- Tom McMillen, President & CEO, LEAD1 Association (Moderator)
- Jonathan L. Israel, Partner, Foley & Lardner LLP
- Michael R. Phillips, Partner, McGuireWoods LLP
The Supreme Court Alston decision and increased pressure from states on the current college sports model has shifted the body politic on the student-athlete compensation issue. The next wave of pressure on the college sports enterprise could be with regard to the employment status of student-athletes, whether through judicial, administrative, or legislative means. The potential for college athletes to obtain collective bargaining rights could lead to student-athletes being classified as employees, revenue sharing, and other major ramifications for college sports. In that light, on Wednesday, LEAD1 Association (“LEAD1”) hosted its latest virtual forum, moderated by LEAD1 President and CEO, former Congressman, Tom McMillen, and featured prominent sports employment and labor attorneys Michael Phillips, Partner at McGuire Woods, and Jonathan Israel, Partner at Foley & Lardner. Here are some of the main takeaways from the webinar:
- While Alston has opened the door for more attacks on student-athlete compensation, employment rights are not necessarily “imminent” through judicial means. Since Alston, the most notable court case on student-athlete employment rights has been the Ralph “Trey” Johnson et. al v. NCAA case in U.S. District Court, in which the student-athlete plaintiff’s claim recently survived a motion to dismiss challenging the employment status of student-athletes under the Fair Labor Standards Act (FLSA). But like name, image, and likeness (NIL), it could take years for any court case, particularly under the FLSA, to arise to employment rights for student-athletes.
- Employment rights may sooner come from administrative means, such as the National Labor Relations Board (NLRB). In 2015, the NLRB declined jurisdiction in the Northwestern case to classify Northwestern football players as employees. But Phillips made the point that the NLRB Northwestern decision did not necessarily close the door on the NLRB ruling on this issue, as precedent is not always binding on the NLRB and the NLRB is very much a political body, currently controlled by Democrats.
- Employment rights could also come through legislative means via federal and/or state bills, some of which could pass sooner than later. In fact, the state of New York has introduced a collective bargaining bill, and the state of California, has introduced a revenue sharing bill. Likewise, Senator Murphy’s (D-CT) congressional bill would also allow for revenue sharing. Some federal NIL bills, however, explicitly state that college athletes would not be considered “employees.” These bills, both at the federal and state level, stem from the growing public perception that college athletes are not being treated fairly, underscored by Justice Kavanaugh’s concurring opinion in Alston.
- But, despite public perception, collective bargaining and employment rights are a lot more complicated than most realize, both from a college sports enterprise and student-athlete perspective. McMillen explained that employment status may include social security and Medicare deductions, federal, state, and unemployment taxes, worker’s compensation insurance, inevitably termination rights, and full taxability on income. Both Phillips and Israel agreed that college athletes do not necessarily fit “neatly” within the definition of “employee” or “independent contractor, and employment and labor laws vary from state to state. In addition, according to some experts, Title IX could certainly be implicated under revenue sharing, and any attempted circumvention of Title IX in federal or state legislative proposals could be subject to legal challenges. It is also a reality that adding employment rights could make academic success more untenable, further complicating student-athletes’ already loaded plates with athletics, academics, and NIL.
From a college sports enterprise perspective, grand-in-aid scholarships could be eliminated for major revenue sports, philanthropy, student-fees, and institutional support could disappear depending upon those less likely to support full commercial enterprises, and non-revenue sports may be cut, impacting our Olympic efforts, most Olympians of whom are former college athletes. In other words, many great functions of college sports could be compromised for the mere purpose of delivering extra cash to student-athletes, through collective bargaining. According to Israel, other specific issues associated with employment rights, like increased health and safety benefits, could possibly be addressed without unions, such as through federal legislation.
- College sports can, however, act to possibly undercut some of its perception issues associated with college athlete compensation, including: (1) Continuing to further address the student-athlete “package” of benefits like supporting college athletes’ monetization of NIL rights; (2) preserving the academic integrity of college athletics, including institutional educational values, even despite “amateurism” being struck down by the Supreme Court; and (3) proactively implementing these above strategies and further describing the unintended consequences of college athlete employment rights, explained above, to policymakers.