Current Trends in Student Labor Organizing: Student-Athletes and Graduate Students

Current Trends in Student Labor Organizing: Student-Athletes and Graduate Students 24th Annual Legal Issues in Higher Education Conference October 13, 2014 Jeffrey L. Hirsch // jhirsch@hrwlawyers.com Hirsch Roberts Weinstein LLP 24 Federal Street, 12th Floor Boston, MA 02110

Agenda • Overview of NLRB • Student-Athlete Organizing • Graduate Student Update • Student Athletes and Challenged NCAA Rules on Revenue

Overview of Current NLRB Members Mark Gaston Pearce Chairman of the NLRB Appointed April 7, 2010 Nancy J. Schiffer Appointed August 2, 2013 Kent Y. Hirozawa Appointed August 5, 2013

Overview of Current NLRB Members Philip A. Miscimarra Appointed August 7, 2013 Harry I. Johnson, III Appointed August 12, 2013

Students or Employees? • “Students” or “Employees”? • NLRA § 2(3) “Employee” • Northwestern University – Case No. 13-RC-121359 • Labor Organization: College Athletes Players Association (CAPA) • Representation Petition filedwith NLRB Region 13 on January 28, 2014 • Petition sought to represent“All football players receivinggrant-in-aid athletic scholarshipfrom Northwestern University (See Exhibit 1.) • Approximately 85 individuals

Positions • Position of Petitioner: Football players receiving great-in-id scholarships are “employees” within meaning of NLRA Section 2(3) (See Exhibit 2.) • Position of Northwestern University, Football players are not “employees,” football players are akin to “graduate students” • NLRB’s Brown University, 342 NLRB 483 2004 decision, who were deemed not to be employees. (See Exhibit 3.) Alternatively, Northwestern contends that the players are only “temporary employees” not eligible for collective bargaining.

Background Facts • NU has about 8,400 undergraduate students • NCAA member • NU has 19 varsity sports rated as Division I, with about 500 students participating each year • NU Football program • Staff: Head Coach; Director of Football Operations, Director of Player Personnel, Directors of Player Development, 9 full-time Assistant. Coaches; 4 Graduate Assistant Coaches, 2 full-time video staff employees, 2 Administrative Assistants, various interns. • 112 players in total • 85 Scholarship players received football grant-in-aid scholarships that pay for tuition, fees room, board & books = $61,000 per year

Football Players Subject to Special Rules • Freshman and Sophomores – required to live on campus in dorms • Prior permission for outside employment • Required to disclose motor vehicle information • Required to comply with social media policy, restrictive postings on Twitter, Facebook, Instagram. • Prohibits player media interactions, without prior approval. • Prohibited from swearing in public • Subject to strict drug and alcohol testing by NU, NCAA and Big Ten

Football Players’ Time Commitment • August training camp • 6:30am-8:00am: Training room • 11:00am-12:00pm: Player walk through (scripts plays) • 12:00pm-1:00pm: Lunch • 1:00pm-4:00pm: Additional required meetings • 4:00pm-6:00pm: Additional required practice • 6:30pm-8:00pm: Team dinner • 8:00pm-10:00pm: Additional position and team meetings • 10:30pm: Lights out

Football Program Revenue (2003-2012) • NU Football program generated $235m in revenue and had total expenses of $159m • For 2012-2013 academic year revenue of $30.1m and total expenses of $21.7m • Profit from football is used to subsidize NU’s non-revenue generating sports

NLRB Regional Director’s Decision • Burden of Proof rests with the party seeking to exclude an otherwise eligible employee from the coverage of the Act • Therefore, NU has the burden of proof. • NLRB Regional Director’s Decision of March 26, 2014: Players receiving scholarships from NU are “employees” under §2(3) of NLRA Representation election ordered. (See Exhibit 4.) • Election held April 25, 2014 –ballots impounded by NLRB

NLRB Regional Director’s Decision • “Employee” - The applicable legal standard • §2(3) defines “employee” as any employee… U.S. Supreme Court has held that applying the broad definition requires consideration of the common law definition of employee NLRB v. Town & Country Electric, 516 U.S., 85, 94 (1995) common law: “an employee is a person who performs services for another under a contract of hire, subject to the others control or right to control, and in return for payment.”

