Transcript The “Employee Free Choice Act”

Current Trends in Student
Labor Organizing:
Student-Athletes and Graduate Students
24th Annual Legal Issues in Higher Education Conference
October 13, 2014
Jeffrey L. Hirsch // [email protected]
Hirsch Roberts Weinstein LLP
24 Federal Street, 12th Floor
Boston, MA 02110
Agenda

Overview of NLRB

Student-Athlete Organizing

Graduate Student Update

Student Athletes and Challenged NCAA Rules on Revenue
2
Overview of Current NLRB Members
Mark Gaston Pearce
Chairman of the NLRB
Appointed April 7, 2010
Nancy J. Schiffer
Appointed August 2, 2013
Kent Y. Hirozawa
Appointed August 5, 2013
3
Overview of Current NLRB Members
Philip A. Miscimarra
Appointed August 7, 2013
Harry I. Johnson, III
Appointed August 12, 2013
4
Students or Employees?
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“Students” or “Employees”?
NLRA § 2(3) “Employee”
Northwestern University – Case No. 13-RC-121359
Labor Organization: College Athletes Players Association (CAPA)
Representation Petition filed
with NLRB Region 13 on
January 28, 2014
Petition sought to represent
“All football players receiving
grant-in-aid athletic scholarship
from Northwestern University
(See Exhibit 1.)

Approximately 85 individuals
5
Positions

Position of Petitioner: Football players receiving greatin-id scholarships are “employees” within meaning of
NLRA Section 2(3) (See Exhibit 2.)

Position of Northwestern University, Football players
are not “employees,” football players are akin to
“graduate students”

