On August 17, 2015, one of the major sports law cases over the last two years came to a surprising close. The National Labor Relations Board (“NLRB” or “Board”) declined to exercise jurisdiction over the question of whether Northwestern University football players were employees of the university as defined by the National Labor Relations Act (“NLRA”). 29 U.S.C. § 152(3).
On March 26, 2014 NLRB Region 13 Director, Peter Sung Ohr, ruled that “all grant-in-aid scholarship players for the Employer’s football team who have not exhausted their playing eligibility are ’employees’ under Section 2(3) of the Act,” and directed a union election to be held. Region 13 Decision and Direction of Election, 23. Northwestern appealed Director Ohr’s ruling to the full Board, and the briefing and evidence submitted to the NLRB by Northwestern and the College Athletes Players Association (“CAPA”), the labor organization representing the players, largely focused on the question of whether the football players are, indeed, employees. Neither party even discussed the Board’s jurisdiction until Northwestern raised the issue as a two-paragraph alternative argument in its reply. Reply Brief, 23 (citing 29 U.S.C. § 164(c)(1)). Northwestern asserted, among other reasons, that the “relatively small number of private universities [that] are potentially impacted by the Board’s holding” was a reason that “the Board should decline to assert jurisdiction over private intercollegiate athletic programs.” Id.
The Board noted that “[t]he parties and amici have largely focused on whether the scholarship players in the petitioned-for unit are statutory employees.” Board Decision, 2. Nonetheless, the NLRB found the small percentage of private schools within National Collegiate Athletic Association (“NCAA”) Division I Football Bowl Subdivision (“FBS”) football as a persuasive reason to decline jurisdiction without reaching the question of whether the athletes are employees. The Board expressed concern over the fact that, “because of the . . . composition and structure of FBS football (in which the overwhelming majority of competitors are public colleges and universities over which the Board cannot assert jurisdiction), it would not promote stability in labor relations to assert jurisdiction in this case.” Id., 3. Private institutions comprise only 17 of the 125 FBS member schools, and, as the Board noted, “Northwestern is the only private school that is a member of the Big Ten, and thus the Board cannot assert jurisdiction over any of Northwestern’s primary competitors.” Id., 5. The Board termed this disparity “a situation without precedent because in all of our past cases involving professional sports, the Board was able to regulate all, or at least most, of the teams in the relevant league or association.” Id.
The Board’s opinion stated that it was declining to exercise jurisdiction only with respect to the Northwestern football players, and that the opinion did not “address what the Board’s approach might be to a petition for all FBS scholarship football players (or at least those at private colleges and universities).” Id., p. 6. Nonetheless, the Board’s concern about unequal treatment of athletes between schools within the same conference makes a future challenge very difficult. Every private institution that sponsors FBS football, with the exception of Brigham Young University, belongs to a conference that includes at least one public university. CAPA has the option to file suit in the U.S. District Court for the District of Columbia and argue that the NLRB’s decision was “made in excess of its powers.” Leedom v. Kyne, 358 U.S. 184, 185, 79 S.Ct. 180, 3 L.Ed.2d (1958) (citing 29 U.S.C. § 159(b)(1)). However, there has been no discussion that CAPA would do so, and as ESPN legal analyst Lester Munson noted, “[t]hat will be a very difficult argument to make considering the [B]oard expressly refused to exercise any jurisdiction.”
Thus, the issue of unionization among college athletes appears to be dead for the time being. However, with the historic ruling allowing NCAA schools to pay its athletes on appeal, and the minor league baseball wage-and-hour lawsuit still pending in the trial court, the intersection of sports and business litigation will continue to be in the news for the foreseeable future. The University of Notre Dame, while an independent in football, belongs to the Atlantic Coast Conference for other sports, of which 10 of the other 14 schools are public universities.