Will College Athletes Be Considered Employees?

Authored by Attorney Ruth Binger and with assistance from Haley E. Gassel, contributor

College athletes generate billions of dollars in revenue for their colleges and universities. As athletes are realizing their value to college sports, they have increasingly engaged in collective action and sued to be considered employees. A recent memorandum by General Counsel of the National Labor Relations Board (NLRB) puts this issue on the forefront, indicating that the NLRB is classifying college athletes at academic institutions as employees under the National Labor Relations Act (NLRA).

In National Collegiate Athletic Association v. Alston, the Supreme Court held that the NCAA’s restrictions on student athletes being compensated fell within antitrust scrutiny. The unanimous court ruled unanimously that the NCAA cannot prevent athletes from receiving education-related benefits, such as scholarships for graduate or vocational school, payments for academic tutoring, or paid post eligibility internships. The Supreme Court has recognized that college athletes are not amateurs, and they contribute to a profit-making enterprise. Additionally, in Johnson v. NCAA, a federal judge in Pennsylvania held that a group of student athletes plausibly alleged that they were employees of their colleges and universities and allowed their action against their colleges and universities under the Fair Labor Standards Act to proceed. Overall, courts are signaling a willingness to consider arguments that student athletes should be classified as employees.

On September 29, 2021, NLRB General Counsel Jennifer Abruzzo stated in GC memorandum 21-08 that players at private universities should be treated as employees under the National Labor Relations Act. She discussed the Northwestern University case decided by the NLRB in 2015. There, the NLRB declined to exercise jurisdiction, but nothing in that decision precluded a finding that scholarship football players at private colleges and universities are employees under the NLRA.

Abruzzo reasoned that athletes are employees under Section 2(3) of the NLRA as well as common law because student athletes are performing a service for the university that generates profit, student applications, and alumni donations; athletes receive significant compensation, covering tuition, fees, board, books, and/or an additional stipend; the NCAA controls the athletes’ terms and conditions of employment, such as setting maximum practice and competition hours, scholarship eligibility, minimum grade point average, limits on compensation, restrictions on receiving gifts and benefits, and ensuring compliance with its rules; and the university controls matters of the athletes’ work and daily lives to ensure compliance with these NCAA rules.

Abruzzo’s memorandum also opens the door for student athletes to unionize, since she stated that athletes at academic institutions should be protected by Section 7 of the NLRA when they engage in concerted activities to address their terms and conditions of employment. This would result in private universities being required to bargain with athletes’ unions over terms and conditions and benefits. Public universities may have unions. However, since they belong to the public sector, unions are generally limited in scope, e.g., they cannot perform collective bargaining or authorize a strike. The memorandum signals that there also may be a rise in worker misclassification claims.

The recent decisions by the Supreme Court and the Pennsylvania District Court, as well as the NLRB General Counsel’s memorandum, put the issue of whether college athletes are employees back into focus. Although many questions remain unanswered, watch for updates on the Johnson case, related suits, and further NLRB guidance as these developments continue. Athletics in both private and public colleges and universities could be drastically affected if the courts continue this trend.

Posted by Attorney Ruth Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, cybersecurity, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice. Gassel contributed to this post when she was a law clerk with Danna McKitrick.

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