVID-19, even those targeted at intercollegiate athletics, may pass constitutional muster.”

However, WMU’s announcement of a process that allows student-athletes to seek individualized exemptions requires the University to explain why it chose not to grant an exemption to any student-athlete seeking such protection.

Jackson Lewis’ Sports Industry Team will continue to monitor any further developments regarding the WMU case and its potential impact on college sports. Please contact a Jackson Lewis attorney or any member of our COVID-19 team if you have any questions.

The on-and-off effort at the National Labor Relations Board (NLRB) to classify “student-athletes” as “employees” has renewed. Although the National Labor Relations Act contains no formal recognition of student-athletes as employees, NLRB General Counsel Jennifer Abruzzo issued a memorandum on September 28, 2021 (GC 21-08) asserting

“her prosecutorial position” that certain players at academic institutions are employees pursuant to her personal interpretation of the Act.

Abruzzo also asserted her view that reference by schools to these student-athletes as anything other than employees is a misclassification of their status. Abruzzo asserted that such misclassification and reference to the term “student-athlete” has a chilling effect that misleads student-athletes to believe they are not entitled to the Act’s protection.

The GC will allege that misclassifying such “employees” as mere “student-athletes” is a violation of Section 8(a)(1) of the Act.

The ultimate goal of Abruzzo’s memorandum is to duplicate the effort of Obama-era NLRB General Counsel Richard Griffin. Abruzzo’s memorandum reinstates, adopts, and updates the reasoning from Griffin’s January 31, 2017 memorandum (GC 17-01), which was later rescinded by Trump-appointee General Counsel Peter Robb in GC 18-02. Arising out of Northwestern University football players’ attempts to unionize in 2015, the January 2017 memorandum concluded that scholarship football players met the broad interpretation of the Act’s definition of “employee” and the common-law test: that they (1) perform services for their colleges and the NCAA in playing football and generating millions of dollars in net profits and immeasurable positive reputational impact boosting admission applications and alumni donations; (2) are subject to the control of their college and the NCAA based on the NCAA’s strict rules and compliance requirements and additional controls at individual institutions; and (3) receive compensation in the form of valuable scholarships covering tuition, fees, rooms, board, books and additional stipends clearly tied to a player’s status and performance on the football field.

The General Counsel can only make arguments to the NLRB itself. It is the Board that decides cases.

In 2015, the NLRB declined to make a conclusive finding regarding the “employee” status of Northwestern’s players. A unanimous Board held, “[W]e conclude, without deciding whether the … players are employees under [the Act], that it would not effectuate the policies of the Act to assert jurisdiction in this case.” Northwestern University, 362 NLRB 1350, 1355 (2015). Thus, the NLRB punted: exercising their statutory prerogative to decline to extend jurisdiction of the law to the players, the Board avoided making a controversial decision.

Ultimately, Abruzzo hopes to encourage student-athletes to either seek the specific protection of rights as employees under the Act by filing unfair labor practices or by encouraging student-athletes to follow a similar approach that the Northwestern football players did in 2014 by filing a petition with the NLRB seeking to become unionized. Without specific recognition by the NLRB following either of these steps by the student-athletes,

Abruzzo’s memo lacks unilateral authority to carry out her goal of having university and college “employees” participating in the stadiums and arenas across the country.

The GC is hopeful that the newly seated Biden majority on the NLRB will see this issue differently.

Abruzzo seeks further support for her position by discussing recent developments in the law, NCAA regulations, and societal landscape that have changed the traditional notion of amateurism and support extension of protection under the Act to collegiate players. These developments include the U.S. Supreme Court’s unanimous decision in NCAA v. Alston finding NCAA rules violate antitrust law; the NCAA rules change in the face of numerous state laws allowing players to profit from their name, image, and likeness rights; and recent collective action taken by collegiate players related to social justice issues and the COVID-19 pandemic.

If the NLRB were to rule that players will be considered “employees” under the Act, it would be in conflict with other federal laws. A federal judge in Pennsylvania had denied a motion to dismiss claims by players that their college and the NCAA are joint employers under the Fair Labor Standards Act (FLSA) and are owed minimum and overtime wages. While the players cleared an initial hurdle in the FLSA suit, the decision cuts against rulings from other federal circuits that the players are amateurs, lacked an expectation of compensation and are not employees under the FLSA.

These other laws and other unaddressed issues still raise numerous questions even if student-athletes are formally determined to be employees by the NLRB. A few of these questions are:

  • Will the scholarships these “employees” are currently receiving from their schools because of their athletic prowess be considered income, subject to federal, state and local tax?
  • In addition to becoming subject to potential collective bargaining agreements like professional athletes, are student-athletes going to enter into individual employment contracts with their universities that can be terminated, via release for poor performance or injury?
  • Will student-athletes be willing to exercise their legal right to strike? If they do, what will happen to the status of their season if they are the only team to strike and they miss an extensive part of their season, especially for star players seeking to become professionals.

Jackson Lewis’ Sports Industry Team will continue to monitor these developments and the potential impact on college sports. Please feel free to reach out to any member of the Team with questions.

 

The NCAA must defend claims that they are a joint employer from student-athletes seeking to be paid for the time they spend participating in collegiate athletic activities. Despite U.S. District Court Judge John Padova’s dismissal with prejudice of wage and hour claims filed by the student-athletes against more than 20 schools that the plaintiffs never attended, he rejected that same argument when raised by the NCAA. Instead, he allowed the Fair Labor Standards Act (FLSA) claim seeking financial remuneration for their participation in Division I athletic activity to continue against the NCAA. (Ralph “Trey” Johnson et al. v. NCAA).

Judge Padova concluded the student-athletes’ allegation that the NCAA is their joint employer, along with the defendant university schools that the student-athletes attended, is possible.

Recognizing that two different entities can be joint employers of the same person if they both have significant control over the employee, Judge Padova utilized a Third Circuit test involving four factors established In Re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation. The four factors to consider if a joint employer relationship exists as outlined in Enterprise include, if an alleged employer can hire and fire the relevant employees; if it has the authority to promulgate work rules and assignments and to set the employees’ conditions of employment; is involved in day-to-day employee supervision and discipline; and has actual control of employee records, including payroll.

Approximately one month ago, Judge Padova allowed the six student-athlete plaintiffs’ claims against their institutions (Villanova, Fordham, Sacred Heart, Cornell and Lafayette) to proceed because the schools had failed to provide sufficient proof to establish that the student-athletes were not employees. Similarly, Judge Padova rejected the NCAA’s defense and effort to dismiss the FLSA action concluding that a possible joint employer relationship exists because the “NCAA does more than just impose rules…it also investigates violations of those rules and imposes penalties, including the firing of student athletes, for those violations”.

Judge Padova concluded,

“the complaint plausibly alleges that the NCAA exercises significant control over the hiring and firing of student athletes, including plaintiffs, such that the complaint satisfies the first factor of the Enterprise test with respect to the NCAA.”

Jackson Lewis’ Sports Industry Group will continue to monitor the progress of this case and its potential impact on college sports. Please feel free to reach out to any member of the Group with questions.