NLRB Regional Director’s Decision • “As the record demonstrates, players receiving scholarships to perform football related services for the employer under a contract for hire in return for compensation are subject to the employers control and are therefore employees within the meaning of the Act.” • Perform services for the benefit of the employer for which the players receive compensation? • Football team generated gross revenue of $235m 2003-2012 • TV contracts • Ticket sales • Merchandise • Other benefits such as enhanced alumni giving • Perform services throughout the calendar year

NLRB Regional Director’s Decision • Scholarships are of economic value up to $76,000 per calendar year for 4-5 years (over $250,000). • No “paycheck” but substantial economic benefit received in exchange for playing football • Scholarship was presented in a “tender” requiring each play to sign seen as an employment contract • Head Coach has great discretion regarding reducing or cancelling a players scholarship

NLRB Regional Director’s Decision • Subject to the employer’s control in the performance of their duties as football player • Players are under strict and exacting control • From training camp- 50-60 hours/week • Location, duration and manner in which player’s carry out football duties are within control of football coaches • Coaches maintain control via NCAA and team rules • Potential loss of scholarship for violating rules is significant control • Scholarship players are “employees” “walk-on” players (non-scholarship) are NOT employees, they do not receive compensation for athletic services performed. • NOTE: Regional Director- if a “walk-on” were to receive a football scholarship at a later point, that player then would be deemed as “employee” • Brown University Not Applicable

Brown University Case • Brown University 342 NLRB 483 (2004) (See Exhibit 3.) established 4 factors in ruling that graduate assistants were not “employees”: • The status of graduate assistants as students; • The role of graduate assistants in graduate education; • The graduate assistants’ relationship with the faculty; • The financial support they receive to better Brown University.

Application of Brown University Case • In Brown University, Board concluded that the overall relationship between graduate assistants and the University was primarily “educational,” rather than “economic” • Regional Director found statutory test “inapplicable” since football players duties were unrelated to their academic studies • Compared to graduate assistants, whose teaching and research duties were “inextricably related to their graduate degree requirements” • Grant-in-aid scholarship players were not “primarily students” • Training camp 50-60 hour/week – 1 • 40-50 hours/week of football v. 20 hours attending class after training camp

NLRB Regional Director’s Decision • Grant-in-aid scholarship Program - “Athlete duties do not constitute ‘core element’ of the education degree requirements” • No academic credit received for playing football • Not required to play football in order to receive their undergraduate degree • Faculty members DO NOT supervise grant-in-aid scholarship players athletic duties • Academic faculty members do not oversee players athletic duties • Football coaches (who are not academic faculty) oversee the players athletic duties. • Grant-in-aid scholarships are not “financial aid” • Football scholarships are only offered to player in exchange for providing an athletic service to the University • Football scholarships can be immediately cancelled if a player withdraws from the team • Need based financial aid is not provided in exchange for any type of service

NLRB Regional Director’s Decision • Grant-in-aid scholarship players are not “temporary employees” under the Act • General NLRB Test: Does the individual have an uncertain tenure? • Indefinite tenure leads to eligibility to vote NLRB v. New EnglandLithographic 589 F. 2d 29 (1st Cir. 1978) • No substantial expectancy of continued employment with clear notice, leads to finding of temporary employee, not eligible to vote in NLRB representation election.

