Looks like the NLRB objects to some time-honored language:
Today, National Labor Relations Board General Counsel Jennifer Abruzzo issued a memorandum to all Field offices providing updated guidance regarding her position that certain Players at Academic Institutions (sometimes referred to as student athletes), are employees under the National Labor Relations Act, and, as such, are afforded all statutory protections.
The memo further advises that, where appropriate, she will allege that misclassifying such employees as mere “student-athletes” and leading them to believe that they are not entitled to the Act’s protection has a chilling effect on Section 7 activity and is an independent violation of Section 8(a)(1) of the Act.
“Players at Academic Institutions perform services for institutions in return for compensation and subject to their control. Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment,” said General Counsel Abruzzo. “My intent in issuing this memo is to help educate the public, especially Players at Academic Institutions, colleges and universities, athletic conferences, and the NCAA, about the legal position that I will be taking regarding employee status and misclassification in appropriate cases.”
Recent developments bolster General Counsel Abruzzo’s position, including: the U.S. Supreme Court’s recent unanimous decision in NCAA v. Alston, that recognized that college sports is a profit-making enterprise…
Sounds like we’re about to hear a lot less “student-athlete” going forward. If you’re a college athlete, Alston is the gift that keeps on giving. Kudos to Messrs. Emmert and Remy for standing up on principle!
Get The Picture 
Whether folks like it or not college athletes do fit the definition of employees.
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I think the question now is whether the DoL treats them as employees and the IRS doesn’t.
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You are the tax expert, not me, so correct me if I am wrong, but my memory is that the IRS regulations define a scholarship as income but the IRS has elected not to collect taxes on the scholarship in the past.
I probably had it wrong. My amateur tax analysis is as bad as the armature lawyer’s legal analysis I read a lot.
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CPA for me means “Couldn’t Pass Again.” 😉
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Since they are employees what is to prevent one of UGA’s employees from giving their two week notice and going to Auburn? None of them have contracts with non-compete clauses. If the NCAA or SEC tries to stop them due to old student athlete provisions around limiting transfers the employees should sue for illegal employment restrictions.
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Whenever the topic of blocking transfers comes up, I like to remind people that schools never had the ability to stop an athlete from transferring to the school of their choice. What they did was deny them the ability to receive financial aid from the school of their choice (for one year, if I recall correctly).
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Nothing prevents a player from transferring once to any team that will accept him. He doesn’t have to give 2 weeks notice.
That has been the rule for a couple of years. The NLRB had nothing to do with that rule.
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So they’ll be immediately eligible to work for Auburn? If not why not?
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I heard on the Chuck Oliver Show (take that fof what it is worth) about a player who entered the portal after the season started and transferred to another college and played.
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I’m not in anyway disagreeing with her statement I do have a serious question. I’m in agreement with her statement just to be clear.
Is the system set up so the person in her position has the legal authority on her own to make such ground breaking decisions?
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Yes she basically has ruled that as the laws are written these are employees and as such covered by the Department of Labor rules.
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So if I understand your point if whoever replaces her they have the authority to reverse the decision?
I’m trying to understand how a single person not a judge has that much power to affect on their own this sweeping change.
I just don’t remember the NLRB being a single person decision machine. Even when I agree with the results.
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Yes and no (don’t you hate that answer?)
There are statutes that essentially set forth the process for changing agency rule making authority. That process has to involve findings of fact to warrant the change. A new president cannot just appoint new agency heads and the new agency heads say, “Starting today my agency is going to reverse course 180 degrees.” Because the public has relied upon the agency’s policy interpretations there is a process in place to enable input into whether a change is needed and what it should be.
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Thank you for clearing the muddy water.
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I believe the supreme court has stated they will give deference to the NLRB’s interpretation of employee unless completely unreasonable.
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And here’s the damn problem in a nutshell.
Ms. Abruzzo is an UNELECTED bureaucrat. The fact that her opinion in this matter now carries the force of law behind it is asinine. She answers to ZERO citizens; she faces no consequences from her decision at the ballot box.
