The U.S. Soccer Federation (USSF), the governing body for international soccer in the United States, and the unions representing the women’s and men’s national soccer teams, U.S. Women’s National Team Players Association, and the U.S. National Soccer Team Players Association have reached a pair of collective bargaining agreements (CBAs) with identical economic terms. For the first time, equal pay to the players of each team will be provided.

The historic agreements also resolve the long-running equal pay lawsuit women players had brought against USSF. The labor contracts run through 2028.

The key driver in pay disparity between the compensation for the Men’s and Women’s National Teams (USMNT and USWNT, respectively) had been the World Cup prize money received by them from FIFA, the international soccer governing body. The prize money for the men’s World Cup has been about 10 times as large as that of the women’s World Cup. While that disparity, though smaller, will continue, the Men’s and Women’s National Teams and USSF have agreed to pool the prize money received from FIFA for the next two pairs of men’s and women’s World Cup tournaments and divide the players’ share of the pool equally between the players on the two teams. No other country’s soccer federation pools prize money and divides it equally to its men’s and women’s national teams.

USSF will sign separate labor contracts with each union, but the economic terms of each will be the same. These include appearance fees (for participating in a training camp) and game bonuses (for being named to a gameday roster), other prize money, and commercial revenue share. Single game payments can amount to $18,000 for matches, while tournament prize money can reach as much as $24,000 per game. This will ensure that the USMNT and USWNT will both be among the highest paid national teams throughout the world.

USSF has issued a fact sheet providing an overview of the terms reached in both CBAs. Generally, prize money from non-World Cup FIFA tournaments, regional tournaments, and other official tournaments in which both the USWNT and USMNT participate also will be pooled. For the first time, the contracts provide that USSF will share a portion of broadcast, apparel, and sponsorship revenue with the players’ share divided equally between USWNT and USMNT. Ticket revenue and game sellout bonuses also will be equal for the USWNT and USMNT. Further, non-economic conditions are being equalized. Playing surfaces, travel, accommodations, and national team training staffs (allowing for the unique needs of each team) will be the same. Guaranteed salaries and other benefits enjoyed by the USWNT are no longer needed as the various domestic women’s league continue to prosper.

While certain claims from the USWNT lawsuit settled in 2020, these labor negotiations will end litigation that commenced six years ago, which had an impact on sponsorship along with ongoing amassing legal fees. Part of the settlement included a $24 million pool of money that would be paid out upon reaching an agreement on these CBAs that provided the formal terms for equal pay between both teams. Now, the class members can seek a court order to certify the settlement so the payments can be issued to players.

For the first time since the NCAA issued its Interim Name, Image and Likeness (NIL) Policy on July 1, 2021, the NCAA Board of Directors issued new guidance in an attempt to place some limits on the involvement of boosters in the rapidly growing NIL landscape.

The new guidance, issued on May 9, 2022, provides clarity on the limited role of boosters in the recruitment process of a prospective or enrolled student-athlete. The guidance defines a “booster” as an individual, independent agency, corporate entity, or other organization that promotes an institution’s intercollegiate athletics program, who assists with providing benefits to recruits, enrolled student-athletes, or their family members. The definition could also include “collectives,” which are set up to funnel NIL deals to prospective or enrolled student-athletes to encourage them to attend a certain university or leave their current university for another based upon an NIL deal.

Through this guidance, the NCAA is instructing universities that any entity or person who falls under the definition of a booster, including a collective, is not allowed to make NIL deals with prospective or enrolled student-athletes.

With the football and basketball off-season in full swing and the transfer portal rapidly growing, the NCAA believes this guidance helps to establish a common set of expectations for schools as they navigate the NIL world, while maintaining NCAA compliance.

In its directive, the NCAA also noted that the emphasis of the new guidance is on the boosters in the recruiting process and is not intended to question the eligibility of prospective and enrolled student-athletes involved in NIL deals. This seems to be the NCAA’s way of showing its continued support for student-athletes to be able to benefit from NIL deals, while limiting those who are involved in those deals.

Notably, the NCAA stated that while the guidance is effective immediately, the enforcement staff may review potential violations that occurred prior to May 9, 2022. The NCAA added, however, that it will only pursue those actions that are clearly contrary to the interim policy, including the most severe violations of recruiting rules or payment for athletics performance.

The Jackson Lewis Collegiate and Professional Sports practice group is well-versed in NCAA issues and continues to analyze ongoing developments in this area. Please contact a Jackson Lewis attorney with any questions regarding NCAA and any other collegiate and professional sports developments.

