March Madness is a fitting time to focus on recent legal activity in the longstanding dispute over whether college athletes should be treated as employees. The latest development concerns the Dartmouth College men’s varsity basketball team’s right to unionize under the federal National Labor Relations Act (NLRA).
Dartmouth’s players, like all Ivy League athletes, receive no athletic scholarships. The basketball program costs Dartmouth more to run than it generates in revenue.
Nonetheless, on Feb. 5, National Labor Relations Board Regional Director Laura Sacks issued an unprecedented decision that Dartmouth basketball players were employees under the NLRA. The squad voted 13-2 March 5 to form a union.
Why Dartmouth players were allowed to unionize
The NLRB considers a worker an employee if the “employer” has the right to control the “employee’s” work and the work is performed in exchange for compensation.
Sacks concluded that of the team perform work that benefits Dartmouth, establishing an economic relationship. Even if unprofitable, the basketball program generates engagement and financial from alumni and interest from prospective students.
Sacks found that Dartmouth exercises control over the players. Dartmouth’s student-athlete handbook, like an employee handbook, details “the tasks athletes must complete and the regulations they may not break. … Dartmouth determines when the players will practice and play, as well as when they will review film, engage with alumni, or take part in other team-related activities.”
Sacks also found the players perform at least some “basketball-related activities” for the team in exchange for “a nontraditional form” of compensation. Prospective players receive an early review of their ission chances to the highly competitive school. “They also receive equipment and apparel — including basketball shoes valued in excess of $1000 per player per year — as well as tickets to games, lodging, meals” and access to a special “peak performance” program and other .
The U.S. House of Representatives responded by holding a committee hearing March 12 titled “Safeguarding Student-Athletes from NLRB Misclassification.”
Dartmouth has appealed Sacks’ decision to the NLRB. Dartmouth separately announced it would refuse to bargain with the basketball team. This ball could eventually wind up at the U.S. Supreme Court. (Sorry.)
Aztecs athletes don’t have right to unionize — for now
Even if Sacks’ decision ultimately is upheld and its reasoning applied nationwide, it would not affect SDSU athletes or those at other state-run institutions. The NLRA applies only to private employers, not public employers, such as state universities. The NLRB has recognized that state educational institutions are “subject to state labor laws governing public employees.”
California law explicitly makes student-athletes ineligible for workers’ compensation benefits, which California courts have construed to mean student-athletes have no rights under other California labor laws.
In 2019, the U.S. Court of Appeals for the Ninth Circuit rejected former University of Southern California football player Lamar Dawson’s claim that he was tly employed by the National Collegiate Athletic Association (NCAA) and Pac-12 Conference as well as USC for purposes of the federal Fair Labor Standards Act (FLSA), which governs the right to overtime pay. Under FLSA, said the court, “the economic reality of the relationship between the NCAA/Pac-12 does not reflect an employment relationship.” But the Ninth Circuit expressed no “opinion about student-athletes’ employment status in any other context.”
That matters because a case pending before an NLRB istrative law judge seeks to characterize the NCAA and Pac-12 as t employers, with USC, of the school’s student-athletes for purposes of the NLRA. Like USC, the NCAA and Pac-12 are private entities. But if the NCAA and its conference are found to be t employers of the school’s student-athletes under the NLRA, the ruling could extend to student-athletes at public schools such as SDSU and UCLA. That is because two of the student-athletes’ “employers” would be private entities subject to the NLRA.
Change is coming
The New York Times has written “at a time when college sports’ amateur model is buckling under the strain of antitrust lawsuits, unfair labor challenges and waning in Congress, it is unclear whether” the Dartmouth’s team vote to unionize “will be ed as a signature moment or a footnote.” Change is coming to the legal relationship between student-athletes and their schools in unpredictable ways.
Eaton is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers. He also is an instructor at the San Diego State University Fowler College of Business where he teaches classes in business ethics and employment law. He may be reached at [email protected].
