Even with the hoopla surrounding March Madness there has been equally compelling news regarding college football despite the fact that that sport is not even in season.  The National Labor Relations Board’s Chicago office just handed down a decision that Northwestern football players are employees and have the right to organize.  Nothing will happen immediately because the case is being appealed. Below are my thoughts on this fascinating development:

•  The decision is a groundbreaking one and could lead to unionization amongst college athletes and major changes for the NCAA.
•  The decision was largely based on the amount of control that the football program exercised over the students – i.e., the rigorous practice schedule, mandatory requirements, etc.   Basically, the schools are so demanding in what they require of the players that they are effectively acting as employers.
•  The decision was also based on the fact that the NCAA is a major business and that the players are generating profits for the university like employees generate profits for employers.
•  The fact that students get full scholarships was enough for the NLRB to conclude that the students are “paid” like an employee.
•  The next step is an appeal to the NLRB in Washington, DC
• The NLRB in DC is likely to uphold the decision because of its political composition (a majority are Obama appointees and pro-labor union)
• If the decision is upheld, the NLRB will conduct a secret ballot election.
•  It’s also possible that the NLRB will order the election to go forward even during the appeal and wait to count the ballots until after the appeal is done.
• If a majority of players vote in favor of the Union, the University would be required to engage in collective bargaining negotiations over terms and conditions of employment (which in this case means playing football for the school).
•  At that point the School can refuse to negotiate, and the case will go the U.S. Court of Appeals in either D.C. or Chicago.  The only other appeal after the Court of Appeals is the U.S. Supreme Court, which does not have to take the case.
• Northwestern players have said they are not interested in negotiating for money for playing, but I suspect that if this continues down that path some group of players will be.  For now, they say they want better medical benefits and a say in how the team is run.
• The Regional Director Decision covers Northwestern and the 16 other private Division 1 schools with FBS football programs.  In the event football players at a state school (like the University of Maryland, for example) want to form a union, they would have to go through the MD State Labor Board processes.  The NLRB decisions are not binding in that forum, but would be looked at for guidance.
• The NLRB’s ruling is not controlling on other federal or state entities, but it will be interesting to see if this leads to worker’s compensation coverage for football players.
• Currently under IRS Regulations the value of a scholarship is exempt from taxation.  Now that the NLRB has found that the scholarship is akin to the payment that makes the players employees, it will be interesting to see if Congress or the IRS changes its view on the exemption for scholarships.
• The Board ruling is specific to big time football programs; it will be interesting to see what application it would have if student athletes on non-revenue sports teams (rowing, swimming, etc.) tried to unionize.