In the wake of a recent trial court decision finding that minor league baseball players are year-round employees, California State Senator Josh Becker has introduced legislation proposing that California enact the Minor League Baseball Players’ Bill of Rights.

Click here to read more on the California Workplace Law Blog.

Maryland State Delegate Jay Walker has introduced Maryland House Bill 1431, entitled Public High Schools-Student Athletes-Compensation for Name, Image and Likeness, which would authorize public high school athletes in the state to enter into name, image and likeness contracts (NIL), provided certain conditions are met, including the co-signing of any agreement by a parent or guardian. The proposed legislation, which would not take effect until July 1, 2023, would amend existing Maryland Education legislation and add to Section 7-129 and provide these specific rights to any public high school athlete who participates in an interscholastic athletic program at any public high school in the state.

The bill would prevent the State Superintendent, any County Board, or any individual public schools from establishing any rule, requirement, standard or other limitation preventing student-athletes from earning compensation for their name, image or likeness. The same limitation preventing limitations on NIL rights would also apply to any athletic association within the state, including the Maryland Public Secondary Schools Athletic Association. It would also prevent any rule that would restrict a school from participating in high school athletics if a student-athlete from that school has received compensation for name, image and likeness rights.

The proposed legislation also restricts any public school or any groups affiliated with the school from providing compensation to the student-athlete for their NIL rights or from limiting the student-athlete from using their NIL for a commercial purpose when the student-athlete is not involved in official team activities.

As with most state NIL laws legislating college athletes, the bill provides student-athletes with the right to secure representation for contracts or legal matters.

In addition, the legislation does provide a few limitations to the student-athlete. Specifically,

the bill provides that the terms of the contract cannot be in conflict with any high school athletic program contract and that the student-athlete does not have the legal right to utilize the school’s name, trademarks, logos or other intellectual property owned by the school in any NIL agreement.

If passed by Maryland state legislators and signed into law, Maryland would join other states including California, New York and New Jersey, which have already authorized NIL rights to the high school athletes in their states.

Unlike Maryland which would protect NIL rights pursuant to state law, 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, the CIF prohibits athletes from using their school’s name, logos, uniforms, or marks in endorsements.

New York and New Jersey have also 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.

New Jersey has also empowered high school athletes with specific NIL  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.

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.

 

Ongoing efforts to urge the National Labor Relations Board (NLRB) to classify student-athletes as employees continue with the latest unfair labor charge filed by the National College Players Association (NCPA) and their Executive Director Ramogi Huma. The unfair labor practice charge alleges that the NCAA, the Pac-12 Conference, and University of Southern California (USC) and the University of California, Los Angeles (UCLA) have violated the National Labor Relations Act (NLRA) and that NCAA Division-I men’s and women’s basketball and FBS football players should be recognized as university employees.

Huma is no stranger to this ongoing, off-the-field battle over the status of student-athletes in college athletics.

Seven years ago, Huma supported a group of Northwestern University football players petitioning the NLRB to unionize as employees of the University. Despite regional support for their petition, the NLRB ultimately dismissed the petition and essentially denied the claim that these individuals were university employees and should be allowed to collectively bargain.

Huma’s current charge follows an initial, similar charge filed by Michael Hsu, co-founder of the College Basketball Players Association (CBPA), with Region 25 of the NLRB in Indianapolis,

which accused the National Collegiate Athletic Association (NCAA) of violating Sec. 8(a)(1) of the NLRA “by classifying college athletes as student-athletes” (Case No. 25-CA-286101). That charge is still be investigated by the NLRB and is currently pending.

Huma likely will attempt to transition his current charge into a complaint requiring a judicial determination by an administrative law judge by asserting many of the same arguments made in 2015 when the Northwestern University scholarship football players attempted to unionize. These same arguments were later expressed by former NLRB General Counsel Richard Griffin in his 2017 memorandum (GC 17-01), which has formed the basis for General Counsel Jennifer Abruzzo’s recent memorandum.

Although nearly two years after the failed organizing attempt by the Northwestern players, Griffin’s memorandum asserted that scholarship football players met 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.

