Local labor law expert talks about Northwestern ruling

Local labor law expert talks about Northwestern ruling

March 28th, 2014 by Jay Greeson in Sports - College

With the recent decision by the regional director of the National Labor Relations Board in Chicago that Northwestern University football players are employees of the school, we asked local labor law expert Bill Trumpeter about some of the specifics of the decision.

Trumpeter works as an attorney at Miller & Martin and has represented management in labor matters for 38 years. He is licensed in Tennessee, Georgia and Ohio, is listed as a Rule 31 mediator by Tennessee Supreme Court and has been named in Best Lawyers in America for Labor and Employment Law every year since 1993.

Q. If the Northwestern football players are employees and their scholarship is viewed as their compensation, would that be taxable? And since they are now employees, whether they unionize or not, the employee tag does not change, right? And scholarships would still be taxable?

A. "The NLRB's determination about the Northwestern football players who receive athletic grant-in-aid scholarships would not impact on the Internal Revenue Code's treatment of athletic scholarships as taxable income. If the scholarships are to be treated as taxable income, Congress would have to amend the income tax code or regulations."

Q. This decision applies to private schools only, such as Northwestern, Vanderbilt and Duke. How does this affect state-run universities? And could athletes at state schools in Georgia, Tennessee and Alabama appeal to get recognized as employees?

A. "The National Labor Relations Act excludes public employees from coverage. Therefore, this decision impacts only private institutions such as Northwestern that award athletic scholarships. State schools are not subject to the NLRB's jurisdiction, and none of their employees can organize under the National Labor Relations Act.

"In Tennessee, there is no law allowing public university employees to organize. However, many states have statutes that allow public employees to organize and bargain. In such states, the Northwestern decision may prove to be persuasive, and a state labor board may elect to follow it and rule that public university football players may form unions."

Q. What will be considered in the appeal? What hurdles would unionization face in D.C.? How much political influence will be exerted?

A. "The biggest issue to be reviewed by the NLRB is whether an employment relationship exists between the university and its scholarship players. In a 2004 decision the NLRB ruled that graduate assistants at universities were not employees. The Chicago regional director's decision holds that the 2004 is simply not applicable because the football players' scholarships are based primarily on their athletic abilities, rather than their academic obligations. The biggest hurdle the union faces will be to overcome the large public perception that the players are not employees as that term is commonly understood.

"The NLRB is a highly politicized federal agency. President Obama has stacked the board with pro-labor members who have been quite active in expanding labor's organizational rights. The federal government, through the Department of Labor, has announced programs to expand the definition of employee in many circumstances. This decision would be right in line with the political goal of increasing employee coverage under the National Labor Relations Act."

Q. Assuming unionization passes, what would be the timeline to put it in place, would individual schools vote and be unionized as businesses are now or would there be a simultaneous, nationwide sweep in which all NCAA football programs become unionized?

A. "Assuming the NLRB upholds the regional director's decision, other private institutions would be subject to organizational efforts by athletes who receive athletic grant-in-aid scholarships. While a union could attempt to file simultaneous petitions at multiple schools across the country, each institution would be treated as a separate employer requiring individual elections.

"It could be years before the Northwestern case reaches a final conclusion. If the regional director's decision is upheld, an election will be conducted at Northwestern. If the union wins, the university will be directed to bargain in good faith. To test the NLRB's finding that the players are employees, the university would have to refuse to bargain, which, in turn, would trigger an unfair labor practice charge. The NLRB would find a violation and, at that point, the university could ask a U.S. Court of Appeals to review the NLRB's decision.

"If the decision is upheld, the last step would be to ask the U.S. Supreme Court for review. Simply working through the process could take several years."

Q. Since the athletes are now considered employees, what additional benefits would be considered and what does that mean? From Social Security to workman's comp to everything, this is a game-changer, right?

A. "As this is the first case to test the employment status of players, these issues are still open. The NLRB's treatment of players as employees does not mean that the IRS will tax them or that the states will require them to be covered by their unemployment or workers' compensation statutes. If they are employees, though, these and other questions will have to be looked at and answered."

Q. What was your first thought when you heard the news?

A. "My first thought was that this is crazy. Players sign on and know what they are getting into. It is not an employment relationship but an opportunity to get an education and to continue playing a sport they want to play, for a variety of reasons.

"This differs from my view that the NCAA should allow athletes to receive additional sources of benefits so that they can cover basic living expenses that might not be covered by their grants. And it is different from my view that athletes should have the right to transfer from school to school without sitting out in the event they do not like the program or if the coach that recruited them moves on to greener pastures."