Employer Labor Relations Blog

Will the NLRB Tackle the NCAA?

Posted in Bargaining Unit, Collective Bargaining, Current Events, Organizing, Representation Cases

By: Bradford L. Livingston, Esq.

In previous posts about possible unionization by Northwestern University’s scholarship football players, I likened the National Labor Relations Board (“NLRB”) to referees who had committed a false start penalty and showed how the union’s game wasn’t just against Northwestern. This time – in a gridiron battle of acronyms worthy of UCLA v. USC or UM v. OSU – we’ll consider whether, rather than refereeing it, the NLRB intends to insert itself into the game against the NCAA.

After all, attacking the NCAA is the du jour socially-relevant thing to do. The O’Bannon case over college player royalties is set to go to trial in June, new antitrust lawsuits have been filed against the NCAA by several college athletes, and the social and political debate over disparities in wealth and income is increasing in volume. So perhaps the NLRB sees an opportunity to pile on.

In their December 2007 dissent in Register Guard, 351 NLRB 1110, NLRB Members Wilma Liebman and Dennis Walsh – then the pro-union Democratic minority on the Board – called the NLRB the “Rip Van Winkle of administrative agencies.” That was then; this is now. Awake from its slumber and with union advocates now in the majority, the NLRB is like a caffeine-crazed college freshman pulling an all-nighter before an exam to frantically make up for lost time. In an environment where only about 6% of private sector workers are represented by a labor organization, the NLRB (with or without a lawful quorum and its initiatives enjoined by the courts) has been busily helping organized labor. Among both obvious and more subtle examples, just consider its court-quashed “Employee NLRA Rights” posting requirement, its now-revived quickie election rulemaking initiative, its many decisions finding illegal both unionized and non-union employer handbook, social media and other policies (e.g., loyalty, confidentiality, class action waivers, and disparagement). So if the NLRB has decided to reassert its relevancy by entering the game against the NCAA, what plays will it call?

First Down: Give the Union a Bargaining Unit it Can Win

Northwestern’s players are set to vote in a secret ballot NLRB election on April 25, although the ballots will likely be impounded until after the NLRB reviews its Regional Director’s decision that college football players are employees. But no matter how that vote eventually turns out, the game is far from over. The NLRB has given organized labor a new page for its playbook: alternative potential bargaining units.

Unions are strategic in deciding what groups to organize; they understandably file election petitions for groups of workers where they think they’ll win. And with the NLRB’s decision in Specialty Healthcare, 357 NLRB No. 83 (2011), the NLRB has given unions a significant advantage in seeking winnable, so-called “micro” bargaining units. As described in Section 9 of the NLRA, union elections have always been held regarding an appropriate bargaining unit, not the most appropriate bargaining unit. This distinction is critical: where a proposed unit is appropriate under Specialty Healthcare, an employer can only challenge the union’s choice if it meets a very high burden in proving that a different  unit shares an “overwhelming community of interest” with those the union seeks to represent. So while the new Steelworkers-supported college athletes’ union, CAPA, called the play for a bargaining unit comprised of all Northwestern’s football players (and the NLRB’s regional Director approved a unit of all football scholarship recipients who had not exhausted their eligibility), CAPA could just as easily have audibled.

Because CAPA or any other union can file a petition for any unit it is able to organize, why not a unit of only a college football team’s offense, offensive line, or just its quarterbacks? After all, unlike punters and placekickers (who may share their own community of interests but are often not receiving a scholarship), the QBs – who have a separate quarterbacks coach (in NLRA terms, a Section 2(11) “supervisor”), study a different playbook, etc. – will all invariably be on scholarship and share their own community of interests. And why limit organizing to scholarship athletes; why not any college student with a scholarship who receives “pay for play?” When the games are broadcast, instead of focusing TV cameras on freshmen in the bleachers holding up signs saying “Mom and Dad: Send $$$,” wait until they pan outside the stadium to show the striking marching band flute section, whose picket signs proclaim “No Toot Without Loot.” If, as they must, the NLRB’s rules on small bargaining units apply to scholarship athletes as employees, a union will inevitably succeed in organizing some “appropriate” unit.

Second Down: The NCAA as the Athlete’s Employer

No matter whether first down results in big yardage or no gain with Northwestern, the NLRB may be diagramming a second down play in which it takes on not just the 17 private colleges and universities that play major college football, but all of them. To do so, it may conclude that the NCAA is a “joint employer” with any individual college’s scholarship athletes. The NLRB has long held that an organization can be an entirely separate entity, but a joint employer for NLRA purposes if they both codetermine or “take part in determining the essential terms and conditions” of employment of a group of employees. EMI Music, Inc., 311 NLRB 997 (1993). Companies that regularly use labor from staffing agencies, mechanical or janitorial contractors, and other providers understand the risks of joint employment status under the NLRA and often take active steps to minimize their active control over the others’ employees. It is no stretch to argue that the NCAA’s incredibly detailed rules on transfers among teams, eligibility requirements, hours of practice, and everything else determine essential terms and conditions of their participation in the sport – or “employment” to the NLRB. Once a union gains any yardage with its first down play and succeeds in organizing Northwestern (or any other “appropriate” bargaining unit of scholarship athletes among the private colleges and universities that play by NCAA rules), the NCAA as a joint employer – like the primary college employer itself – must recognize and bargain with that unit.

Third Down: The NCAA’s Bargaining Obligation

The NLRB’s call on second down sets up an easy decision for its next play. Once the NCAA is found to be a joint employer, its detailed rules almost certainly must go by the wayside. An employer’s obligation to bargain under NLRA Section 8(a)(5) will supersede any argument that “those have always been our rules” or “that’s what we do at all our other non-union facilities” (such as the public colleges and universities over which the NLRB has no jurisdiction). Simply put, if a union organizes any group of scholarship athletes, the university’s and NCAA’s obligation to bargain in good faith will leave any mandatory subject of bargaining (“wages, hours and other terms and conditions of employment”), which includes the NCAA rulebook, open for negotiation.