Both current charges support the conclusions announced by Griffin in his 2017 memorandum and the goals asserted by current Abruzzo in her memorandum issued on September 28, 2021 (GC 21-08)

and her plan to use the General Counsel’s “prosecutorial authority” to pursue an administrative law judge determination that certain student-athletes must be reclassified as  university employees pursuant to the NLRA. In her memorandum, Abruzzo asserted that the mere reference by schools to student-athletes as anything but employees is a misclassification of their status and a violation of the Sec. 8(a)(1) of the NLRA.

However, the charge filed by Huma has one important distinction from Hsu’s charge. It has named UCLA, a public entity, as a respondent in the charge.

Section 2(2) of the NLRA excludes from the definition of an “employer,” over whom the NLRB may assert jurisdiction, “any State or political subdivision thereof….”

Thus, any clearly public institution, created by the state or administered by individuals responsible to public officials or to the general public, should be exempt from NLRB jurisdiction under section 2(2) of the NLRA. This longstanding restriction on state institutions being excluded from the jurisdiction of the NLRA has been confirmed. NLRB v. Natural Gas Utilities District of Hawkins County (402 U.S. 600 (1971)); and Children’s Village, Inc. 197 N.L.R.B. 1218, 80 L.R.R.M. 1747 (1972).

The efforts to overcome this potential jurisdictional block with regard to public institutions may be aided by Senator Chris Murphy (D-Conn.) and Senator Bernie Sanders (D-Vt.). They have proposed the College Athlete Right to Organize Act. Their proposed legislation would amend the NLRA and provide student-athletes collective bargaining rights, regardless of any existing state law restrictions.

The legislation proposes that the definitions of “employee” and “employer” under Section 2 of the NLRA be rewritten and amended to consider any college-athlete that receives a grant-in-aid or other compensation from their college for their participation in intercollegiate athletics to be an “employee” of their respective college, whether a public or private institution.

As a result, student-athletes would be recognized as university “employees” and able to seek redress for all labor issues arising with their “employers” through the NLRB, including representation issues, recognizing a bargaining unit or resolving other labor disputes.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the ongoing 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 Group with questions.

Iowa lawmakers have expanded on federal efforts to make student-athletes employees. They have introduced legislation (H.F. 2055) to classify intercollegiate athletes at Iowa’s state universities as state employees. This follows a year in which numerous state legislative efforts established name, image, and likeness rights for student-athletes and federal court decisions further impacted student-athletes’ rights.

The bill also would allow the Iowa state board of regents to fix athlete compensation in the same way it sets compensation for school presidents and other state employees.

The bill was introduced by Representative Bruce Hunter (D-Des Moines), the ranking member of the Iowa House Labor Committee.

If approved, the bill would apply to athletes at Iowa’s three public universities (University of Iowa, University of Northern Iowa, and Iowa State University), which all compete at the NCAA Division I level. None of the athletes at Iowa’s private institutions (12 of which compete across the NCAA’s three divisions) would be impacted and these student-athletes would not be considered employees of their schools under the terms of the bill.

The proposed Iowa legislation is consistent with the goals announced at the federal level by National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo in her September 28, 2021, memorandum.

She stated that, based on her interpretation of the National Labor Relations Act (NLRA), certain student-athletes are employees of their academic institutions.

She asserted that these student-athletes have been misclassified and that they should receive all the benefits and protections of employee status pursuant to the terms of the NLRA.

Although no student-athlete has been willing to initiate the process of asserting a violation of the NLRA that Abruzzo outlined in her memorandum, an unfair labor practice charge was filed against the NCAA by Michael Hsu, co-founder of the college basketball player advocacy group, the College Basketball Players Association. Hsu filed the unfair labor practice charge (Case No. 25-CA-286101) with Region 25 of the NLRB, in Indianapolis, accusing the NCAA of violating Sec. 8(a)(1) of the NLRA “by classifying college athletes as student-athletes.”

Hsu could file a charge even though he is neither a student-athlete nor the recognized representative of any student-athlete because 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). Hsu’s charge is being investigated and, if the charge is transitioned into a formal complaint, an administrative hearing will likely be held later this year.
In addition, Senator Chris Murphy (D-Conn.) and Senator Bernie Sanders (D-Vt.) have introduced the College Athlete Right to Organize Act to amend the NLRA. It would amend the definition of employee under Section 2 of the NLRA to include student-athletes and provide student-athletes collective bargaining rights, regardless of any existing state law restrictions. The legislation provides jurisdiction to the NLRB to exercise authority over all institutions of higher education within intercollegiate sports for collective bargaining and labor disputes.