NLRB Regional Director’s Decision • Regional Director relied on NLRB decision in Boston Medical Center, 330 NLRB 152 (1999) to find the grant-in-aid scholarship players were not temporary employees • In Boston Medical Center, the Board found that the house officers (medical residents) worked for a finite period of 3-7 years of more. • Northwestern University scholarship players have a tenure of 4 or 5 years – not temporary employees • NLRB Regional Director Concluded Petitioned for Unit was “Appropriate Unit”

NLRB Regional Director’s Decision • Regional Director also relied on Specialty Healthcare and Rehabilitation Center of Mobile 35 NLRB No. 83, Slip pp. at 1 (2011) enfd.sub nom. Kindred Nursing Center East, LLC v. NLRB 727 F. 3d 552 (6thCir. 2013) • Overwhelming community of interest? • Scholarship players and walk-ons? • Note about Specialty Healthcare: NLRB held that petitioning unions have great discretion in seeking to identify and represent a bargaining unit. • Therefore, private sector employers in all industries face a difficult task opposing a union’s proposed bargaining unit

Northwestern University’s Position • NU contended the proposed bargaining unit was not “appropriate unit” since (1) scholarship players were not “employees” and (2) the proposed unit excluded “walk-ons” who shared on overwhelming community of interest with the scholarship players.

Northwestern University’s Position • Regional Director improperly placed burden of proof on Northwestern (Northwestern was not seeking to exclude from the Act’s coverage individuals otherwise determined to be eligible employees) • The threshold issue is whether the scholarship student-athletes are “otherwise eligible employees” • Football program is part of Northwestern’s educational experience. • Northwestern has 19 varsity athletic programs • Northwestern focuses on students’ ability to succeed academically • Scholarship offer is on award of financial aid, not an offer of employment • Commitment to education of student-athletes is exemplified by the wide range of academic services offered. • Players pursue over 20 majors • Maintain GPA over 3.00 • Graduate at a rate of 99%

Northwestern University’s Position • Northwestern contends that Regional Director ignored the significance of those facts • Those facts demonstrate that the relationship between Northwestern and its student-athlete is primarily educational not economic. • Northwestern’s position is consistent with Congress’s determination in enacting Title IX, that “the opportunity for students to participate in intercollegiate athletics is a vital component of educational development.” (See Exhibit 5.) Northwestern University brief to the Board on Review of Regional Directors Decisions and Director of Election, pp. 7-8, citing Mansourian v. Bd. Of Regents of Univ. of Calif. At Davis 816 F. Supp. 2d 869 (E.D. Cal. 2011)

Northwestern University’s Position • All Northwestern Students - not only scholarship student-athletes - are covered by conduct rules, including off-campus housing, hazing, gambling, drug and alcohol use, academic dishonesty, possession or use of weapons • Student run organizations- fraternities, sororities, affinity groups - student government -all must sign the “behavioral agreement” prior to being permitted to travel as a representative of Northwestern • Those rules do not create employment scholarship • Role of NCAA important to acknowledge • NCAA policies and rules apply to scholarship athletes and non-scholarship athletes alike • NCAA is an independent organization and Northwestern, like other institutions, is bound by NCAA rules

Northwestern University’s Position • Regional Director’s discussion of alleged “control” misunderstands the nature of inter-collegiate sports • Purpose of study hall is not to “control” student athletes’ lives • Study halls prepare student athletes for academic achievement and assist in the transaction from high school to college academics.

Northwestern University’s Position • Academic scheduling takes procedures over football scheduling • Football practice was moved to early mornings to minimize class schedule conflicts • Students with class schedule conflicts are allowed to leave practice early to attend class on time • Student-athletes spend at least 20 hours per week in class and additional time preparing and studying • The academic year is twice as on long as the football season

Northwestern University’s Position • Brown University (See Exhibit 3.) is controlling and should not be overruled NLRB v. Yeshiva University 444 U.S. 612 (1980) • For the proposition that institutions of higher education hold a unique position in American culture, and academic settings differ vastly from industrial settings in structure and purpose. • NLRB v. Yeshiva, supra at. 680-81 • Northwestern cited Yeshiva: “The predominant policy [of a university] normally is to operate a quality institution of higher learning that will accomplish broadly defined educational goals within the limits of its financial resources. The “business” of a university is education. (.) Id. at 688 (emphasis added)

Northwestern University’s Position • Universities have many educational programs or activities- intercollegiate athletics is only one such program. • “The opportunity for students to participate in intercollegiate athletics is a vital component of educational development” Mansourian, 816 F. Supp. 2d at 874 • Students are “admitted into” not “hired by” a university

Historical Reminder • NLRB first asserted jurisdiction over private, non-profit colleges and universities – Cornell University 183 NLRB 329 (1970) • Adelphi University, 195 NLRB 639 (1972) and The Leland Stanford Junior University • 214 NLRB 621 (1974) “the Board held that graduate teaching and research assistants were “primarily students” and not employees within the meaning of Section 2 (3) of the Act.