Fourth Down: Non-Union Employees are Covered by the NLRA

One of the great things about fourth down is that, no matter the field position or how many yards a team has to go, it can still score a touchdown. And this could be the NLRB’s trick play: that all employees are protected by and have NLRA Section 7 rights. So just consider for a moment the many recent NLRB decisions deeming illegal various employer policies, ranging from regulating online social media posts, to prohibitions against damaging the employer or its reputation, to communications with the media, and other forms of “NLRA protected” communication. In his decision, the NLRB’s Regional Director specifically relied on the following to claim that college football players are employees:

The players must also abide by a social media policy, which restricts what they can post on the internet, including Twitter, Facebook, and Instagram. In fact, the players are prohibited from denying a coach’s “friend” request and the former’s posting are monitored. The Employer prohibits players from giving media interviews unless they are directed to participate in interviews that are arranged by the Athletic Department. Players are prohibited from swearing in public, and if a player “embarrasses” the team, he can be suspended….

In every other “employment” context, recent NLRB decisions have consistently considered policies like these (and their application in disciplining an employee) a violation of employees’ NLRA Section 7 rights. Let’s see what happens when the first college scholarship athlete (take any scholarship athlete at any private college or university) files an unfair labor practice charge with the NLRB. After all, and as the NLRB has made explicitly clear over the last several years, these Section 7 rights apply to all employees, including those who do not belong to a union. Note to college and NCAA as a joint employer: the remedy for an unlawful employment policy invariably includes rescission of the policy (there goes the NCAA rulebook). Even if a union never succeeds in organizing a single college athlete, TOUCHDOWN, NLRB!

Time Out:  

So let’s take a break in the action:  This has nothing to do with whether college athletes are somehow exploited, should be paid for playing, or deserve royalties for television or other use of their likenesses. Other litigation is pending, and the rising tide of public opinion undoubtedly will transform college sports. (In fact, just yesterday the NCAA relaxed its limits on feeding college athletes.) This is merely a labor law commentary about using the NLRA as a vehicle to prompt this social change. College sports will almost certainly be different and no matter what view you may have about the merits of compensating college athletes, the question here is whether or not the NLRB should be playing the game. And, as explained here and in my earlier posts – no matter what down it is – the NLRB should punt.

REJECTED: Fifth Circuit Denies NLRB’s Petition for Rehearing En Banc in D.R. Horton

Posted in Concerted Activity, Current Events, NLRB

By:  Ronald J. Kramer, Esq.

Earlier today, April 16, 2014, the Fifth Circuit Court of Appeals denied the NLRB’s petition for rehearing en banc in D.R. Horton v. NLRB, No. 12-60031 (5th Cir. Dec. 3, 2013).  D.R. Horton is the decision in which the Fifth Circuit reversed the NLRB’s determination (357 NLRB No. 184) that employers could not enter into employment agreements in which employees waived their right to engage in class action lawsuits.  The Court treated the Board’s petition both as a petition for a panel rehearing and as a petition for rehearing en banc.  Both petitions were denied.  If the Board wishes to continue to contest this decision, its next step will be to file a petition for certiorari to the U.S. Supreme Court.

While some may expect the Board to petition the Supreme Court, it may decide to pass for now.  The Fifth Circuit’s decision is only the law of D.R. Horton. Technically it is not binding as to other pending Board cases on this issue.  Absent a Supreme Court ruling, the Board and its administrative law judges have expressed their willingness to apply the Board’s original  D.R. Horton decision.  The Board may wish to try its luck in front of another Circuit Court to obtain a more favorable ruling and a circuit split before it petitions the Supreme Court.  NLRB, it’s your move.

Complaint Issues Against UFCW for Unlawful Coercion of Wal-Mart Employees

Posted in Current Events, NLRB, Unfair Labor Practices

By: Bryan R. Bienias

Yet another unfair labor practice complaint has been issued stemming from the rash of protests in late 2012 by union-backed groups such as OURWalmart at a number of Wal-Mart locations across the country.

On Thursday, April 3rd, the regional director for Region 7 out of Detroit, Michigan issued the complaint, alleging that the United Food and Commercial Workers union violated Section 8(b)(1)(A) of the NLRA by restraining and coercing Wal-Mart employees during a 2012 Black Friday protest at a store in Dearborn, Michigan.

According to the complaint, during the hectic kickoff to the 2012 holiday shopping season, an organizing director for UFCW Local 876 and an Occupy Detroit activist, along with 50 to 80 other individuals stormed the store’s electronics department and remained for roughly 20 minutes without the retailer’s permission, apparently not to browse the store’s door-busting deals.

The protestors allegedly blocked the entrance and exit to the electronics department, interfering with the work of Wal-Mart employees who were on-duty.

During the excitement, a group of approximately seven women and one man decided to take a “bathroom break” of sorts in the women’s rest room, where they allegedly interrogated another employee regarding her wages, hours, and working conditions.

These sorts of tactics have been par for the course for these groups. State courts have also taken heed, with at least two judges in Arkansas and California issuing preliminary injunctions against UFCW and OURWalmart following the groups’ activities in and around Wal-Mart stores.

This most recent complaint also follows on the heels of another consolidated complaint issued in January 2014 against Wal-Mart for alleged unfair labor practices against more than 60 employees, 19 of whom were discharged following the November 2012 protests. This time, however, the UFCW is on the defensive.

As groups such as OURWalmart and Fight for 15 continue their activities against retailers and fast food locations across the nation, employers can take some solace in the idea that certain regional directors and judges may not view the groups’ tactics as without limitation, particularly where they border on harassment of other employees and brazenly interfere with their work duties.

A hearing on the NLRB complaint is scheduled to take before an ALJ on June 12.

College Football Unions: What Game Is Being Played?