Her political bent caries no weight in my belief here; this decision needs to be codified in legislation passed by Congress. At least federal judges go through the confirmation process; near as I can tell, she does not.
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You’re preaching to the choir my man.
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This is simply the Biden administration reversing course on the Trump administration’s NLRB position. The NLRB is controlled by the political party in power. In 2015 the NLRB dismissed the Northwestern case regarding whether or not student athletes were employees. The NLRB’s regional director had said that Northwestern football players were employees and could unionize so the case went before the board. The NLRB avoided the question saying that a decision wouldn’t stabilize labor relations. A decision that they were employees would have given them federal protections to unionize. The Trump administration’s NLRB withdrew the position that private school student athletes were employees.
Today’s memo from Abruzzo does nothing to public universities. Public universities don’t fall under the realm of the NLRB. Don’t be surprised if, however, the NLRB prosecutes a case against a private institution like Duke, Vandy, Northwestern, Stanford, etc. where Abruzzo feels that the university misclassifies football players as student athletes instead of employees.
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Thanks for this info. Great stuff.
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Agree, with the caveat in my post of 12:17 pm
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Yeah, my post about how government agency policy was controlled by the party in charge was on the simplistic side, but agency policy is definitely driven by who is appointing the head of such agency (for example, the NLRB now has Democrats as the majority of its members). The NLRB regional director under Obama that said that Northwestern football players were employees is now the assistant or deputy general counsel to Abruzzo.
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Milton, I guess my comment is more about whether the commissioner of the IRS decides to pile on an bring the same perspective to affect both public and private colleges now that the DoL has weighed in. Tax withholding/FICA/1099 reporting (I’m betting the IRS would deem players to be independent contractors) … fun stuff.
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“Compensation” can be very broadly defined in the Tax Code. I can see the IRS looking at reclassifying how a scholarship is valued when provided under the terms of employment. More work for the CPAs and tax attorneys ahead.
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Yep. I’m not a proponent of pay for play, but this decision is a big deal. Now the question is whether Big College Sports can get in front of this.
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It is a big deal for just private universities at the moment. It doesn’t affect public universities.
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Why not public unis?
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The NLRB doesn’t have jurisdiction over certain employers. The employers in that category are the federal government, state governments (including public schools), Federal Reserve banks, and a few others that a governed by other labor laws.
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Thanks, miltondawg, for explaining that. I hope you have reduced the hysteria.
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The assumption is the athletes are employees of the university versus the Athletic association.
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Really getting to the point where colleges need to teach, become institutions of higher learning, and get rid of sports. If the pro’s want a minor league, let them build one. No more paying crazy dollars to Mickey, Coaches, the NCAA.
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This is where I think it is going to ultimately end up. Colleges will have intramural sports and some club sports but they will get out of the big time sports space altogether. I can’t see colleges, the actual colleges not the athletic associations that run the big time sports, wanting to be involved with what the courts and the govt are going to turn college athletics into. Schools do not make money off of athletics for the most part. In fact, only 25 out of 65 P5 schools had a net positive cash flow in 2019. None of the other 64 FBS programs made any profit, all lost money. All 125 FCS schools lost money as did all of the 97 D1 schools that do not have football teams. Not one D2 or D3 program showed a profit on athletics. Out of approximately 1100 schools with athletic programs, only the 25 P5 programs that showed a profit took in more money, from all sports revenue sources, than they spent.
College sports aren’t the windfall producing machine many people think they are and if the courts and govt make them too much of a pain in the ass for the schools, the schools will simply get rid of them. Maybe this is how it should be?
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I am not arguing the merits of your post but I am arguing the practicality of your post.
1. The NFL has no desire to create a minor league. It isnt going to create one to compete with college football.
2. The big time college football schools derive a lot of money from football.
Alabama, for example, has increased significantly its out of state student population since Saban arrived. Alabama attributes that in significant part to
its profile as a football power. Football increases donor interest.
Even at smaller schools football creates an additional number of tuition paying students just on the football team that may not have attended without football.
I do not see a reason why the D-1 schools will voluntarily give up sports. I know the Ivies did, but their endowments are in the billions of dollars per school. The additional income from sports are just couch change for them. Not so for the public universities in D-1.