Historical Reminder • In New York University 332 NLRB 1205 (2000), the Board overruled 25 years of precedent and held that graduate assistants who were enrolled as students at NYU and performed research and teaching duties were “employees” • That holding prevailed from 2000-2004 • It took 4 years for the NLRB to reverse itself in Brown University.

Appeal to NLRB • See Exhibit 6 (CAPA Reply Brief) and Exhibit 7 (Northwestern Reply Brief) • NLRB invited amicus briefs • Over 20 amicus briefs received • Questions posed by NLRB: • What test of employee status under NLRA should be used? • Should the NLRB “adhere to, modify, or overrule” or even apply • Brown University

Selected Organizations FilingAmicus Briefs • National Collegiate Athletic Association (See Exhibit 8.) • American Council on Education and other High Education Associations (See Exhibit 9.) • Higher Education Council of the Employment Law Alliance (See Exhibit 10.) • National Right to Work Legal Defense and Education Foundation (See Exhibit 11.) • AFL-CIO (See Exhibit 12.) • Members of the United States Senate Committee on Health Education Labor and Pensions and the United States House of Representatives Committee on Education and the Workforce (See Exhibit 13.) • Major League Baseball Players’ Association, National Hockey Players’ Union, Major League Soccer Players’ Union, National Football Players’ Association, National Basketball Players’ Association (See Exhibit 10.)

Selected Organizations FilingAmicus Briefs • Brown University, Columbia University, Cornell University, Dartmouth College, Harvard University, University of Pennsylvania, Princeton University, Massachusetts Institute of Technology, Yale University, Associates of American Universities • National Association of Collegiate Directors of Athletics and Division 1A Athletic Directors Association • Baylor University, Rice University, Southern Methodist University, Stanford University, Tulane University, University of Southern California, Vanderbilt University, Wake Forest University • We await the NLRB’s decision.

Graduate Student Update • Recent Historical Overview: • New York University 332 NLRB 1205 (2000) held that graduate student assistants were “employees” eligible to organize • NYU and UAW negotiated one contract 2002-2005 • Brown University 342 NLRB 483 (2004) overruled NYU and returned to the “pre-NYU precedent” that graduate students were not employees, since their relationship with the institution was primarily educational, not economic. • Following Brown decision, NYU ceased bargaining

Graduate Student Update • Prior NLRB appointees have invited unions to bring cases to challenge the Brown University decision • New York University v. G.S.O.C./U.A.W. – NLRB Case No. 02-RC-023481 • NLRB remanded case to Region 2 Regional Director, October 25, 2010 356 NLRB No. 7 • Polytechnic Institute of New York University v. Internal Union, United Automobile Aerospace, and Agricultural implement Workers of America (U.A.W.) NLRB Case No. 29-RC-012054

Graduate Student Update • June 2012- NLRB invited briefs from interested parties on question of whether graduate student assistants may be statutory employees within the meaning of Section 2 (3) of the NLRB. • Numerous organizations filed amicus briefs – “the usual suspects…” • November 26, 2013 • NYU and UAW reached a voluntary agreement to hold an election among NYU and NYU-Poly graduate employees. Election to be supervised by the American Arbitration Association

Graduate Student Update • December 22, 2013 • American Arbitration Association announced results of supervised election among NYU graduate student employees • 98.4% of those who cast ballots voted in favor of union representation • 630 voted – 620 “yes” 10 “no” • Included 1,200 graduate student employees • NOTE: voter turnout is always a key factor • Once again, made NYU the only private university with unionized graduate student employees • Landscape in public colleges and universities is different • State Labor Laws govern

Student Employee Graduate UnionsAre More Common… • A few examples: • University of Connecticut • University of California • University of Massachusetts • And many more… • Predictions for private colleges and universities?

