The National Labor Relations Board (“NLRB”) regional director Peter Sung Ohr recently ruled that a group of Northwestern University football players on scholarship are properly classified as employees of the university and thereby have rights to unionize and engage in collective bargaining.
The NLRB relied upon the common law definition of an employee and was not dissuaded by the lack of taxable income:
“an employee is a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment….The fact that the Employer does not treat these scholarships or stipends as taxable income is not dispositive of whether it is compensation.”
It is not hard to see how college athletes receiving scholarships/stipends could fall within these guidelines. The NLRB cited the factors that led to its ruling, including the contract (i.e. offer letter and Letter of Intent, compensation structure (i.e. the scholarships), the regimented time devoted to football (40-60 hours per week), and other indications of overall control exerted by the school and the coaches (such as requiring approval for outside employment, housing, social media, etc.). As a result, the NLRB found that the players were not “primarily students” and the compensation was not financial aid. This related article contains more information regarding the fight over employee classification and the economics of collegiate sports.