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Not arguing with you but I’ll address your two points.
If the colleges, by and large, get out of the “NFL minor league” business, the NFL may not have a choice. Whether it wants to or not, it has to have some lower level of play for players to develop and a minor league would be the only way to do that. The NFL would not be competing with college football, they would be completely taking the place of college football.
You are correct about the “big time” programs, those are the 25 that are profitable and I doubt all of them are realizing the increases in out of state enrollment Alabama and Clemson and the like are enjoying right now. I seriously doubt the additional revenue from tuition at smaller schools who are losing millions every year on athletics is making up for the athletic losses. If most schools decide to walk away from athletics over the “athletes are employees” issue, picking a school because it has a football team will become a non issue since very few schools would still have one.
I think the actual schools (again, not the athletic associations that are making very good money) view athletics as a somewhat necessary expense/loss leader to help make the student experience better. I think colleges will continue to do things like they do now as long as things stand like they do today regarding the status of athletes. If the rules/laws change and those student athletes are suddenly university employees with workman’s compensation premiums to be paid, payroll, matching SSI and Medicare taxes to be paid, HR issues to deal with, group insurance issues, etc. on top of the expenses and losses incurred now, I think the schools will view athletics much differently than they do now.
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Having dealt with the Wage and Hour Division in my prior life I can attest to the fact that they have laws and regulations that make the IRS seem like nice guys. She has just sat the table for one hell of a Wage and Hour law suit, hell Morgan and Morgan just had a moment and are smoking cigars. They can’t get them all (colleges) but they do have a built in top 25 to go after. The neat think (LOL) is the “student-athletes” will get most of the money. If as has been stated the schools just wanted to avoid workers compensation claims, they have piss the bed. The way the W&H guys get you to agree is they tell you that if they have to take you to court that “treble damages” will be sought. Does the term treble damages ring a bell. That’s RICO stuff 3 times the amount of the audit results. Lord have mercy on the Universities when those auditors get there because Wage and Hour won’t.
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If the universities now say their college education is the compensation, do they have a case? I’m genuinely interested because I don’t know the law here. All of this would imply that the government is backing the college sports industry into a corner where the athletes become subject to taxation.
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Seems to me that the NLRB is saying that the scholarships provided to student-athletes…oops! Sorry, NLRB!…employees do count as compensation.
From the memo: “Players at Academic Institutions perform services for institutions in return for compensation and subject to their control.”
I guess room and board also count as compensation.
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When I was in grad school at UGA 35 years ago, the school paid me a stipend (taxed) and waived my tuition (untaxed). Halfway through grad school, the IRS (or the school, or both) changed their policy and started taxing the free tuition, so the school upped the stipend to help.
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I want to see athletes fairly compensated. But I’m a little leery of courts modifying the law under the guise of interpretation, and even more leery of half clever bureaucratic lawyers modifying the law. On the other hand, good luck getting Congress to discharge its legislative responsibilities.
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https://twitter.com/MankatoWilder/status/1442891149635588105
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And what is that about?
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BOOM!
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Well that’s going to leave a mark! Nice going Mark Emmert! If you were competent, you would have told your bosses that they better evolve or watch their business model burn to the ground.
This going to be one hell of a bureaucratic nightmare for the schools. It’s also one heck of a mental leap for fans to get used to saying we hired our players. That said, I do agree that the level of profit, level of commitment required of the players, and level of risk imposed on their health makes it feel a lot like a job. The players should have the ability to organize IMO–especially since the S-A term was created to avoid worker’s comp claims.
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I couldn’t have passed it once!
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This was intended to reply to eethomas’s post of 1:09 pm
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Never give ee a pass 😉
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What happens now, when a player is injured while playing or practicing? Can he sue his school for violating safety protocols?
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If they actually violated protocols, then, yeah, I would imagine they have a case. That said, you would actually have to prove that they violated protocol. You couldn’t sue them merely because you got hurt. Of course, I’m not a lawyer, so what do I know?