NCAA Rules Barring Student-Athletes from Receiving Revenue • Edward O’Bannon, et al. v. National Collegiate Athletic Association, Electronic Arts Inc.; and Collegiate Licensing Company, Docket No. C-09-3329 CW, August 8, 2014 (See Exhibit 15). • Current and former college student-athletes challenged the set of rules that ban student-athletes from receiving a share of the revenue that the NCAA and member schools earn from the sale of licenses to use the student-athletes’ names, images, and likenesses in videogames, live game telecasts, and other footage. • Student-Athletes’ Position: • The student-athletes contended that the rules violate the Sherman Antitrust Act

NCAA Rules Barring Student-Athletes from Receiving Revenue • NCAA Position: • NCAA denies any antitrust violations and claims that restrictions on student-athlete compensation are needed to uphold its educational mission and protect the popularity of collegiate sports • Background on NCAA • Founded in 1905 by presidents of 62 member colleges and universities • 2014- 1,100 member institutions • NCAA constitution: • Seeks to “initiate, stimulate and improve intercollegiate athletics programs for student-athletes and to promote and develop educational leadership, physical fitness, athletics excellence and athletics participation as a recreational pursuit” (NCAA Division I manual at 15)

NCAA Rules Barring Student-Athletes from Receiving Revenue • Division I membership requires schools to sponsor at least fourteen varsity sports teams, including football and to distribute a baseline amount of financial aid to student- athletes. • Approximately 350 of 1,100 NCAA member schools are in Division I • Electronic Arts Inc & Collegiate Licensing Company Electronic Arts Inc. (EA) is a corporation which develops and manufactures videogames. • EA created and sold an annual NCAA branded college football videogame each year between 1997-2013. • NCAA created and sold an annual NCAA branded college basketball videogame each year from 1998-2010.

NCAA Rules Barring Student-Athletes from Receiving Revenue • Professional athletes often sell group licenses to use their names, images, and likenesses in live game telecasts, videogames, game rebroadcast casts, advertisements and archival footage. • Student- athletes contend that they could also sell group licenses for use of their names, images and likenesses, except for NCAA rules. • NCAA entered into a 1994 licensing agreement with CBS granting rights to telecast the Division I men’s basketball tournament every year from 1995-2002. • Licensing agreement contained “name and likeness” provision.

NCAA Rules Barring Student-Athletes from Receiving Revenue • Network “had the right to make appropriate references to NCAA and universities and colleges of the teams, the sites, the games and the participants in and others identified with the games”. • Such contractual provisions are common and have economic value to television networks. • There is a market for group licenses

NCAA Rules Barring Student-Athletes from Receiving Revenue • District Court found “that, absent the challenged NCAA rules, teams of FBS football and Division I basketball players would be able to create and sell group licenses for the use of their names, images and likenesses in live game telecasts.” Slip Op. at 16. (See Exhibit 15.) • District Court also found that a “submarket” would exist for group licenses to use student-athletes names, images, and likenesses in videogames – if student-athletes were permitted to receive compensation for such licenses. • District Court concluded that NCAA rules violated antitrust law by agreeing with its member schools to restrain their ability to compensate Division I men’s basketball and FBS football players any more than the rules allow. • Court noted that these restraints and perceived inequities in college athletics and higher education in general, could be better addressed as a policy matter by reforms by NCAA, member schools, or Congress.

Predictions and Questions? • Jeffrey L. Hirsch // jhirsch@hrwlawyers.com • Hirsch Roberts Weinstein LLP • 24 Federal Street, 12th Floor • Boston, MA 02110

Current Trends in Student Labor Organizing: Student-Athletes and Graduate Students