Thursday, March 27, 2014

The wage-and-hour implications of the NLRB’s Northwestern football player ruling

By now you’ve likely heard that yesterday a regional director of the National Labor Relations Board ruled that Northwestern University’s scholarship athletes are “employees” of the university covered by, and entitled to organize under, the National Labor Relations Act. Labor Relations Today has one of the best summaries and analysis of the opinion I’ve read.

Before everyone starts forecasting the end of college athletics, we need to the remember that this opinion is only the opinion of one person. This case is far from over. Northwestern has already said that it will appeal to the full NLRB in Washington. No matter the result there, the losing party will appeal again to the 7th Circuit. Ultimately, the Supreme Court may weigh in. In other words, this case is years from a resolution. In the meantime, however, expect more petitions to be filed by other groups of athletes at other universities seeking to organize.

The implications of this story, however, go beyond labor unions and the NLRA. If student athletes are “employees” under the NLRA, it is not that much of a stretch for a court to conclude that they are also employees under other federal statutes, like the FLSA. If the FLSA covers college athletes, they are entitled to be paid at least the minimum wage, plus overtime for any hours worked more than 40 in a week. To calculate their regular rate of pay, one would prorate the value of their scholarships over the number of weeks “worked,” and then again by the number of hours worked in each week.

The universities will have arguments. Are their football programs exempt as seasonal? Are the student athletes exempt as creative professionals? These arguments, however, are a stretch. I believe there is a serious risk that if scholarship athletes are “employees” (and that remains a big if), then they are likely owed minimum wage and overtime. In other words, the Northwestern case has huge implications beyond collective bargaining.

This story will continue to evolve over the next many years, and I will keep you updated throughout its twists and turns.