Labor Board's New 'Joint Employer' Standard Offers College Football Players a Second Chance

Marking a victory for workers, on August 27, the National Labor Relations Board (NLRB) issued a highly anticipated decision in the case of Browning-Ferris Industries, updating its overly restrictive standard for determining “joint employer” status for purposes of collective bargaining. The decision responds to the increasing reliance on contingent work arrangements that often involve multiple employers, and reflects the Board’s recognition that its application of labor law must be adjusted to address the realities of today’s economy.

Much of the news coverage of the decision has focused on what it could mean for fast-food establishments, like McDonald’s, whose joint employer status — as a big corporate franchisor exercising control over employees of its local franchisees — is currently pending review before the NLRB. Yet it’s also worth exploring what the new joint employer standard means, if anything, for college football players seeking to collectively bargain.

Just weeks before the Browning-Ferris decision, the Board unanimously declined to assert jurisdiction in Northwestern, a case involving the collective bargaining rights of Northwestern University football players receiving grant-in-aid scholarships. The case went down as a loss for the athletes, but perhaps the game isn’t over yet. Reading the Northwestern and Browning-Ferris decisions together raises an interesting question about how the Board might rule in a case involving college football players seeking to collectively bargain with their individual teams and the National Collegiate Athletes Association (NCAA) as “joint employers.”

Under the Board’s revised standard, it will find that “two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.” The Board will look at all factors in determining whether an employer exercises sufficient control over employees to qualify as a joint employer, including whether the employer has exercised control indirectly through an intermediary, or reserves the authority to exercise control. Essential terms and conditions may include—but are not limited to—hiring, firing, discipline, supervision, direction, wages and hours, work and shift schedules, overtime, and work assignments.

In its decision, the Board held that Browning-Ferris Industries (BFI) and Leadpoint, a staffing agency, are joint employers for purposes of collective bargaining. A contract between the two companies provides that Leadpoint will supply workers to perform certain jobs at BFI’s recycling facility. The contract also specifies workers’ assignments, hours, and pay, and states that Leadpoint is the sole employer. In practice, however, BFI reserves control over certain employment terms and conditions, and sometimes has exercised it — prohibiting re-hires, mandating drug tests, and specifying the number of workers per shift, among other things. In certain instances, BFI has exerted its control indirectly by using Leadpoint supervisors as an intermediary to communicate with employees about work performance.

So, what’s this have to do with Northwestern? In that case, the Board declined to assert jurisdiction because it “would not serve to promote stability in labor relations.” It reasoned that it doesn’t have jurisdiction over the majority of football teams at public colleges and universities. The Board also emphasized the level of control exercised by the NCAA and the Big Ten Conference over the individual member teams and over the terms and conditions of the players’ scholarships.

This particular case was a loss for college athletes and some scholars have made cogent arguments for why the Board got it wrong. But perhaps the Board was hinting that it’d be more willing to assert jurisdiction in a case involving players seeking to collectively bargain with their individual institutions and with the NCAA as joint employers?

Exploring how this could play out favorably for college players, the first issue to tackle is whether they are “employees” under the National Labor Relations Act (NLRA). Because the NLRA defines the term “employee” broadly, Board decisions typically refer to the common law definition. The Restatement (Second) of Agency – a respected legal treatise encapsulating general principles of common law –provides that “A servant is an agent employed by a master to perform a service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.”

At the initial stage of the Northwestern case, the NLRB Regional Director construed common law and Board precedent to determine that “players receiving scholarships to perform football-related services for the Employer under a contract for hire in return for compensation are subject to the Employer’s control and are therefore employees within the meaning of the Act.”