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OSHA is formulating rules as we speak, and will start on campus visits next August. I would love to see an OSHA inspector try to get into a closed practice in Tuscaloosa.
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Oh, I imagine a nice friendly court order from a US Federal Judge could accomplish that. Nick Saban would end up just like George C. Wallace standing in front of the schoolhouse door.
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I guess it is one more thing the government will screw up.
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“I’m from the government and I’m here to help” has closed many businesses.
Remember that the NCAA has not lost its control over rules of competition nor the schools control over admissions.
The teams already have dozens of employees running around the facilities, so safety and work environment, rules, etc. already exist.
The gray area where the game, education and employment areas intersect (think Venn diagram) for the players is where this is going to get messy and create full employment for the attorneys and court system.
Can CFB survive? 100%
Will it survive? 50/50
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Maybe I’m missing something, but once they are classified as employees won’t the conferences and what remains / becomes of the NCAA almost certainly have an anti-trust exemption on all direct compensation fronts ? You need a whole treatise on the intersection of labor and antitrust but I know there are several avenues, including non-statutory “rule of reason” (i think) routes.
If this sticks won’t they essentially be allowed to collude to not pay them much more than they are now ?
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In other words, won’t many of the antitrust roadblocks in Alston not be applicable ? Of course, this also could mean a world where in 2030 the head coach at Alabama makes a mere $1million and a G5 school makes $500k.
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What antitrust exemption? Congress hasn’t granted one. Neither has the Supreme Court.
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There is a judicially created anti-trust exemption that i believe the NFL relies on.
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And MLB had one, too. So what? CFB doesn’t have one, which is why Emmert and Company have been groveling long and hard with Congress to get one.
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Aren’t we talking about two different things (ER/EE vs the issue of limiting grants in aid under scholarships and NIL) ? How does the NFL get around antitrust problems ? I believe they get around it the second the employees organize and make a demand and perhaps that doesn’t even have to formally happen (hence all the jockeying over whether the NFLPA’s decert of its union matters).
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The NFL gets around it with a CBA and labor law superseding antitrust. That’s why I’ve suggested for a while that the NCAA’s best course of action to gain some control over this would be to cut a deal with Congress to get the exemption by promising it would allow college athletes to unionize and bargain. Not that they’re listening to me. 😉
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Ok, so it’s a statutorily created “conflict of laws” supersedment ? I always thought the NFLs was judicially created “rule of reason” arena stuff ? (i made a C in labor relations and stay far away from it)
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Yeah. If you notice, every once in a while the NFLPA threatens not to renew the CBA so that the NFL risks losing its antitrust protection.
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Your post relies upon your assumption of facts. You assume colleges can’t afford sports and sports, specifically football, is a drain.
You do not know those colleges’ revenues and expenses and neither do I.
What I do know is is that the following colleges in Georgia studied the economic advantages and costs of having football and found that football is an economic benefit and started football programs in the last 30 years, and kept them.
Georgia Southern
Georgia State
West Georgia
Valdosta State
Shorter College
LaGrange College
Berry College
Reinhardt College
Shorter College
Point University
Kennesaw State
Mercer University
Georgia Military College
All 13 of those schools decided that, contrary to your assumption, that a football program can increase revenues to the college. I used to be on the Board of Trustees of one of those colleges and at the time the college was convinced that football improved the net operating revenues of the college.
Since 1990 the number of Georgia colleges that, to my knowledge, discontinued football because it was a financial drain:
Middle Georgia Junior College.
Paine College, Morehouse University, Morehouse University, Albany State, Savannah State, and Clark College kept existing football teams active
Shit, if football is good for LaGrange College’s bottom line then I have a hard time believing Georgia State and Georgia Southern are not benefiting financially from football.
Georgia Southern and Georgia State wanted desperately to move up to FBS to cash in. Mercer wants to move up to FBS. There must be some benefit.
In basketball and other sports Savannah State and Mercer compete in D-1 for the money.
Maybe you are correct and sports are a drain on colleges. If that I’d the case a bunch of Georgia colleges don’t know what they are doing financially.
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Response is to jcdawg83’s post atv3:44pm
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