Punting or Prudence: The NLRB Decision on Northwestern

On Monday, August 17, 2015, the National Labor Relations Board (NLRB) ruled against Northwestern football players on athletic scholarship, preventing them from forming a union. First, this decision was not what those wanting immediate gratification were looking for, as the Board did not rule as to whether or not they considered the student-athletes employees.[i] They continued to say that the decision would also not preclude them from hearing another case, or even the same case (Northwestern scholarship football players), at a later date. What the NLRB decided is that it would decline jurisdiction on the matter, for not furthering the goals of the National Labor Relations Act (NLRA). While no one’s questions have really been answered, the Board’s decision highlights the complexity of the issue at hand, and its reluctance to get involved in the realm of college sports.

The Confines of the Act

The National Labor Relations Act was enacted “to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices, which can harm the general welfare of workers, businesses and the U.S. economy.” Sections 2(2) and 2(3) define an employer and employee (determining who can be governed by the Act), but there is no need to go into that as the NLRB carefully declined to discuss the matter.[ii] It concluded that “asserting jurisdiction in this case would not serve to promote stability in labor relations.” The Board was hesitant to enter into the field of college athletics for a number of reasons, which can all generally be classified under this previous statement.

On the other side of the coin, one of the ultimate goals of the Act is the resolution of the problem of “depress[ed] wage rates and the purchasing power of wage earners in industry,”[iii] and “the widening gap between wages and profits,”[iv] thought to be the cause of economic decline and depression. Congress hoped to accomplish this by establishing procedures for more equitable private bargaining.[v] So the new question becomes, how does the Board balance a more equitable balance of power between labor and management versus the ideal of promoting stability in labor relations, which from time to time could be at odds? The most likely reason in this specific case, and a primary issue behind the NLRB declining jurisdiction, is dealing with the organization and structure of FBS college football.

Northwestern is the only private Big Ten school, and one of only seventeen private institutions out of 120+ at the FBS level. The NLRB here focuses in part on its inability to implement the same measures across all of the FBS, which could create an imbalance should one team have an advantage or other ramifications while others would not. Even if the Board attempted to enforce the status of scholarship football student-athletes as employees, it goes on to bring up the concern of state laws that could inhibit or slow implementation across the board. Ohio and Michigan have statutorily proclaimed that scholarship athletes of state institutions are not employees, while Wisconsin and North Carolina limit or prohibit collective bargaining among the public sector.

One comparison that the Board does make concerning professional sports is that for the sport to function, “there is no ‘product’ without direct interaction among the players and cooperation among the various teams.” Not only does the product not exist without other football teams, but like the professional leagues, there is a centralized body that makes rules across all of the competitors in the sport (the ever-so-popular NCAA, and to a lesser extent the Big 10). By solely applying a new set of obligations on one entity, the NLRB would still (at least indirectly) be affecting the rest of the field and altering the current “symbiotic relationship” between teams, conferences, and the NCAA. In the past, the Board has held off from making decisions that have affects outside of the bargaining units of employer/employee.[vi] These decisions reinforce one of the NLRB’s go-to conclusions that asserting jurisdiction in the case “would not effectuate the purposes of the Act.”

The NLRB additionally makes note of the current air of reform within college athletics, which is curious considering the lack of any certainty that “calls for reform” inspire. The board believes that Northwestern scholarship athletes are already experiencing improved terms and conditions from previous years (citing cost of attendance stipends, guaranteed multi-year scholarships, and the U.S. Senate hearing on college athletics). While this seems akin to a slippery slope fallacy (assuming that a call for reform will definitively lead to this reform as a reason to not decide on the matter) the Board basically hopes for the best with what this reform could bring about. Further, the Board assumes that allowing a vote would lead to instability in college sports (recruiting, NCAA rules, etc.), which also cannot definitively be said.

If the Precedent Doesn’t Fit, You Must Acquit…. Or At Least Have the Right to Decline Jurisdiction.