Posted in Bargaining Unit, Collective Bargaining, Current Events, Organizing, Representation Cases

By: Bradford L. Livingston, Esq.

After last week’s post “College Football Unions: Throw the Flag for a False Start,” several readers asked what might happen if the NLRB is eventually upheld in finding that Northwestern University’s scholarship football players are “employees” under Section 2(3) of the National Labor Relations Act and therefore able to unionize. The short answer is that nobody knows, but the game almost certainly won’t be played on Northwestern’s gridiron, Ryan Field.

Every college football team has an offensive and defensive coordinator drawing up its game plans, and in this high stakes contest the offensive coordinator for CAPA (the College Athletes Players Association union affiliated with the United Steelworkers that is seeking to represent college athletes) must recognize that the game cannot be played against just Northwestern’s defense. Much of the basis for the NCAA’s micromanagement is assuring that each team has a level playing field (this is not an early April Fool’s joke: over the past several years there was much NCAA consternation over whether its rules allowed cream cheese, jelly or peanut butter to go with the players’ bagels). And while it’s occasionally entertaining to watch the Harlem Globetrotters trounce the Washington Generals, season after season with leagues comprised of a few Globetrotter and a bunch of Generals teams won’t fill the bleachers or Saturday television airwaves.

So if just Northwestern or even all sixteen other other private colleges and universities that play major college football were to unionize, the remaining 85% of their public institution peers would be beyond the NLRB’s reach. And whether it’s the NCAA as a whole or any individual league, playing by different rules just won’t work. Can the Pac-12 allow Stanford or USC to pay extra stipends to its players while Oregon and Arizona State, under NCAA rules, could not? Can Northwestern negotiate a collective bargaining agreement with reduced practice time and yet thrive in the Big 10 against Penn State or Nebraska? (Potential labor agreement, Article XVII, Section C: “During weight room training, (i) players may not be required to bench press more than 60 pounds nor perform more than 5 reps; (ii) players may voluntarily bench press more than 60 pounds and perform more than 5 reps; and (iii) any voluntary bench pressing of more than 60 pounds and/or 5 reps will not be the basis for decisions regarding starting status or playing time.”). With differences in terms and conditions among teams, could the NCAA’s rules even survive?

And that has to be a dilemma for CAPA’s offensive coordinator. If the NCAA’s rules and limitations on scholarship athletes are overturned, negotiating one-off deals with individual colleges is not a winning game plan. Whether public or private, only a few universities (think Michigan, Notre Dame, Ohio State, or Texas) generate the revenue from some combination of sold-out 100,000+ seat stadiums, logo apparel and television rights to engage in an athletic arms race to pay the most highly sought-after five-star recruits. What’s to prevent Florida State from offering six-figure bonuses with its letters of intent? Instead of the NCAA maximum of 85 total scholarship players on the team, why wouldn’t the Crimson Tide sign that many recruits every year (some bloggers believe a version of that already occurs throughout the SEC)? Filet mignon on the training tables for the teams that can afford it, and PB&J sandwiches for the teams that cannot.

The inevitable disparity in talent as a few teams outbid others will make college football (and basketball) less competitive. In 1991, the Richmond Spiders upset second-seed Syracuse in the first round of the NCAA basketball tournament. If Duke or North Carolina can pay to get the best high school hoops players, what chance will a Richmond have then? The few “haves” will have more, and the “have nots” will get what’s left. This eventually would lead to less interest, fewer tickets sold, lower television viewership, less advertising revenue, and lower television rights – and lower pay for the players CAPA wants to represent. But CAPA’s offensive coordinator undoubtedly sees this, and doesn’t want the game called off.

So, CAPA’s solution has to be a level playing field for all. And unless a gridlocked Congress acts (odds roughly equal to those of winning Warren Buffett’s billion dollar NCAA bracket pool???), CAPA knows it can only achieve this by obtaining a collective bargaining agreement to cover the entire NCAA, or at a minimum, each individual conference or perhaps a “superleague” of conferences and their member universities. That’s why professional sports succeed: each team in the league plays by the same salary cap, free agency rules, minimum wage scales, and other terms.

CAPA’s offensive game plan for a level playing field extends beyond the NLRA and collective bargaining, and is instead based in part on antitrust law. Because of a doctrine known as the “non-statutory labor exemption,” the terms of a labor contract —including ones like the NFL’s, MLB’s, NBA’s or NHL’s collective bargaining agreements that “fix” wages and other terms of employment among multiple individual employers—are immune from antitrust claims. Stated simply, because the product of collective bargaining can be argued to stifle competition, the contracts — whether with a single employer or multi-employer association — negotiated by organized labor have been largely exempted from antitrust scrutiny.  This labor antitrust exemption has been further expanded upon to extend not only to the owners’ agreements with players (and restrictions on player movement, etc.), but to the leagues’ agreements with broadcasters and others (which might likewise resolve some of the other cases pending against the NCAA). So for CAPA, the game plan likely includes a labor contract to cover all the teams in any league or even the NCAA. While Northwestern’s football players may have been the first target, CAPA’s goals are much broader.

So how does Northwestern’s defensive coordinator respond to this game plan? One solution might be to simply sit on the ball so CAPA can’t play its game. Just as the University of Chicago abandoned its major college football program in 1939, Northwestern could decide to no longer offer athletic scholarships. The NLRB’s Regional Director specifically found that “walk-ons” or non-scholarship players are not “employees” under NLRA Section 2(3) who are entitled to unionize. Therefore, if a college or university does not offer athletic scholarships, CAPA has no football to kick. And after all, college sports thrive in the NCAA’s Division III, where athletic scholarships are prohibited. (Okay, let’s be realistic: this will not happen, at least among the major athletic conferences.)