NLRB’s Brown University, 342 NLRB 483 2004
decision, who were deemed not to be employees. (See
Exhibit 3.) Alternatively, Northwestern contends that
the players are only “temporary employees” not eligible
for collective bargaining.
6
Background Facts
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NU has about 8,400 undergraduate students
NCAA member
NU has 19 varsity sports rated as Division I, with about 500 students
participating each year
NU Football program
Staff: Head Coach; Director of Football Operations, Director of Player
Personnel, Directors of Player Development, 9 full-time Assistant.
Coaches; 4 Graduate Assistant Coaches, 2 full-time video staff employees,
2 Administrative Assistants, various interns.
112 players in total
85 Scholarship players received football grant-in-aid scholarships that pay
for tuition, fees room, board & books = $61,000 per year
7
Football Players Subject
to Special Rules
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Freshman and Sophomores – required to
live on campus in dorms
Prior permission for outside employment
Required to disclose motor vehicle
information
Required to comply with social media
policy, restrictive postings on Twitter,
Facebook, Instagram.
Prohibits player media interactions,
without prior approval.
Prohibited from swearing in public
Subject to strict drug and alcohol testing by
NU, NCAA and Big Ten
8
Football Players’ Time Commitment
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August training camp
6:30am-8:00am: Training room
11:00am-12:00pm: Player walk through
(scripts plays)
12:00pm-1:00pm: Lunch
1:00pm-4:00pm: Additional required
meetings
4:00pm-6:00pm: Additional required
practice
6:30pm-8:00pm: Team dinner
8:00pm-10:00pm: Additional position
and team meetings
10:30pm: Lights out
9
Football Program Revenue (2003-2012)
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NU Football program generated $235m in revenue and had
total expenses of $159m
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For 2012-2013 academic year revenue of $30.1m and total expenses of
$21.7m
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Profit from football is
used to subsidize NU’s
non-revenue generating
sports
10
NLRB Regional Director’s Decision
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Burden of Proof rests with the party seeking to exclude an otherwise
eligible employee from the coverage of the Act
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Therefore, NU has the burden of proof.
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NLRB Regional Director’s Decision of March 26, 2014: Players receiving
scholarships from NU are “employees” under §2(3) of NLRA
Representation election ordered. (See Exhibit 4.)
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Election held April 25, 2014 –
ballots impounded by NLRB
11
NLRB Regional Director’s Decision
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“Employee” - The applicable legal
standard
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§2(3) defines “employee” as any
employee… U.S. Supreme Court has
held that applying the broad
definition requires consideration of
the common law definition of
employee NLRB v. Town & Country
Electric, 516 U.S., 85, 94 (1995)
common law: “an employee is a
person who performs services for
another under a contract of hire,
subject to the others control or right
to control, and in return for
payment.”
12
NLRB Regional Director’s Decision
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“As the record demonstrates, players receiving scholarships to perform
football related services for the employer under a contract for hire in return
for compensation are subject to the employers control and are therefore
employees within the meaning of the Act.”
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Perform services for the benefit of the employer for which the players
receive compensation?
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Football team generated gross revenue of $235m 2003-2012
TV contracts
Ticket sales
Merchandise
Other benefits such as enhanced alumni giving
Perform services throughout the calendar year
13
NLRB Regional Director’s Decision
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Scholarships are of economic value up to $76,000 per calendar
year for 4-5 years (over $250,000).
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No “paycheck” but substantial economic benefit received in
exchange for playing football
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Scholarship was presented in a “tender” requiring each play to
sign seen as an employment contract
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Head Coach has great discretion regarding reducing or
cancelling a players scholarship
14
NLRB Regional Director’s Decision
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Subject to the employer’s control in the performance of their duties as football
player
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Players are under strict and exacting control
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From training camp- 50-60 hours/week
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Location, duration and manner in which player’s carry out football duties are
within control of football coaches
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Coaches maintain control via NCAA and team rules
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Potential loss of scholarship for violating rules is significant control
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Scholarship players are “employees” “walk-on” players (non-scholarship) are
NOT employees, they do not receive compensation for athletic services
performed.
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NOTE: Regional Director- if a “walk-on” were to receive a football scholarship
at a later point, that player then would be deemed as “employee”
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Brown University Not Applicable
15
Brown University Case
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Brown University 342 NLRB 483 (2004) (See Exhibit 3.)
established 4 factors in ruling that graduate assistants were not
“employees”:
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The status of graduate assistants as students;
The role of graduate assistants in graduate education;
The graduate assistants’ relationship with the faculty;
The financial support they receive to better Brown University.
16
Application of
Brown University Case
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In Brown University, Board concluded that the overall relationship
between graduate assistants and the University was primarily
“educational,” rather than “economic”
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Regional Director found statutory test “inapplicable” since football
players duties were unrelated to their academic studies
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Compared to graduate assistants, whose teaching and research duties
were “inextricably related to their graduate degree requirements”
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Grant-in-aid scholarship players were not “primarily students”
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Training camp 50-60 hour/week – 1
40-50 hours/week of football v. 20 hours attending class after training
camp
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NLRB Regional Director’s Decision
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Grant-in-aid scholarship Program - “Athlete duties do not constitute ‘core
element’ of the education degree requirements”