Another important distinction that the NLRB made is that this case is unique, not just among previous sports cases, but different from any cases the Board has heard to date. It recognizes that student-athletes aren’t strictly similar to any other students, athletes, or other athletically-incidental employees (e.g., referees or coaches). Not only does the group in question not fit precedent, the NLRB has never heard from a single unit (team/institution) that is part of a “leaguewide [sic] unit.” The NLRB makes a distinction between sports and other industry, as well as specifically distinguishing and isolating university life and the academic world from industry.[vii]

Nothing the Board has ruled on in the past is congruous with a student-athlete receiving an athletic scholarship, or the additional academic requirements they have to meet as a prerequisite for participation in athletics.  Differences between what professional athletes may do and student-athletes are prohibited from doing prevent the Board from applying any precedent involving professional sports leagues. Differences between what is asked and required of student-athletes as opposed to any other student workers prevent the Board from applying any precedent involving student employees.

One other interesting item that the Board mentioned is a minor disagreement with Regional Director Peter Ohr on the facts presented last year at the original hearing. The Board did not find that scholarship athletes faced heightened requirements described in testimony; however, since it did not analyze the statutory employee issue, this discrepancy did not need to be addressed. What this discrepancy helps to show is that the NLRB may have trouble distinguishing between responsibilities and compensation for scholarship vs. walk-on athletes, which might muddy the waters as to how they address who is and isn’t a statutory employee.

So What, If Anything, Just Happened?

So why doesn’t the NLRB just make a landmark decision on the status of scholarship student-athletes using derivative precedent? Apart from their repeated policy refraining from applying the NLRA to cases that would not effectuate the purposes of the Act, the cynic might say two of the NLRB judges are changing immediately after this ruling. Perhaps the Board didn’t want to leave this case on their legacy, or be responsible for a pivotal ruling when two of the members have one foot out the door. You could imagine their heads may not be completely in the game.

Another option would be to recognize the ever-present unwillingness of the American judicial and legislative systems to get involved in sports issues, college or professional. Following this decision, the NLRB was accused of punting on the obvious issue (just tell us if student-athletes are employees are not!) and taking the easy way out. One benefit of collective bargaining is that if something is an issue, it typically is addressed at the next round of negotiations, making it unnecessary for an outside entity (NLRB, judge, arbitrator, etc.) to get involved. While this ruling expressly kills the option of collective bargaining by preventing Northwestern scholarship football players from voting to form a union, the NLRB seems to be treating the NCAA’s current situation in the same fashion.[viii] If many of these issues are possibly being resolved by NCAA reform, the Board could be thinking - what need is there to step in, just let things happen that are going to happen.

So, does this decision mean anything? Not really. The decision has no real bearing on any future cases brought before the NLRB, whether it involves Northwestern football players or other student-athletes at other schools. The Board limited its holding to the the very small circumstances around the current status quo of Northwestern scholarship football players. CAPA President Ramogi Huma observed that this decision is not necessarily a loss, just a loss of time, delaying a potential college athletes’ union. At this point, the NLRB seems uncomfortable stretching precedent to fit an imperfect comparison, or applying the tenets of the NLRA to one isolated group when there is a much larger picture in focus. One thing that is certain, though, is that this will not be the end of an attempted college athletes’ union, just a bump in the road, and the next group to bring the case will have learned from Northwestern’s experience with the NLRB.

[i] They made several comments specifically reinforcing this point…over and over again.

[ii] The Board did address the fact, and even stated, that Northwestern is a statutory employer (footnote 5, pg. 2), but this is not wholly relevant without any analysis of the employee.

[iii] The denial by some employers of the right of employees to organize and the refusal by some employers to accept the procedure of collective bargaining lead to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce…The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries. Experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce…by restoring equality of bargaining power between employers and employees. Experience has further demonstrated that certain practices by some labor organizations, their officers, and members have the intent or the necessary effect of burdening or obstructing commerce…The elimination of such practices is a necessary condition to the assurance of the rights herein guaranteed. It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection. 29 U.S.C.A. § 151 (West).

[iv] Remarks of Senator Wagner in 1935.

[v] Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 754, 105 S. Ct. 2380, 2396-97, 85 L. Ed. 2d 728 (1985).

[vi] Footnote 6, pg. 3, citing a case where the decision would have indirectly and adversely affected certain aspects of foreign relations.

[vii] NLRB v. Yeshiva University, 444 U.S. 672, 681 (1980).

[viii] Remember, this case was not to certify an existing union, but just on whether to allow the vote based on whether they fit the statutory employee definition.