But even assuming that CAPA succeeds in playing its game and gets a labor agreement covering one or more athletic conferences, all may not be well on campus. While fans may still fill stadiums to see competitive games among teams playing by the same rules, the NLRB’s decision has other implications for colleges and their students on scholarship. Under the NLRB’s ruling, almost any group of college students who “work” for their scholarships might be considered employees and eligible to unionize under the NLRA. So imagine what might happen if the scholarship recipients in Ohio State’s marching band were to unionize and go on strike. When the Wolverines and Buckeyes (both then represented by CAPA and covered under its labor contract with the Big 10) meet in their late November rivalry game, what will the fans think when the Ohio State marching band – known for the tuba player who dots the “i” in its script “Ohio” – ends their pre-game festivities with only an “Oh.” As last week’s post noted, the NLRB should have punted.

College Football Unions: Throw the Flag for a False Start

Posted in Bargaining Unit, Organizing

By: Bradford L. Livingston, Esq.

Although it’s still the first set of downs in the game between Northwestern University and CAPA (the College Athletes Players Association union seeking to represent Northwestern’s football players) let’s take an instant replay time out to review the last play — the March 26, 2014 NLRB Regional Director’s decision ordering a representation election.   In his decision, the Regional Director specifically found that it would “effectuate the purposes of the [National Labor Relations] Act” (or NLRA) to assert jurisdiction in this case.  So while for over 40 years the NLRB has declined to exercise jurisdiction over the horse racing industry due to the extensive state regulations covering it (among other examples where it has refused to become involved), in this case the Board apparently found that college sports should not be exempt from NLRA coverage despite the NCAA’s incredibly detailed rules, regulations, and reporting requirements governing college athletes and athletic programs.  Like many actions the NLRB has taken or tried to take over the past several years (think “quickie elections,” “micro” bargaining units, class action waivers, and social media rulings) this is yet another significant expansion of the agency’s reach.  And upon further review, it’s clear there should be a five yard penalty — this time against the referees from the NLRB — for a false start.

But let’s be clear: this is not about whether college athletes are “cash cows” who are “exploited” by their universities, deserve revenue from television coverage or the sale of college logo apparel, or any other additional benefits beyond what they already receive with their scholarships.  We can leave that to other litigation like the O’Bannon case against the NCAA concerning royalties for using the likenesses of college athletes in video games now pending in Los Angeles, or the antitrust cases about limits on the value of scholarships filed earlier this month against the NCAA and major athletic conferences by, among others, West Virginia football player Shawne Alston and Rutgers basketball player Jonathan Moore. In the game being played between Northwestern and CAPA, the threshold statutory question is whether it “effectuates the purposes of the Act” to assert jurisdiction and find that college football players are “employees within the meaning of Section 2(3) of the NLRA.”

Likewise, despite the fact they receive no wages or W-2s at year’s end,  let’s not consider the other employment law considerations arising from a finding that college athletes are employees.  If college athletes are employees, the possibilities are almost endless for an enterprising college athlete’s lawyer: state and federal minimum wage suits or FLSA collective action cases for unpaid overtime, working “off the clock” and donning and doffing those helmets, pads and uniforms.  If the Title IX considerations weren’t enough, why not a Title VII case for the 5’ 2” coed who wants to play fullback for Clemson.  And just wait until OSHA gets done regulating college athletics.  But again, the play under review here is limited to the game between Northwestern and CAPA under the NLRA.

And that’s why there should have been a five yard penalty for illegal procedure.  Under the NLRA, employees have the right to bargain over “wages, hours, and other terms and conditions of employment.”  In a typical situation, employees bargain over the wages they are paid, the time they report to and leave work, work rules, job bidding, layoff and recall procedures, retirement benefits, holidays, vacations, how long they have and whether they are paid for their lunch period, and whether they are required to work overtime and how it is distributed.  (In fact, “other terms and conditions of employment” under the NLRA has been construed so broadly as to include bargaining over the prices charged in company lunchroom vending machines.)   With college football players, little of that remains true.

Would a union be able to bargain over whether seniority prevails and upperclassmen are entitled to start before freshmen or sophomores? Like the equalization of overtime contained in many labor contracts, might a union bargain over equal playing time for all?  Could a union negotiate a process to establish who plays what position, which players should get a starting role, and how and to whom to distribute  carries and passes?  Could a quarterback face internal union discipline for calling an audible and depriving a wide receiver of the pass that should have been thrown to him?  Would there be a grievance procedure and binding arbitration for a player who was deprived of his contractual playing time?

Okay, these are admittedly extreme examples.  Athletes and collective bargaining can and do coexist.  Paid, professional athletes have unions, and those unions have negotiated effective labor agreements with, among others, the NFL, MLB, NBA and NHL.  But here’s where college and professional sports differ: professional athletes have a single labor contract that governs all teams in that league.  They all play by the same rules (which they negotiate with the union), whether it is salary caps, when training camp starts, free agency rules, or drug testing protocols.  Their labor agreements typically set minimum thresholds, with each player and his agent able to negotiate separate, individual contract terms within the collective bargaining agreement’s framework and subject to union and league approval. In professional sports, the playing field is even for each team, its players and their union.

Unionization in college sports, however, would be different.  Even the NLRB Regional Director noted in his decision that many terms for college athletes are governed by either NCAA regulations or other rules applicable to all other students at that college or university.  So unless Northwestern decides to ignore the NCAA’s rulebook, the university’s hands will be tied in many respects.  And unlike a labor contract that covers every team in the league with the same terms, the current NLRB case does not involve the NCAA and will create a bargaining unit and eventual labor agreement for just Northwestern.  In his decision, the Regional Director even noted that the NLRB only has jurisdiction over 16 other private colleges and universities in the NCAA’s top football division.  With over 120 major college football programs, fewer than 15% might face unionization and one-off, individual collective bargaining.  Of course, the numbers will be somewhat higher in college basketball, where more private colleges and universities play the sport and would be subject to the NLRA.  And even public universities could face one-off unionization and collective bargaining, where public universities in “blue states” (think Pac-12 such as UCLA or Cal-Berkeley, or Big 10 such as the University of Illinois) might face state labor relations agencies that would follow the NLRB’s lead, while “red state” labor relations boards (think Crimson Tide, Florida Gators and other public ACC or SEC schools) would more likely dismiss any employee-athlete petitions.  Wait and see what happens when teams have to negotiate “working conditions” and then compete under different sets of rules.

