The NLRB’s Regional Director in Chicago issued a decision on March 26 in 13-RC-121359 finding the football players at Northwestern University are employees under the NLRA, over the objections of the University. The Regional Director rejected the University’s arguments that the players, who receive “grant-in-aid scholarships” from the University, are more akin to graduate students, held by the Board not to be employees in Brown University, 342 NLRB 483 (2004). The Director also rejected the University’s argument that the players were “temporary employees” who were not eligible for collective bargaining. 

Northwestern’s varsity football team consists of 112 players, 85 of whom receive scholarships that pay for their tuition, fees, room, board, and books in the amount of $61,000 per year ($76,000 per year if they take summer classes). The players receive a “tender” letter at the beginning of their football career that describes the terms and conditions of the offer; are subject to certain rules of conduct; and spend 20-25 hours a week in mandatory activities in the off-season, 40-50 hours per week during the season, and 50-60 hours per week during training camp. The Director found that the players performed “services” for the University that generated revenues of approximately $235 million during the nine-year period of 2003-2012 through the team’s participation in the NCAA Division I and Big Ten Conference through ticket sales, television contracts, merchandise sales, and licensing agreements.

The Director distinguished the graduate assistants who were deemed “not employees” in Brown by the amount of time the Brown students spent on educational studies as compared to work duties. Unlike graduate assistants who were deemed primarily students, the Board reasoned that the players spent more time on athletics “than many undisputed full-time employees work at their jobs” and those hours were more than the players spent on their academic studies. Also, unlike the football players, who did not receive any academic credit for playing football, the graduate assistants received academic credit for performing their duties, and for the substantial majority, those duties were a requirement for them to obtain their graduate degree. In other words, the graduate assistants’ relationship with the university was an academic one, whereas the players’ relationship was an economic one based on large scholarships. Third, Northwestern’s academic faculty members did not oversee the players’ athletic duties, which lessened any concern that allowing them to engage in collective bargaining would have a negative impact on educational decisions.   Critically, the Board also distinguished between general financial aid, which graduate assistants and fellows receive, and the players’ scholarships, which commentators have dubbed “pay-for-play.”

Although this decision affects only the Northwestern varsity football team, it is certain to have ramifications throughout private college athletics. Commenters have referred to this as a “blockbuster” decision that could change the face of college athletics. 

This decision adds to the existing uncertainty of students’ status as employees, given the Board’s decisions. The NLRB has vacillated on the question of whether graduate students, student research assistants, and graduate student teaching assistants who are paid a stipend and required to perform some teaching or research service to their university should be treated as employees. In 2010, the NLRB voted to reconsider its Brown decision, but the parties in the case reached a voluntary agreement in November 2013, and the union withdrew its petition, so Brown is still controlling law. There also has been much litigation regarding whether university faculty are not covered by the NLRA as “management.” And the state of Board law in the medical field concerning medical residents and interns is uncertain since these students also provide compensated services for hospitals. 

The parties have until April 9, 2014 to file a Request for Review of the decision with the Board in Washington, D.C. Northwestern said it would appeal the Regional Director’s ruling to the full NLRB in Washington.