Further, the Johnson v. NCAA litigation is pending in the Eastern District of Pennsylvania. In Johnson, collegiate athletes argue they were employees of their institutions and are entitled to proper wages under the Fair Labor Standards Act. The plaintiffs succeeded in overcoming their institution and NCAA’s attempts to dismiss their claims.

Finally, compensating college athletes has continued to gain momentum since the June 2021 U.S. Supreme Court decision in NCAA v. Alston and, in particular, Justice Brett Kavanaugh’s concurring opinion questioning the NCAA and member schools’ circular justification for not paying college athletes because colleges do not pay student-athletes. Shortly after Alston, the NCAA introduced a new policy allowing college athletes to be compensated for their name, image, and likeness.
Jackson Lewis’ Collegiate and Professional Sports Group will continue to monitor developments in the classification of college athletes as employees and the potential impact on college sports. Please feel free to reach out to any member of the Group with questions.

After a nearly four-year battle, delayed by COVID-19 and the untimely death of the initial arbitrator assigned to the case, former University of Connecticut men’s basketball head coach Kevin Ollie has been determined to have been improperly terminated and was awarded slightly more than $11.1 million. Replacement arbitrator Mark Irvings concluded that even though Ollie had a separate employment agreement, the University violated the terms of the collective bargaining agreement that covered Ollie’s employment.

The University of Connecticut Chapter of the American Association of University Professors (AAUP), the organization that represents coaches at the University, filed a grievance on Ollie’s behalf. The collective bargaining agreement contained certain relevant provisions in addition to the terms of Ollie’s individual employment agreement with the University.

While serving as the head coach, Ollie led his team to a 127-79 record over six years, including winning the national championship in 2014. However, Ollie lost credit for two seasons of his team’s victories after the NCAA determined he had violated a series of NCAA Bylaws by failing to promote compliance within his basketball program. The NCAA issued a three-year show cause order against Ollie, essentially prohibiting him from occupying the sidelines as a coach for this period.

In March 2018, based on the NCAA allegations but more than a year before the NCAA’s final determination that Bylaw violations had occurred, the University terminated Ollie “with cause” based upon the terms of his employment agreement.

The University believed it did not have to pay the remaining money owed on Ollie’s contract.

Arbitrator Irvings concluded the University could not limit its interpretation of Ollie’s alleged NCAA violations with regard to his employment agreement but the decision to terminate also had to satisfy the specific protections in the collective bargaining agreement that Ollie was also subject to in his coaching role for the University.

Although he was not a professor, the terms of Ollie’s employment contract guaranteed him the same personnel benefits as the unionized faculty members of AAUP.

In addition, Irvings challenged the University’s finding of alleged NCAA violations as a basis of just cause for the termination. Irvings stated, “UConn could not have based its discipline against Ollie on the NCAA findings because on March 10, 2018 (the date of Ollie’s termination), the NCAA proceeding was still in its investigatory stage.” He continued, “The NCAA did not proffer its Notice of Allegations until September 2018 and its decision was not issued until July 2019, about 16 months after the measuring date for the validity of UConn’s decision.”

The decision also stated that the NCAA proceedings are not relevant because the organization’s enforcement staff does not take testimony under oath and there is no cross-examination. “Cross-examination has long been recognized as an essential element of due process because it has the salutary effect of incentivizing witnesses to not make unsubstantiated or exaggerated claims.” Irvings further stated, “UConn’s dismissal of Kevin Ollie was predicated on an incomplete investigation, inadequate process, and ultimately a collection of unproven or minor, isolated infractions for which termination was far too severe a sanction.”

In response, the University stated that “it vigorously disagrees with the decision of the arbitrator and maintains without reservation that the decision to terminate Kevin Ollie when it did was the correct and appropriate decision.”

The University further stated it “could not continue to employ a head coach with the knowledge that he had violated NCAA rules that put student athletes, as well as the entire UConn athletics program, in jeopardy.”

The decision can be challenged by the University in federal court. However, the arbitration process is not constructed to encourage appeals of arbitrator decisions. Under federal law and most state laws, there are only a few, limited ways an arbitrator’s award can be challenged. Methods of challenge include a showing the award was a result of corruption or fraud or the arbitrator exhibited evident partiality or refused to consider evidence or otherwise displayed a complete disregard of the law.

Jackson Lewis’ Collegiate and Professional Sports Group will continue to monitor this case and potential developments. Please feel free to reach out to any member of the Group with questions.

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.