Some of the stated logic for players unionizing is negotiating for more limited practice time and medical benefits after a player’s career ends.  Does anyone really believe that a college football coach would agree to less practice time than the NCAA allows? As the NLRB Regional Director noted in his decision, the amount of practice time (and unsupervised, informal but allowable training time) is scrutinized by the NCAA.  Every university has a compliance department to keep records establishing that they take advantage of but do not exceed the permitted limits.  What kind of a sales pitch will it be to tell recruits — typically highly competitive 17 and 18 year-olds who are accustomed to and want to win — that “we won’t work you as hard as you would at other schools?”  Imagine how other coaches will say “Go to Northwestern if you want to relax; play for us if you’re willing to be pushed to be your best, have a better shot at making the NFL, and win a national championship.”  Perhaps one advantage for unionized college football teams will be the ability to scale back on the athletic department’s NCAA compliance staff, since instead there will be a union steward to certify that the players kept to the lesser training schedule contained in the labor agreement. Likewise, the NLRB Regional Director ruled that players who have exhausted their playing eligibility will not be includable in the players’ bargaining unit or eligible to vote since they are no longer active employees. What the decision fails to note, however, is that since an employer need not bargain over benefits (including healthcare) for “retirees” or former “employees,” any negotiated  benefits for players who have exhausted their eligibility might in practice be limited.

Like players who have exhausted their playing eligibility, the NLRB Regional Director ruled that walk-on or non-scholarship players are not employees and would not be part of the players’ bargaining unit.  Because these walk-ons are something like “outside contractors” who are nevertheless performing bargaining unit work, could the players union seek to limit the number of these contractors or their playing time?  And because football teams are limited to 85 scholarship players under NCAA rules but most football scholarships are for a one-year, renewable terms, what happens if a football player’s scholarship is not renewed?  Will the football team face a grievance or unfair labor practice charge and have to litigate whether or not one player or another was entitled to that scholarship?  If an employee-player’s scholarship is restored via the NLRB, what happens if the University has already reached its maximum limit under NCAA rules?

If scholarship athletes are employees under the NLRA, will a union or player be able to file an unfair labor practice charge if an employee faces a suspension for a game?  Will the “employee” be able to file a grievance over the suspension?  Under another of the Obama NLRB’s recent decisions, when a union represents employees and there is no collective bargaining agreement then in place (like during first contract negotiations), an employer may have an obligation to bargain with the union before it suspends an employee.  Imagine a situation in which a player faces a suspension from one or more games for violating NCAA or team rules, but the coach cannot impose the suspension because it did not have an opportunity to confer or bargain with the player’s union representative.

The Regional Director noted in his decision that Northwestern’s football players are required to be Facebook “friends” with their coach, so that he can monitor the players’ posts. Similarly, they must abide by a strict social media policy and are prohibited from giving media interviews except those arranged by the athletic department.  After all, what coach wants to give bulletin board fodder to next week’s opponent?  What the Regional Director failed to discuss, however, is that — while these rules make sense in a college sports environment — according to recent NLRB decisions about social media, employee surveillance, confidentiality rules and other employee handbook provisions, all of them would likely be prohibited as unfair labor practices and unlawful interference with NLRA Section 7 rights.  Based on this conduct, might the NLRB even issue a Gissel bargaining order requiring Northwestern to recognize and bargain with CAPA if it loses the election?

Under the NLRA, employers and unionized employees typically enforce their demands via economic pressure: a strike or a lockout. Will college football players go on strike if their demands are not met?  What happens when the university suspends their “wages and benefits” since they are not “working” during the strike, such as tuition, meals and lodging?  Will the non-bargaining unit “walk-ons” be allowed to play the game? Under the NLRA and NCAA rules, can the strikers be “permanently replaced” by granting scholarships to others?  If a player has been replaced, what reinstatement rights will exist when a coach is trying to recruit classes and offering scholarships for succeeding seasons?

And finally, if scholarship football players are entitled to union representation, why wouldn’t the rules be the same for scholarship players in every other collegiate sport, whether it generates revenue or not?   What happens when the scholarship athletes on the men’s water polo or women’s gymnastics team file a petition with the NLRB?

Again, this is not about whether college football players should be paid.  College sports is big business, and other litigation is pending over big dollar issues such as royalties, scholarship dollar limits, licensing fees, and television revenue.  But it deserves a five yard penalty for a false start to claim it “effectuates the purposes” of the NLRA in finding that college football players are employees.  And since the same logic would undoubtedly hold true for scholarship basketball players, it’s appropriate to shamelessly borrow another sports analogy:  As we enter the second weekend of the NCAA basketball tournament, perhaps the real March Madness is with the NLRB.

NLRB GOES LONG: REGIONAL DIRECTOR FINDS NU FOOTBALL SCHOLARSHIP ATHLETES ARE EMPLOYEES

Posted in Current Events, Elections, Representation Cases

 By: Ron Kramer, Kristin Michaels, Mary  Klimesh & Anne Harris

Earlier today the Regional Director (“RD”) for Region 13 of the NLRB found that Northwestern University’s scholarship football players are employees under the NLRA and thus have the right to unionize.  As a result, the RD directed that an election be held to determine whether they wished to be represented by the College Athletes Players Association (“CAPA”).  This is a groundbreaking decision that no doubt will be litigated for some time to come.

In coming to the conclusion that the scholarship athletes were employees under the Act, the RD focused on whether the players were “employees” under the common law definition of an employee, i.e., whether the athletes perform services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.  Here, the RD found that the players performed valuable services for the University in that the University’s football program generated revenues of approximately $235 million from 2003-2012, along with the value provided to the University’s reputation from having a winning football team. 