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Faculty members DO NOT supervise grant-in-aid scholarship players
athletic duties
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No academic credit received for playing football
Not required to play football in order to receive their undergraduate degree
Academic faculty members do not oversee players athletic duties
Football coaches (who are not academic faculty) oversee the players athletic duties.
Grant-in-aid scholarships are not “financial aid”
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Football scholarships are only offered to player in exchange for providing an
athletic service to the University
Football scholarships can be immediately cancelled if a player withdraws from the
team
Need based financial aid is not provided in exchange for any type of service
18
NLRB Regional Director’s Decision
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Grant-in-aid scholarship players are not
“temporary employees” under the Act
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General NLRB Test: Does the
individual have an uncertain tenure?
Indefinite tenure leads to eligibility to
vote NLRB v. New England
Lithographic 589 F. 2d 29 (1st Cir.
1978)
No substantial expectancy of continued
employment with clear notice, leads to
finding of temporary employee, not
eligible to vote in NLRB representation
election.
19
NLRB Regional Director’s Decision
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Regional Director relied on NLRB decision in Boston Medical Center, 330
NLRB 152 (1999) to find the grant-in-aid scholarship players were not
temporary employees
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In Boston Medical Center, the Board found that the house officers (medical
residents) worked for a finite period of 3-7 years of more.
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Northwestern University scholarship players have a tenure of 4 or 5 years –
not temporary employees
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NLRB Regional Director Concluded Petitioned for Unit was “Appropriate
Unit”
20
NLRB Regional Director’s Decision
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Regional Director also relied on Specialty Healthcare and Rehabilitation
Center of Mobile 35 NLRB No. 83, Slip pp. at 1 (2011) enfd.sub nom.
Kindred Nursing Center East, LLC v. NLRB 727 F. 3d 552 (6th Cir. 2013)
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Overwhelming community of interest?
Scholarship players and walk-ons?
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Note about Specialty Healthcare: NLRB held that petitioning unions have
great discretion in seeking to identify and represent a bargaining unit.
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Therefore, private sector employers in all industries face a difficult task
opposing a union’s proposed bargaining unit
21
Northwestern University’s Position
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NU contended the proposed bargaining unit was not “appropriate unit”
since (1) scholarship players were not “employees” and (2) the proposed
unit excluded “walk-ons” who shared on overwhelming community of
interest with the scholarship players.
22
Northwestern University’s Position
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Regional Director improperly placed burden of proof on Northwestern
(Northwestern was not seeking to exclude from the Act’s coverage individuals
otherwise determined to be eligible employees)
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The threshold issue is whether the scholarship student-athletes are “otherwise
eligible employees”
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Football program is part of Northwestern’s educational experience.
Northwestern has 19 varsity athletic programs
Northwestern focuses on students’ ability to succeed academically
Scholarship offer is on award of financial aid, not an offer of employment
Commitment to education of student-athletes is exemplified by the wide range of
academic services offered.
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Players pursue over 20 majors
Maintain GPA over 3.00
Graduate at a rate of 99%
23
Northwestern University’s Position
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Northwestern contends that Regional Director ignored the significance of
those facts
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Those facts demonstrate that the relationship between Northwestern and its
student-athlete is primarily educational not economic.
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Northwestern’s position is consistent with Congress’s determination in
enacting Title IX, that “the opportunity for students to participate in
intercollegiate athletics is a vital component of educational development.”
(See Exhibit 5.) Northwestern University brief to the Board on Review of
Regional Directors Decisions and Director of Election, pp. 7-8, citing
Mansourian v. Bd. Of Regents of Univ. of Calif. At Davis 816 F. Supp. 2d
869 (E.D. Cal. 2011)
24
Northwestern University’s Position
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All Northwestern Students - not only scholarship studentathletes - are covered by conduct rules, including off-campus
housing, hazing, gambling, drug and alcohol use, academic
dishonesty, possession or use of weapons
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Student run organizations- fraternities, sororities, affinity groups
- student government - all must sign the “behavioral agreement”
prior to being permitted to travel as a representative of
Northwestern
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Those rules do not create employment scholarship
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Role of NCAA important to acknowledge
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NCAA policies and rules apply to scholarship athletes and nonscholarship athletes alike
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NCAA is an independent organization and Northwestern, like
other institutions, is bound by NCAA rules
25
Northwestern University’s Position
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Regional Director’s discussion of alleged “control” misunderstands the
nature of inter-collegiate sports
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Purpose of study hall is not to “control” student athletes’ lives
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Study halls prepare student athletes for academic achievement and assist in
the transaction from high school to college academics.
26
Northwestern University’s Position
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Academic scheduling takes procedures
over football scheduling
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Football practice was moved to early
mornings to minimize class schedule
conflicts
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Students with class schedule conflicts
are allowed to leave practice early to
attend class on time
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Student-athletes spend at least 20 hours
per week in class and additional time
preparing and studying
The academic year is twice as on long
as the football season
27
Northwestern University’s Position
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Brown University (See Exhibit 3.) is controlling and should not be overruled
NLRB v. Yeshiva University 444 U.S. 612 (1980)
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For the proposition that institutions of higher education hold a unique position
in American culture, and academic settings differ vastly from industrial settings
in structure and purpose.
