A National Labor Relations Board (NLRB) Regional Director ruled that Dartmouth's men's basketball players are employees under the National Labor Relations Act (NLRA) and have a right to unionize. The decision applies to private collegiate institutions and is the latest effort by NLRB to fold student athletes within the NLRA's protections.

Background

Last September, all 15 players on Dartmouth's men's basketball team signed and filed a petition for representation to join the Service Employees International Union (SEIU). On February 5, 2024, Region 1 Director Laura Sacks concluded that the student athletes were employees within the meaning of the NLRA. In doing so, the Regional Director directed an election for current members of Dartmouth's men's basketball team to decide whether they want to be represented by SEIU, Local 560. The NLRB granted Dartmouth an extension to request a review of the decision on Monday, February 12, 2024, moving the appeal deadline from February 20 to March 5—the same day the players are scheduled to vote.

Student Athletes Are Employees

The Regional Director observed that "employee" is defined broadly under the NLRA with exceptions that do not include student athletes. The Regional Director determined that the players are employees because Dartmouth "control[s] the work performed by the Dartmouth men's basketball team. And the players perform that work in exchange for compensation."

The Regional Director found that the student athletes performed "work" which benefited Dartmouth and generated revenue for the university through fundraising, ticket sales, alumni engagement, broadcast revenue and attention that drives student applications to the university. The Regional Director also pointed to the fact that the athletics department has its own business office to generate revenue and publicity from the various athletic programs.

According to the Regional Director, the university controlled the "work" performed because the university determined when the players practiced and played, reviewed film, engaged with alums, and when and where they traveled. Especially troubling for private academic institutions, even though Dartmouth, like all Ivy League universities, does not provide an athletic scholarship to student athletes, the Regional Director still concluded that the players received compensation. The Regional Director reached this finding based on fringe benefits students receive, access to facilities and programs, and financial aid. The Regional Director noted, for example, that the players were allowed to practice and attend games, received a $1000 per year stipend for shoes, and received extra tickets to games, lodging, meals, support and counseling services, and financial aid.

The NLRB's Full-Court Press on Collegiate Athletics

This decision is yet another play in the NLRB's years-long full-court press on the amateur model. In 2014, a different Regional Director ruled that scholarship recipient football players at Northwestern University were employees under the NLRA and thus eligible to unionize. Importantly, the Regional Director concluded that non-scholarship football players such as walk-ons were not employees because they did not receive compensation in the form of a scholarship for their participation in athletics. That is what makes the Dartmouth case all the more concerning—the Regional Director here relied mostly on fringe benefits and services the student athletes receive to support a finding that they were compensated. Importantly, none of the men's basketball players had NIL opportunities either to support any credible claim of compensation.

The Board ultimately declined to exercise jurisdiction in the Northwestern University case, determining that rendering a finding in that case would not promote labor stability. The Board observed that of the then approximately 125 colleges and universities that participated in the Football Bowl Subdivision (FBS), all but 17 were state-run institutions over which the Board could not assert jurisdiction. Moreover, Northwestern was the only private school at the time that competed in the Big 10. The Board punted on the issue on policy grounds, leaving the door open for another case to come before it to decide whether student athletes are employees. In September 2021, General Counsel Abruzzo issued GC Memo 21-08, which set the pathway for just that.

Abruzzo noted that academic institutions who misclassify student athletes run the risk of a Section 8(a)(1) unfair labor practice. Following the release of the memo, the NLRB issued a complaint against University of Southern California (USC), the Pac-12 Conference, and the National Collegiate Athletic Association alleging those entities, as joint employers, unlawfully misclassified scholarship athletes as student athletes instead of employees. That case is presently pending before an administrative law judge and also has the potential to forever change the landscape of collegiate sports if the judge finds that the student athletes were misclassified.

Takeaways

The Regional Director's decision is in keeping with the NLRB's calculated strategy to extend the right to unionize to collegiate athletes. Aided by the Supreme Court's decision in NCAA v. Alston, the NLRB is seizing on the moment to forever change the landscape of collegiate athletics. In short, if collegiate athletes are considered employees, they will have the right to unionize and engage in collective bargaining for salary and other benefits. A ruling in favor of the NLRB in the Dartmouth or USC case will lead to significant changes for academic institutions throughout the country and likely land a final blow to the amateur model that has existed for over 100 years.

While the decision applies to private collegiate institutions, private employers who utilize unpaid workers should likewise be concerned. Here, because the student athletes did not receive a scholarship, the Regional Director defined compensation broadly to include services the students received in the performance of their athletic duties, such as practice facilities, training and other tangential forms of support. This same reasoning could apply to services private employers in other industries provide to interns and other unpaid staff.