The RD also considered the up to $76,000 a year players receive in tuition, fees, room and board and books for up to five years to be “compensation.”  While the RD recognized players do not receive a paycheck in a traditional sense, and are not taxed on the benefits they receive, “they nevertheless receive a substantial economic benefit for playing football.”  Equally important, the RD found that the “tender” players accepting scholarships must sign constituted an employment contract, for it provided them with information as to the duration and terms and conditions under which they would receive compensation.  Lastly, the RD took into account the fact the players are not permitted to engage in any other employment, and thus are dependent upon the scholarships for bare necessities, and that the scholarships were clearly in exchange for the athletic services being performed.  The scholarships are tied to the players’ athletic performance, since the scholarships can be revoked if players voluntarily withdraw from the team or violate team rules.

The RD also determined that the scholarship players were subject to the University’s “control” in the performance of their duties as football players.  The RD’s conclusion was based on the following considerations.  During training camp six weeks before the start of the academic year coaches prepare and provide daily itineraries setting forth, hour by hour, what players are to do from as early as 5:45 am until 10:30 pm.  Players spend 50 to 60 hours per week engaged in football related activities during training camp.  During the regular season, players can spend 40 to 50 hours per week on football related activities.  It is not unusual at away games for players to spend 25 hours over a two-day period traveling to, practicing for and participating in away games.  According to the RD, coaches control every detail for those trips and what the players do during this time.  Even during the off season players are expected to devote 12 to 25 hours per week on football related activities.  In addition, the RD stated that the coaches control the players’ private lives as well, given the numerous rules players must follow under the threat of discipline and/or the loss of their scholarships.  Rules range from prohibitions on alcohol and tobacco use, to where players live, what they post on the internet, etc.  The control exercised over the players was found to be so pervasive that the RD found it “clear that the players are controlled to such a degree that it does impact their academic pursuits to a certain extent.”

The RD found that the players on scholarship, at least those who had yet to exhaust their eligibility, were employees under the Act.  The RD found, however, that the walk-on players were not employees under the Act since they received no compensation in the form of scholarship monies tied to playing football, signed no “tender,” and appeared to have greater flexibility when it came to missing practices and workouts to the extent it conflicts with their coursework.

The University argued that the players were not employees based on Brown University, 342 NLRB 483 (2004), in which the Board found certain graduate assistants were not employees.  The RD distinguished Brown University, finding that (1) scholarship football players are not primarily students, due to the amount of time they spend on football-related activities per week (40-50 hours per week versus about 20 hours per week attending classes); (2) scholarship players’ athletic duties do not constitute a core element of their educational degree requirements, as they receive no academic credit for playing football, nor must they play football to obtain their undergraduate degree; (3) academic faculty do not supervise scholarship players’ athletic duties – football coaches who are not part of the academic faculty supervise players’ athletic duties; and (4) scholarship players’ compensation is not financial aid, as it is given in exchange for the athletic service that the player is providing the University.  

The RD also found that the players are not temporary employees and thus excluded from coverage under the NLRA because, although their “employment” is for a finite duration, it is for a “substantial” duration, i.e., four years.

Having found that the scholarship football players were employees and given that the walk-ons were not employees, the RD found that the proposed  bargaining unit was appropriate.  The RD further found that the union was a labor organization under the Act.  In light of the findings, the RD ordered than an election be scheduled for determine whether the scholarship players wished to be represented by CAPA.

The University has the right to request review of the decision from the NLRB. 

This decision will have a huge impact on both private and public sector educational institutions.  If upheld, it is possible many private university scholarship athletes, at least in revenue generating sports, will be subject to organizing.  Public university athletes may similarly attempt to organize in states where public employees in the educational sector are permitted to organize.  Moreover, this decision may cause the Board to revisit its decision in Brown University.  We will continue to report on this case as new developments occur.

NLRB Finds That Unlawful Withdrawal of Recognition Warranted Affirmative Bargaining Order

Posted in Collective Bargaining, NLRB

By:  Ashley K. Laken, Esq.

 On Monday, the NLRB held in a 3-0 decision that an employer unlawfully withdrew recognition from a union and that an affirmative bargaining order was warranted as a remedy.  Pacific Coast Supply, LLC, 360 NLRB No. 67.  Although the decision does not create any new law, it serves as a poignant reminder of the potential perils associated with unilaterally withdrawing recognition from a union, even if it appears that a majority of the bargaining unit no longer wants to be represented by the union for purposes of collective bargaining.

 The Underlying Facts 

 The union and the employer had maintained an ongoing collective bargaining relationship since the 1960s, and the most recent collective bargaining agreement between the parties expired on February 28, 2012.  The parties held their first negotiating session for a successor agreement on March 27, 2012, and their next session was scheduled for July 30, 2012.  On July 20, 2012, however, the employer withdrew recognition from the union. 

 Under current Board precedent, an employer may lawfully withdraw recognition after the expiration of a collective bargaining agreement only if it can demonstrate that the union has actually lost the support of a majority of the bargaining unit employees.  The employer’s withdrawal of recognition was based on the following statements signed by 8 of the 15 employees in the bargaining unit: 

  1.  “I resign from [the Union].”
  2. “I . . . do not wish to be a Union member.”
  3. “I . . . would like to exit the union.  This is due to the union not doing any services for the cost that they are charging.” 
  4. “I . . . wish to get out of the Union.” 
  5. “I . . . do not wish to be a part of the Union now or in the future.”   
  6. “I . . . do not wish to be part of the union.”
  7. “I no longer wish to be a part of [the Union].”
  8. “I do not wish to be part of the Union.” 

There was no claim that supervisory involvement had tainted these statements, nor were any contemporaneous, unremedied unfair labor practices alleged.