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NLRB v. Yeshiva, supra at. 680-81
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Northwestern cited Yeshiva: “The predominant policy [of a university]
normally is to operate a quality institution of higher learning that will
accomplish broadly defined educational goals within the limits of its financial
resources. The “business” of a university is education. (.) Id. at 688 (emphasis
added)
28
Northwestern University’s Position
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Universities have many educational programs or activities- intercollegiate
athletics is only one such program.
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“The opportunity for students to participate in intercollegiate athletics is a
vital component of educational development” Mansourian, 816 F. Supp. 2d
at 874
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Students are “admitted into” not “hired by” a university
29
Historical Reminder
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NLRB first asserted jurisdiction over private, non-profit colleges and
universities – Cornell University 183 NLRB 329 (1970)
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Adelphi University, 195 NLRB 639 (1972) and The Leland Stanford Junior
University
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214 NLRB 621 (1974) “the Board held that graduate teaching and research
assistants were “primarily students” and not employees within the meaning
of Section 2 (3) of the Act.
30
Historical Reminder
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In New York University 332 NLRB 1205 (2000), the Board overruled 25
years of precedent and held that graduate assistants who were enrolled as
students at NYU and performed research and teaching duties were
“employees”
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That holding prevailed from 2000-2004
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It took 4 years for the NLRB to reverse itself in Brown University.
31
Appeal to NLRB
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See Exhibit 6 (CAPA Reply Brief) and Exhibit 7
(Northwestern Reply Brief)
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NLRB invited amicus briefs
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Over 20 amicus briefs received
Questions posed by NLRB:
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What test of employee status under NLRA
should be used?
Should the NLRB “adhere to,
modify, or overrule” or even apply
Brown University
32
Selected Organizations Filing
Amicus Briefs
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National Collegiate Athletic Association (See Exhibit 8.)
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American Council on Education and other High Education Associations (See Exhibit 9.)
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Higher Education Council of the Employment Law Alliance (See Exhibit 10.)
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National Right to Work Legal Defense and Education Foundation (See Exhibit 11.)
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AFL-CIO (See Exhibit 12.)
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Members of the United States Senate Committee on Health Education Labor and
Pensions and the United States House of Representatives Committee on Education and
the Workforce (See Exhibit 13.)
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Major League Baseball Players’ Association, National Hockey Players’ Union, Major
League Soccer Players’ Union, National Football Players’ Association, National
Basketball Players’ Association (See Exhibit 10.)
33
Selected Organizations Filing
Amicus Briefs
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Brown University, Columbia University, Cornell University, Dartmouth
College, Harvard University, University of Pennsylvania, Princeton University,
Massachusetts Institute of Technology, Yale University, Associates of American
Universities
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National Association of Collegiate Directors of Athletics and Division 1A
Athletic Directors Association
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Baylor University, Rice University, Southern Methodist University, Stanford
University, Tulane University, University of Southern California, Vanderbilt
University, Wake Forest University
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We await the NLRB’s decision.
34
Graduate Student Update
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Recent Historical Overview:
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New York University 332 NLRB 1205 (2000) held that graduate
student assistants were “employees” eligible to organize
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NYU and UAW negotiated one contract 2002-2005
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Brown University 342 NLRB 483 (2004) overruled NYU and returned
to the “pre-NYU precedent” that graduate students were not
employees, since their relationship with the institution was primarily
educational, not economic.
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Following Brown decision, NYU ceased bargaining
35
Graduate Student Update
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Prior NLRB appointees have invited unions to bring cases to challenge the
Brown University decision
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New York University v. G.S.O.C./U.A.W. – NLRB Case No. 02-RC023481
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NLRB remanded case to Region 2 Regional Director, October 25, 2010 356
NLRB No. 7
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Polytechnic Institute of New York University v. Internal Union, United
Automobile Aerospace, and Agricultural implement Workers of America
(U.A.W.) NLRB Case No. 29-RC-012054
36
Graduate Student Update
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June 2012- NLRB invited briefs from interested parties on
question of whether graduate student assistants may be
statutory employees within the meaning of Section 2 (3) of the
NLRB.
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Numerous organizations filed amicus briefs – “the usual suspects…”
November 26, 2013
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NYU and UAW reached a voluntary agreement to hold an election
among NYU and NYU-Poly graduate employees. Election to be
supervised by the American Arbitration Association
37
Graduate Student Update
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December 22, 2013
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American Arbitration Association announced results of supervised
election among NYU graduate student employees
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98.4% of those who cast ballots voted in favor of union representation
630 voted – 620 “yes” 10 “no”
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Included 1,200 graduate student employees
NOTE: voter turnout is always a key factor
Once again, made NYU the only private university with unionized
graduate student employees
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Landscape in public colleges and universities is different
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State Labor Laws govern
38
Student Employee Graduate Unions
Are More Common…
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A few examples:
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University of Connecticut
University of California
University of Massachusetts
And many more…
Predictions for private
colleges and universities?
39
NCAA Rules Barring StudentAthletes from Receiving Revenue

