Student or employee?

In pep talks, football coaches like to say, “There is no ‘I’ in ‘team.’ ” No coach, however, ever intended for a team to bond in the way Northwestern University football players did — they could become the first unionized athletes in college sports.

In March, a regional office of the National Labor Relations Board ruled that Northwestern players could collectively bargain as university employees. At Northwestern’s request, the NLRB is reviewing the decision.

In Virginia, right-to-work laws, which permit employees to avoid joining a union, may limit potential effects of the Northwestern decision. Similarly limiting is the fact that the NLRB’s jurisdiction extends only to private employers and not to public institutions — or public schools. But Virginia legal experts are awaiting the final ruling — and likely future court challenges — with a mixture of bemused skepticism and nervousness. Meanwhile, the National Collegiate Athletic Association recently reached a $20 million settlement with current and former college football players for the use of their names and likenesses in video games.

(A number of Virginia state and private university athletic programs were contacted for comment but declined or did not return calls. Similarly, multiple calls and emails to the College Athletes Players Association, the organizing body that petitioned the NLRB on the Northwestern players’ behalf, went unreturned.)

Many sports and labor law experts tend to agree that the College Athletes Players Association will stick around to try again, regardless whether it succeeds in unionizing  Northwestern players.

“I read the [NLRB] regional director’s opinion and — I’m even a sports fan — and I had no idea the amount of control the university had over these players pretty much year ’round,” says Ann Hodges, a law professor at University of Richmond and an expert in employment and labor law. “You go here. You can do this. You can’t do this. You eat here. You wear this. There’s some NLRB precedent. The statute has a very broad definition of employee.”

In addition to her interest in labor law, Hodges happens to be a member of the Illinois bar. Because the university is based in Evans­ton, Ill., the Northwestern case eventually could end up in court in the Land of Lincoln should the players vote to unionize and then the university ignore an NLRB order allowing that union. Hodges believes such a reaction is highly likely.

The decision recognizing players as employees is “sort of unprecedented as they’re considered amateur athletes,” she says. “There are going to be some very interesting issues that come out of all that with the [National Collegiate Athletic Association, the governing body for college sports]. I don’t imagine this is going to end any time soon. Even if [players] win the election [formalizing the union], Northwestern is going to … try to get the issue into the courts.”

And for good reason. At stake potentially are tens of millions of dollars — often tied directly to the names or images of high-profile student athletes — that currently go straight into the purses of schools with big-name athletic programs.

2000 ruling on TCU player
Hodges may see the challenge to these players’ amateur status as new legal territory, but Vernon Inge, a partner with LeClairRyan who specializes in sports law, says there is a precedent.

Before 2000, the issue of whether scholarship football players were employees of universities was an open question, says Inge, an adjunct professor at the University of Richmond who also lectures on sports law in VCU’s sports business master’s program.

That’s the year a Texas Court of Appeals upheld a jury verdict finding that former Texas Christian University player Kent Waldrop was not eligible for workers’ compensation as a result of the paralyzing injury he suffered in a 1974 game.

Now, with the basic assumptions used in that ruling in question, “basically the implications are really, really big,” Inge says.

Noting, as Hodges does, the hours — often far in excess of 40 per week — Northwestern players spend on football, and considering that the sort of compensation they receive in the form of scholarships, Inge says, “really it’s kind of hard to say they’re not [employees].” If you look at the standard test for employees — direction for what to do from the college management, the coach — they get a pretty high degree of [compensation].”

And Inge questions the basis of the Texas court’s decision in the Waldrop case, which relied heavily on the hardly impartial NCAA’s justification for why scholarship players aren’t employees.

“The court basically said, ‘Well, the NCAA says they’re not employees, so they can’t be employees’ — they basically deferred to the NCAA,” he says, which is what makes the Northwestern case so interesting, since that deference seems no longer to hold sway.

“There’s lots of implications, and if [football players at Northwestern] can unionize, then they can unionize in Virginia — it just has a little bit different implication,” says Inge, who also believes the NLRB ruling could affect even public institutions. “It could definitely apply to a public school. If they’re employees of the school, they’d be employees of the school at University of Virginia or at whatever private school. It shouldn’t make a difference if it’s public or private.”

