LEGAL ANALYSIS – NLRB REGIONAL DIRECTOR DETERMINES THAT DARTMOUTH’S MEN’S BASKETBALL PLAYERS ARE EMPLOYEES

By Christina Stylianou & Gregg Clifton of Lewis Brisbois

Late last year, the Dartmouth men’s basketball team filed a petition with Region 1 of the National Labor Relations Board (“NLRB”) seeking to become union members. The petition sought to allow the 15 members of the team, excluding managers and supervisors, to join and become members of the Service Employees International Union (“SEIU”), Local 560, based in Hanover, New Hampshire. Following a hearing spanning multiple days and the exchange of voluminous post-hearing briefs by both the petitioning union and by the university, the NLRB has now released its Decision and Direction of Election, through Regional Director for Region 1, Laura A. Sacks, finding that the members of the men’s basketball team are employees of the university under National Labor Relations Act § 2(3), and directing the athletes to vote on whether or not they wish to be represented by SEIU, Local 560, for the purposes of collective bargaining.

Regional Director Sacks’ decision that the athletes constitute employees pursuant to the National Labor Relations Act (the “Act”) was based in significant part on the university’s control over the athletes’ services, schedules, and autonomy, not just on campus, but off campus as well. She also highlighted that, even though the profitability and revenue generated by Dartmouth’s men’s basketball may be questionable or even negligible, profitability of a business is not a determining factor of employment status. In highlighting the services provided by the athletes and the benefit of those services to the university, she noted that the basketball program generates alumni engagement and donations, as well as publicity, student interest, and applications to attend the school as a result of these athletes. She also noted that major media outlets do not pay for the broadcast and distribution rights for most other extracurricular activities.

Notably, with respect to compensation, the Regional Director found that, although Dartmouth’s basketball players do not receive athletic scholarships, they still receive benefits tantamount to compensation. She asserted that they receive the benefits of an “early read” and consideration for admission prior to graduation from high school. She also concluded that they receive equipment and apparel (valued in excess of $1,000 per year per athlete). They receive tickets to games, lodging, and meals, among other benefits, as well as fringe benefits, like academic support, career development, sports and counseling psychology, sports nutrition, leadership and mental performance training, strength and conditioning training, sports medicine, and integrative health and wellness.

The Regional Director acknowledges that the athletes’ compensation is non-traditional, specifically because NCAA rules have historically prohibited traditional compensation. However, she highlights that the NLRB finds employment status where there is a “rudimentary economic relationship,” and that the appropriate test does not require payment to be traditional and does not consider the size of the compensation.

This decision from Regional Director Sacks is significant as it allows a group of college athletes the opportunity to potentially become union members and collectively bargain for the first time in the history of American college athletics. Moreover, if Regional Director Sacks was able to find that the non-scholarship members of the men’s basketball team are, in fact, compensated employees at Dartmouth, which does not offer athletic scholarships and does not enjoy the level of broadcast revenue and media attention that A4 schools do, her determination could certainly be expected to be used by other athletes currently classified as non-employee student-athletes in their efforts to also become employees of their universities and to seek the benefits of the Act, including the ability to organize and bargain collectively.

Pursuant to the decision, Dartmouth’s men’s basketball players can be expected to vote in due course in a NLRB conducted election as to whether they wish to be represented for purposes of collective bargaining by Local 560 of SEIU. At this early time in the NLRB process, it is worth noting, however, that the university may (and likely will) request a formal review of the decision, in which case the election process would be stayed pending the review.

In the interim, colleges and universities should be on notice that all members of their management teams, including coaches, assistant coaches and athletic administrators, must be educated on the basic rules of the Act, as the actions of these staff members can and will bind their schools and could potentially result in the filing of unfair labor practice charges. This could lead to serious legal consequences, including the issuance of a potential bargaining order, which could force their school to recognize and bargain with a union on behalf of their athletes without the holding of an election.