The scholarships offered to prospective football players at Northwestern have a value up to $76,000 per year and are provided to students in exchange for performing football-related services. To accept an offer, the player must sign a “tender,” agreeing to the terms and conditions of the scholarship. If the student fails to comply with the rules and regulations of the individual team, NCAA, or conference, the tender offer may be reduced or cancelled. As the Regional Director emphasized, “The scholarship is clearly tied to the player’s performance of athletic services as evidenced by the fact that scholarships can be immediately canceled if the player voluntarily withdraws from the team or abuses team rules.”

The primary distinction between players receiving scholarships and walk-on players is that walk-ons don’t receive compensation. They are subject to the rules and regulations of the team, the Conference, and the NCAA, except they aren’t bound to the scholarship terms and conditions. None of the players on the team receives any academic credit for playing football and the coaches aren’t members of the academic faculty.

While the Regional Director concluded that players receiving grant-in-aid scholarships are employees, he argued that walk-on athletes aren’t employees because they don’t receive compensation. But contrary to the Regional Director’s construction of the term “employee,” the common law definition doesn’t require compensation. Furthermore, requiring that an “employee” receive compensation would constitute bad policy because it would allow an employer to deny its employees the right to collectively bargain simply by calling them volunteers and refusing to pay them. Thus, it’s not only reasonable, but well within the NLRB’s authority to conclude that all college football players—regardless of compensation—are employees for purposes of collective bargaining.

The next question, then, is whether Northwestern University and the NCAA are joint employers. Northwestern is a private, non-profit college and its football team generates significant revenues. The team controls its day-to-day decisions, subject to the league and conference rules and regulations, such as offering positions on the team, removing players from the team, disciplining and suspending players, dictating practice and performance requirements, restricting players’ free speech on social media and in public fora, and approving players’ outside employment. The Board noted in its decision that there was no dispute about whether the University is an “employer.”

Although the Board didn’t opine on the NCAA’s employer status, it emphasized that the NCAA “exercises a substantial degree of control over the operations of individual member teams, including many of the terms and conditions under which the scholarship players (as well as walk-on players) practice and play the game.” For example, the NCAA controls the number of scholarships each member school can award, the number of players allowed to participate in preseason practices, the number of hours players can practice, and the minimum academic requirements players must meet. The NCAA also prohibits players from hiring agents or from receiving compensation based on their name, likeness, or athletic ability. “As a result,” the Board reasoned, “labor issues directly involving only an individual team and its players would also affect the NCAA, the Big Ten, and the other member institutions.”

The detailed discussion by the Board about the NCAA’s control suggests the Board may be willing to conclude that the NCAA qualifies as an employer of college football players and that each member team and NCAA “share or codetermine those matters governing the essential terms and conditions of employment.” Thus, where the individual team, like Northwestern, is a private college or university exercising substantial control over its players, the Board could reasonably find that the NCAA and the individual team are joint employers. Because the Board lacks jurisdiction over public schools, it can’t confer employer status to their teams, regardless of how much control the team exercises over its players. However, the Board could still find that the NCAA is an employer and is required to meaningfully bargain with the players over the terms and conditions within its control (subject to state law regarding public employees’ bargaining rights).

On one hand, the Board could find that its lack of authority over public institutions causes too much instability between similarly situated member teams’ ability to collectively bargain, and thus could decline to assert jurisdiction as it did in Northwestern. On the other hand, in Browning-Ferris, the Board intimated that it might be willing to assert jurisdiction over such a matter. In a footnote, the Board writes, “Where two entities ‘share or codetermine those matters governing the essential terms and conditions of employment,’ they are both joint employers—regardless of whether collective bargaining with one entity alone might still be regarded as meaningful, notwithstanding that certain terms and conditions controlled only by the other entity would be excluded from bargaining.”

Surely this hypothetical case goes much further than Northwestern did toward promoting stability in labor relations with similarly situated players and teams. A decision in favor of college football players in such a case would also be well within the boundaries and in the spirit of the NLRA. Of course, whether or not the Board ultimately recognizes the bargaining rights of college football players will remain a mystery until a new group of players steps up to challenge the undefeated college football establishment.