Limited effect?
On this point, again, legal experts disagree.

George Rutherglen, an employment law expert and professor at the University of Virginia School of Law, suggests the ruling not only won’t affect public schools or Virginia schools, but that its implications for private schools might also be limited once student athletes try to flex whatever newfound bargaining muscle they might gain from a favorable NLRB ruling.

First up is whether the Northwestern players even unionize, as the NLRB ruling says only they may, and no votes have yet been tallied. (The players voted in late April on forming a union, but the results of that election will not be disclosed unless the NLRB sides with the players.)

“I would be surprised … if the athletes voted to unionize after they realized they were effectively transforming their status from students into employees, but I’m surprised by many things,” Rutherglen says.

But, “suppose I’m wrong, and suppose they have a collective bargaining representative, and then they enter into negotiations with the university,” he says. “The university faces a lot of competition in the Big Ten [Conference], and I believe there is only one other private university in the Big 10 [affiliate member Johns Hopkins University for men’s lacrosse]. Public universities are not subject to the jurisdiction of the NLRB, so that Northwestern’s football team, if unionized, would be competing with [now 13] other nonunion teams in what is a very competitive sport. I don’t think the union can get much in the way of benefits from the university.”

The money factor
Aside from the effects the NLRB ruling could have on the field, there also is the effect it could have on a school’s revenue stream.

Virginia Commonwealth University, George Mason University and University of Richmond, all of which were contacted for this article, belong to the A-10 Conference, which in October 2012 signed a $40 million eight-year deal to televise basketball games. The 16 schools in the conference would split that take. The A-10 contract, however, is dwarfed by multibillion-dollar TV deals arranged by the Southeastern Conference and the Big Ten. USA Today estimates that each SEC school could receive nearly $34 million in the 2014-15 academic year.

In early June, a federal court trial began in California on an antitrust lawsuit against the NCAA seeking to win college players a share of money coming from television contracts.

On the day the trial began, the NCAA settled a separate suit for $20 million over the use of players’ likenesses and images in Electronic Arts video games.

With big dollar signs floating around the issue, it might at first blush seem only logical that college players should want a piece of the action. Rutherglen cautions, however, that getting their wish may not pay big the way those players might hope.

“The first reason is they will suffer some immediate costs in identifying themselves as employees, namely, all of the benefits they receive from the university in the form of payment of any kind will become taxable,” he says. “So instead of getting a tax-free scholarship, they’re going to end up with taxable wages. I believe the change in status from students to employees has a lot of adverse consequences for them.”

One consequence, he suggests, might be that universities, now potentially faced with spiraling pro-size salaries to recruit the best players, begin to weigh the costs and benefits of maintaining marquee sports programs at all.

“My speculation would be that if the players unionize, the football program at Northwestern would suffer in many ways — and the university might try then simply to close it down because it could simply no longer compete,” Rutherglen says.

He cites as an example the effect of unions on the U.S. textile industry, which eventually saw many manufacturers taking their operations overseas in search of lower labor costs. “I think it would make the major revenue-producing sports much less attractive to private universities. They’d have to make a decision right up front whether they were going to invest more money and deal with the players’ unions.”

But what also might happen, Hodges suggests, is that the ability to offer better benefits packages to unionized employee/players could make some private schools more attractive to the best players, making already powerhouse private schools (such as Duke in basketball) nearly unstoppable.

That is, she says, unless “the nonunion employers start paying the same benefits and wages in order to keep their people and to keep them from unionizing.” In the end, she suggests, “maybe you end up with something like Minor League Baseball.”

Whatever the long-term effect of the ruling might be on college sports, one thing seems certain, should the NLRB ruling stand. Even if the Northwestern players return a “no” vote on unionizing, says Inge, the issue is now in play, and it’s likely to be a long game with extra time on the clock.

“The union group that was formed will go straight to another university and start the process again,” Inge says. “And they have that ruling. Somewhere, athletes are going to unionize unless that ruling is changed.”