 Basis for the Finding that the Withdrawal of Recognition was Unlawful

 In finding that the withdrawal of recognition was unlawful, the Board analyzed only the first four of the above eight employee statements.  The Board found that the statements did not reflect that those employees no longer wanted to be represented by the union.  The Board reasoned that statements of a desire to terminate union membership do not support a withdrawal of recognition, as termination of membership means only that an employee does not wish to pay union dues, not that the employee no longer wants the union to represent employees. 

 The Board also found irrelevant the fact that after recognition was withdrawn, the eight employees stated that what they meant in their statements was that they did not want to be represented by the union for purposes of collective bargaining.  The Board reasoned that what matters is the objective evidence of loss of majority status that exists at the time of the withdrawal of recognition, not evidence that exists later.    

 The Board’s Rationale for an Affirmative Bargaining Order

 The Board observed that in determining whether an affirmative bargaining order is warranted, it must weigh (1) the employees’ Section 7 rights, (2) whether other purposes of the Act override the rights of employees to choose their bargaining representatives, and (3) whether alternative remedies are adequate to remedy the violations of the Act. 

 The Board found that an affirmative bargaining order would not unduly prejudice the Section 7 rights of employees who may oppose continued union representation because the bargaining order was no longer than was reasonably necessary, that an affirmative bargaining order served the policies of the Act by removing the employer’s incentive to delay bargaining in the hope of further discouraging support for the union, and that a cease-and-desist order alone would be inadequate because it would permit another challenge to the union’s majority status before the taint of the employer’s unlawful withdrawal of recognition had dissipated.  The Board therefore found that an affirmative bargaining order with its temporary decertification bar was warranted.

 The Board also ordered the employer to, at the request of the union, adhere to any or all of the terms and conditions set out in the expired collective bargaining agreement, and to also make unit employees whole, with interest, for any loss of earnings and other benefits they may have suffered because of the employer’s repudiation of the collective bargaining relationship.      

 Concluding Thoughts

 The decision highlights some of the risks associated with unilaterally withdrawing recognition from an incumbent union.  Oftentimes, statements from employees that appear to provide support for an argument that a majority of employees no longer want to be represented by the union will be ambiguous at best.  In such cases, employers may want to consider obtaining clarification from the employees (but not without the employees first signing acknowledgments regarding their Johnnie’s Poultry rights) before withdrawing recognition.  Alternatively, employers might consider filing a petition for an election to determine whether there really is continuing majority support for the union.  In any case, employers would be wise to consult with labor counsel when considering withdrawing recognition from an incumbent union.

The Road Ahead–What is in Store for Trucking Companies in 2014

Posted in Current Events, Uncategorized

By: Michele Haydel Gehrke, Esq.

Two recent developments for trucking employers could impact their operations and employee relations.  The first is a proposed rule by the Department of Transportation’s Federal Motor Carrier Safety Administration issued February 20, 2014 that would create a national clearinghouse of the drug and alcohol testing histories for truckers and bus drivers that prospective employers would be required to check prior to making hiring decisions. 

The clearinghouse would serve as a central depository for a driver’s positive drug and alcohol test results, as well as any refusals to test.  Beyond the requirement to check the database prior to hiring any new drivers, employers would also be required to check records for current employees every year.  Employers also have the duty to report any positive drug or alcohol test results, any adulterated samples or refusals to test, and actual knowledge of any driver citations for driving under the influence.

The goal of the proposed rule is to improve safety by helping employers identify drivers with clean records.  The clearinghouse is being established to comply with the Moving Ahead for Progress in the 21st Century Act (H.R. 4348), which was signed into law in July 2012 and requires the Secretary of Transportation to “establish a national clearinghouse for controlled substance and alcohol test results of commercial motor vehicle operators.”  The public has until April 21, 2014 to comment on the proposed rule. 

The second development to watch for transportation employers is two cases pending before the Ninth Circuit Court of Appeals regarding whether the Federal Aviation Administration Authorization Act (“FAAAA”) preempts California’s meal and rest period requirements for drivers.  On February 18, 2014, the United States filed two similar amicus curiae briefs in the pending cases, Dilts v. Penske Logistics, LLC and Campbell v. Vitran Express, Inc., arguing that the FAAAA does not preempt California’s meal and rest break requirements because such laws are “…squarely within the states’ traditional power to regulate the employment relationship and to protect worker health and safety.”  The government further argued that these laws are of “longstanding, general applicability” and do “not reflect any state effort to regular motor carriers directly.”  The government argued that its view on the lack of a preemptive effect on such laws is entitled to deference.

The FAAAA prohibits states from enacting or enforcing laws related to a price, route, or service of a motor carrier.  In trying to defeat claims for meal and rest period violations under California law, trucking employers have argued that the FAAAA preempts state law because the requirements have a direct and/or indirect impact on prices, services, or routes since employers have to schedule employees’ routes to take into account the break requirements. 

The cases are set for oral argument before the same Ninth Circuit panel on March 3, 2014.

Both of these legal developments have broad implications for transportation employers, and will be closely watched by the trucking industry.  We will continue to monitor and report on these developments as events unfold. 

 

Northwestern Football Players Get in the Game

Posted in Uncategorized

By:  Anne D. Harris. Esq.

We recently blogged here about a group of Northwestern University football players who filed a petition for union representation. 

On February 12, 2014, the Board held a hearing on the football players’ petition.  Represented by the College Athletes Players Association (“CAPA”), the football players and Northwestern counsel each provided an opening statement outlining a summary of their respective positions.  CAPA asserted that football players receiving scholarships are employees under the NLRA.  Further, CAPA maintains that these students are under control of the university, receive “payment” in the form of scholarships and generate millions of dollars for the university.  CAPA also argued that while football players are still students, their athletic responsibilities place them in a separate and distinct group appropriately considered “employees.”

