Some student players are employees, NLRB says

The new general counsel of the National Labor Relations Board on Wednesday waded into the issue of paying student athletes, with a memo that said the agency intended to regard certain players as employees under the National Labor Relations Act.

"My intent in issuing this memo is to help educate the public, especially players at academic Institutions, colleges and universities, athletic conferences, and the NCAA, about the legal position that I will be taking regarding employee status and misclassification in appropriate cases," the board's top lawyer, Jennifer Abruzzo, said in a statement.

In a nine-page memo, Abruzzo avoided the term "student-athletes," calling it a term created to deprive players of workplace protections.

Under the new guidance, the board could prosecute universities that misclassify players as "student athletes" for violation of Section 7 of the National Labor Relations Act and of other federal labor laws. Section 7 guarantees employees the right to organize and engage in concerted activity.

The document came on the heels of a unanimous U.S. Supreme Court decision in litigation over whether players should be paid. Several college football and basketball players sued the National Collegiate Athletic Association for restricting noncash, education-related benefits that could be used as compensation for players at academic institutions.

The court rejected the NCAA's antitrust defense saying that the organization's strict rules against compensation for athletes violated antitrust laws.

Justice Brett Kavanaugh went further. He wrote in a concurring opinion that it is "highly questionable whether the NCAA and its member colleges can justify not paying student athletes a fair share of the revenues on the circular theory that the defining characteristic of college sports is that the colleges do not pay student athletes." National Collegiate Athletic Association v. Alston, 20-512 (U.S. June 21, 2021).

In a statement, the NCAA said about the NLRB memorandum that college athletes are students who compete against each other, "not employees who compete against other employees."

"NCAA member schools and conferences continue to make great strides in modernizing rules to benefit college athletes," the statement said. "Like other students on a college or university campus who receive scholarships, those who participate in college sports are students. Both academics and athletics are part of a total educational experience that is unique to the United States and vital to the holistic development of all who participate."

Wendy Musell, who represents workers at her own firm and is of counsel with Levy Vinick Burrell Hyams LLP, said that the memorandum increases the power of players to advocate for themselves.

"Student athletes could bargain to increase the compensation to them, or change other terms and conditions of their playing or their employment," Musell said. "That means they could be paid. It could mean they could require other safety policies and procedures to be put in place."

Frank N. Darras, a lawyer in Ontario who represents college and professional athletes, said with players having the backing of both the most powerful lawyer of the NLRB and nine Supreme Court justices, it's time for the NCAA to capitulate.

"The college athletes have borne the burden, and it's been on their shoulders for over 100 years, in a multibillion dollar operation. How come they've never had a voice?" Darras said.

Maurice Suh, a partner at Gibson Dunn & Crutcher LLP who filed a friend-of-the-court brief in the Supreme Court case, called the NLRB memorandum significant. Under the new classification, players could unionize and demand benefits, Suh said. He said he also expects more litigation.

"But the logic behind the memo is quite clear," Suh said. "And the position that the NLRB is going to take now is also quite clear. We would assume that well-advised schools and universities would adopt the same practices that they may have had for other employees that are covered by the National Labor Relations Act."

Harry I. Johnson III, partner at Morgan, Lewis & Bockius LLP, pointed out that Abruzzo is also exploring how public universities and their players would be affected by the memorandum. The NLRB does not have jurisdiction over public entities, but it might have jurisdiction over the athletic conferences those entities are in, Johnson said.

"Through that route, this theory, which is going to be prosecuted, could end up affecting every single student athlete, even the ones at public universities," Johnson said. "And that will mean if you're a public university and want to remain a member of whatever conference, you're going to have to comply."