Edward O’Bannon, et al. v. National Collegiate Athletic
Association, Electronic Arts Inc.; and Collegiate Licensing
Company, Docket No. C-09-3329 CW, August 8, 2014 (See
Exhibit 15).
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Current and former college student-athletes challenged the set of rules
that ban student-athletes from receiving a share of the revenue that the
NCAA and member schools earn from the sale of licenses to use the
student-athletes’ names, images, and likenesses in videogames, live
game telecasts, and other footage.
Student-Athletes’ Position:
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The student-athletes contended that the rules violate the Sherman
Antitrust Act
40
NCAA Rules Barring StudentAthletes from Receiving Revenue
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NCAA Position:
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Background on NCAA
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NCAA denies any antitrust violations and claims that restrictions on studentathlete compensation are needed to uphold its educational mission and protect
the popularity of collegiate sports
Founded in 1905 by presidents of 62 member colleges and universities
2014- 1,100 member institutions
NCAA constitution:
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Seeks to “initiate, stimulate and improve intercollegiate athletics programs for
student-athletes and to promote and develop educational leadership, physical
fitness, athletics excellence and athletics participation as a recreational pursuit”
(NCAA Division I manual at 15)
41
NCAA Rules Barring StudentAthletes from Receiving Revenue
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Division I membership requires schools to sponsor at least fourteen varsity
sports teams, including football and to distribute a baseline amount of
financial aid to student- athletes.
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Approximately 350 of 1,100 NCAA member schools are in Division I
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Electronic Arts Inc & Collegiate Licensing Company Electronic Arts Inc.
(EA) is a corporation which develops and manufactures videogames.
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EA created and sold an annual NCAA branded college football videogame
each year between 1997-2013.
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NCAA created and sold an annual NCAA branded college basketball
videogame each year from 1998-2010.
42
NCAA Rules Barring StudentAthletes from Receiving Revenue
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Professional athletes often sell group licenses to use their names, images, and
likenesses in live game telecasts, videogames, game rebroadcast casts,
advertisements and archival footage.
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Student- athletes contend that they could also sell group licenses for use of
their names, images and likenesses, except for NCAA rules.
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NCAA entered into a 1994 licensing agreement with CBS granting rights to
telecast the Division I men’s basketball tournament every year from 19952002.
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Licensing agreement contained “name and likeness” provision.
43
NCAA Rules Barring StudentAthletes from Receiving Revenue
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Network “had the right to make appropriate references to NCAA and
universities and colleges of the teams, the sites, the games and the
participants in and others identified with the games”.
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Such contractual provisions are common and have economic value to
television networks.
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There is a market for group licenses
44
NCAA Rules Barring StudentAthletes from Receiving Revenue
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District Court found “that, absent the challenged NCAA rules, teams of FBS football
and Division I basketball players would be able to create and sell group licenses for the
use of their names, images and likenesses in live game telecasts.” Slip Op. at 16. (See
Exhibit 15.)

District Court also found that a “submarket” would exist for group licenses to use
student-athletes names, images, and likenesses in videogames – if student-athletes were
permitted to receive compensation for such licenses.

District Court concluded that NCAA rules violated antitrust law by agreeing with its
member schools to restrain their ability to compensate Division I men’s basketball and
FBS football players any more than the rules allow.

Court noted that these restraints and perceived inequities in college athletics and higher
education in general, could be better addressed as a policy matter by reforms by NCAA,
member schools, or Congress.
45
Predictions and Questions?
Jeffrey L. Hirsch // [email protected]
Hirsch Roberts Weinstein LLP
24 Federal Street, 12th Floor
Boston, MA 02110
46