In response, Northwestern maintained that football players are not employees under the NLRA and that the Board’s decision in Brown University contains the appropriate test.  In addition, Northwestern questioned CAPA’s status as a labor organization and whether the scope and composition of the proposed unit is appropriate given that many players may or may not be eligible to vote.  Specifically, Northwestern expressed concern over players who already have completed their final year of athletic play but who still receive scholarship benefits, players who receive need-based scholarships, and players who are “walk-on” athletes who do not receive any scholarship to play football.  Lastly, Northwestern asserted that even if these players are “employees” they can only be considered temporary employees under the NLRA. 

The football players’ petition is the first of its kind but it is not likely to be the last.  Athletes of various sports from other colleges or universities may follow in the Northwestern students’ footsteps, including those playing for public colleges and universities that generate significant sums of money from their athletic programs.    

The Northwestern petition hearing will continue on February 18, 2014 at 9:00 a.m. CST during which witnesses will testify.  Stay tuned, as we will continue to provide updated coverage on this issue.

NLRB Invites Briefs Regarding the Board’s Standard for Deferral to Arbitration Awards

Posted in Arbitration, Current Events, NLRB

By: Kenneth R. Dolin, Esq.

The National Labor Relations Board recently invited interested parties to file briefs in Babcock & Wilcox Construction Inc., Case 28-CA-022625, to determine whether the Board should continue, modify, or abandon the Olin/Spielberg standard for deferral to arbitration awards.

Under the existing standard, the Board defers to an arbitration award when (1) the arbitration proceedings are fair and regular; (2) all parties agree to be bound; and (3) the arbitral decision is not repugnant to the purposes and policies of the Act. Spielberg Mfg. Co., 112 NLRB 1080 (1955). Further, the arbitral forum must have considered the unfair labor practice issue. The Board deems the unfair labor practice issue adequately considered if (1) the contractual issue is factually parallel to the unfair labor practice issue, and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice issue. Olin Corp., 268 NLRB 573 (1984). The burden of proof rests with the party opposing deferral.

The NLRB General Counsel has asked the Board to adopt a different standard in accordance with the Guideline Memorandum issued three years ago. Under his proposal, the party urging deferral would bear the burden of demonstrating that (1) the collective-bargaining agreement incorporates the statutory right, or the statutory issue was presented to the arbitrator, and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue. If the party urging deferral makes that showing, the Board would defer unless the award was clearly repugnant to the Act.

The Board is inviting all interested parties to file briefs. The briefs must be filed with the Board in Washington, D.C. on or before March 25.

The Obama Board is expected to change its framework for post-arbitral deferral because it will likely find Olin’s standard for deferral inadequately protects employees’ statutory rights in Section 8(a)(1) and Section 8(a)(3) cases. Thus, the Board is likely to revise its post-arbitral standard in Section 8(a)(1) and Section 8(a)(3) statutory rights cases to ensure actual arbitral consideration of the rights afforded by the NLRA and will not tolerate substantive outcomes from arbitrators that differ significantly from those that the Board itself would reach if it considered the matter de novo.

In this regard, the Board also will likely change Olin’s allocation of the burden of proof for deferral, placing such burden on the party urging deferral to ensure that the statutory issues have been considered by the arbitrator, as well as to encourage parties seeking deferral to establish an evidentiary record that will give the Board a sounder basis for reviewing arbitral awards and deciding whether to defer. If the party urging deferral makes the showing set forth above, the Board is expected to enunciate a standard where it will defer unless the result is “palpably wrong,” i.e., the arbitrator’s award is not susceptible to an interpretation consistent with the Act.

Requiring that statutory issues be considered as a condition for deferral to an arbitral award would also likely result in the Board reviewing the standards for deferral for pre-arbitral grievance settlements as well. Thus, it is likely that the Board will adopt a rule that gives no effect to a grievance settlement unless the evidence demonstrates that the parties intended to settle the unfair labor practice charge as well as the grievance. If the evidence does so indicate, the Board will likely review the non-Board settlement under the standards of Independent Stave Co., Inc., 287 NLRB 740, 743 (1987): (1) whether parties have agreed to be bound and the General Counsel’s position; (2) whether the settlement is reasonable in light of the alleged violations, risks of litigation, and status of litigation; (3) whether there has been any fraud, coercion or duress; and (4) whether the respondent has a history of violations or of breaching previous settlement agreements.

If the Board adopts a more thorough post-arbitral review of deferral cases, it is likely that charges alleging Section 8(a)(1) and Section 8(a)(3) violations will be investigated more thoroughly before an “arguable merit” determination in considering Collyer deferral is made. This may actually result in more evidence taken from the Charging Party, including affidavits, before an “arguable merit” determination is made.

The appellate courts have generally approved of the Board’s approach on post-award deferral and the standards articulated in Olin. The Obama Board’s anticipated tightening of the standard for post-arbitral deferral will certainly be contrary to the national policy strongly favoring the statutory arbitration of disputes, and will likely result in courts of appeal more closely scrutinizing refusals by the Board to defer to arbitration. It also may encourage parties to circumvent their grievance procedure by filing unfair labor practice charges whenever they believe they had a better chance of a favorable resolution before the Board.

As to the “palpably wrong” criteria, it remains to be seen whether the Board will at least defer to a pre-arbitral settlement or post-arbitration award whenever the statutory right implicated is within the category of “waivable” rights — e.g., economic issues, the right to strike, and matters of selective discipline — provided that the proceedings are fair and regular and the union has not breached its duty of fair representation. It is quite possible, though, that the Obama Board may only give deference to a settlement or award when it approves of the result of a settlement but intervene whenever it does not approve. As Judge Harry Edwards observed more than 20 years ago in the context of NLRB deferral, “a cynical observer might be inclined to view this approach as a veritable recipe for arbitrary action.”  Plumbers & Pipe Fitters Local 520 v. NLRB, (UE&C-Cataglia, Inc.), 955 F.2d 744, 756-57 (D.C. Cir. 1992).