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Last week, the National Labor Relations Board (NLRB) General Counsel, Jennifer Abruzzo, issued a memorandum providing guidance to all NLRB field offices on her position that certain Players at Academic Institutions are employees under the National Labor Relations Act (NLRA) and are afforded all statutory protections. 

In the memo, she advises that where appropriate, she will allege that misclassifying such employees as “student-athletes” and leading them to believe they are not entitled to the Act’s protections is a violation of Section 8(a)(1) of the Act.

Ms. Abruzzo stated that, “… certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment.”  She issued her memo 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.”

In light of the U.S. Supreme Court’s recent decision in NCAA v. Alston, that recognized that college sports is a profit-making enterprise and expanded permissible types of education-related compensation, one could surmise that Ms. Abruzzo’s memo is putting all colleges on notice that their treatment of Players at Academic Institutions will be placed under a microscope as colleges and universities and the NCAA adapt to the current movement. Players at Academic Institutions now may engage in far-reaching and lucrative business enterprises much more similar to professional athletes, who are employed by a team to play a sport, while simultaneously pursuing business ventures to capitalize on their fame and increase their income.

However, it should be noted that Ms. Abruzzo only guides the Department’s litigation efforts, it is still up to the NLRB to hold that student-athletes are employees, something they recently refused to do in case involving Northwestern University.

A closer look at Ms. Abruzzo’s position readily raises a pandora’s box of red herrings. For instance, if student-athletes are determined to be “employees” of the colleges and universities they attend under the NLRA, are those “employees” also now subject to the Fair Labor Standards Act and/or other state wage and hour laws, the American’s With Disabilities Act or other employment laws enforced by the EEOC and/or OSHA? Are these “employees” subject to worker’s compensation laws, are they entitled to employment benefits similar to other employees, such as health care for working in excess of 30 hours? Are these “employees” now subject to all of the college’s and/or university’s personnel rules for employees such as attendance, dress code, and/or social media policies, et al?  Does the college or university have to pay FICA or social security taxes for these “employees”?  Does the college or university have to pay a head tax on those “employees” in states or jurisdictions that still impose a head tax on the number of employees?  Can the college and/or university add noncompete language to its Letter of Intent, effectively prohibiting an athlete from transferring to another school?

These are just some of the issues that come into play when student-athletes are considered employees.  There is no reason to create such a potential nightmare of litigation in an effort to compensate student-athletes, for those that believe additional compensation is necessary, when they are already receiving a free education and can now be compensated for their names, images or likeness.

Allowing student-athletes to collectively bargain and receive the benefits of other employees sounds nice in today’s climate, but it creates more problems than it fixes, in reality. Institutions of higher learning and athletic conferences that have questions about how this development might affect their respective organizations can contact Johnson & Bell Shareholders Genevieve M. LeFevour and Christopher J. Carlos.