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Northwestern players denied request to form first union for athletes

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NLRB ruling a short-term victory for NCAA (2:34)

Jay Bilas reacts to the National Labor Relations Board's decision to deny Northwestern players' bid to unionize and its dismissal of a petition from the College Athletes Players Association. (2:34)

In a surprising decision that amounts to punting on the issue, the National Labor Relations Board on Monday declined to assert jurisdiction in the historic Northwestern University case after football players had been deemed to be employees by the regional NLRB director last year.

Effectively, the decision is a major victory for Northwestern and the NCAA. Analysts expected the five-member NLRB to either back or reverse the decision, but instead, the board exercised its discretion not to take charge of the case and dismissed the representation petition filed by the College Athletes Players Association, which had worked with then-quarterback Kain Colter and the Wildcats football team.

"In the decision, the Board held that asserting jurisdiction would not promote labor stability due to the nature and structure of NCAA Division I Football Bowl Subdivision (FBS)," the NLRB wrote in its decision. "By statute the Board does not have jurisdiction over state-run colleges and universities, which constitute 108 of the roughly 125 FBS teams.

"In addition, every school in the Big Ten, except Northwestern, is a state-run institution. As the NCAA and conference maintain substantial control over individual teams, the Board held that asserting jurisdiction over a single team would not promote stability in labor relations across the league.

"This decision is narrowly focused to apply only to the players in this case and does not preclude reconsideration of this issue in the future."

A ruling in support of the CAPA would have affected all private schools with football programs in the NCAA's top tier, as the NLRB governs the relationships between private business and employees. There are 17 of these universities: Baylor, Boston College, BYU, Duke, Miami, Northwestern, Notre Dame, Rice, SMU, Stanford, Syracuse, TCU, Tulane, Tulsa, USC, Vanderbilt and Wake Forest.

Colter told Outside the Lines that he is "disappointed" but does not consider the effort a failure, given the reforms that the CAPA effort helped catalyze within college sports.

"It's definitely not a loss," he said. "Since we started this movement, a lot of positive changes have come from this -- the introduction of four-year scholarships, increased stipends, maybe better medical coverage, the lifting of food restrictions. A lot of the things that we've been fighting for have been adopted. But there is a lot of room to go."

Colter said that he and Ramogi Huma, CAPA president and a former UCLA linebacker, have not charted next steps but will continue to advocate for opportunities to help athletes.

"Me and Ramogi and a bunch of other people saw (the NLRB decision) going differently," Colter said, "but this isn't the end. This isn't going to stop us from pushing for college athlete rights. That will eventually come. If it's not going to happen this way, we'll get it another way."

The NCAA, which is not a defendant in the suit but supports Northwestern's defense, said in a statement: "The National Labor Relations Board's decision to reject jurisdiction and dismiss the union petition in this case is appropriate. In its ruling, the NLRB recognized the NCAA continually evolves to better support college athletes. In recent years we have provided college athletes with multi-year scholarships, free education for former college athletes and unlimited meals. Further, college athletes helped Division I change rules in January to provide guaranteed, full cost of attendance scholarships and improve student wellbeing. The NCAA and its member schools are committed to providing the best support possible for all college athletes and will continue to do so in the future."

Alan K. Cubbage, Northwestern's vice president for university relations, said Monday in a statement: "As the University has stated previously, Northwestern considers its students who participate in NCAA Division I sports, including those who receive athletic scholarships, to be students, first and foremost. We applaud our players for bringing national attention to these important issues, but we believe strongly that unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes. We are pleased that the NLRB has agreed with the University's position."

In Northwestern's final brief before the NLRB last July, university lawyers argued that providing athletes with the right to collectively bargain "would create chaos in college athletics." They predicted harm to the academic freedom of universities to draw up educational requirements as they see fit, as well as other "adverse consequences" -- writing that since only football players were asking to be treated as employees, the universities might have to reduce support for other male sports while enhancing support for females due to Title IX requirements.

In justifying its decision, the NLRB expressed concern that asserting jurisdiction "over the single team in this case would likely have ramifications" for other college football teams. Ramogi Huma, founder of the CAPA, told Outside the Lines he found it odd that the NLRB would concern itself with teams' chances at on-field success, given its charge related to labor law.

Besides, Huma said, "Competitive equity doesn't exist right now, and we have data to support that. To use a hollow argument to deny players equal protection under the law is disappointing."

Huma said the NLRB decision does not close the door on unionization of athletes. "It only closes it at Northwestern at this time," he said. "It also makes note that college sports is changing. The board in the future could exercise its jurisdiction."

The doomsday scenarios clearly sowed doubt into the NLRB. The NLRB's seven-page decision said that the question of whether athletes are employees "does not have an obvious answer." It also noted that actions have been taken to improve athletes' welfare since the frozen January day in 2014 when Huma, accompanied by United Steelworkers president Leo Gerard and political director Tim Waters, made history and filed the players' signed union cards with the NLRB's regional office in Chicago.

If athletes were considered employees, they would not be taxed on their athletic scholarships, according to the Internal Revenue Service. The question of tax implications was raised by Northwestern, but in an April 2014 letter to Sen. Richard Burr, the IRS clarified that its code allows for the exclusion of tuition, fees, books, supplies and equipment required for courses of instruction at educational organizations.

"It has long been the position of the Internal Revenue Service that athletic scholarships can qualify for exclusion from income," wrote IRS commissioner John A. Koskinen.

In their final brief before the NLRB last July, CAPA lawyers said that speculation about the impact of a decision in its favor provides no grounds to deny the players the rights they claim under federal labor law.

"Northwestern and its (allies) have enormous self-interests in maintaining the system whereby the universities, coaches and athletic directors, the NCAA, and others -- who do not risk concussion and other injury -- share multi-millions in revenue generated by the players' labor," they wrote. "Players want to be heard by those who control their working conditions, and as employees they have the right to bargain over the terms and conditions under which they work, even if recognition of that right is inconvenient for, or philosophically disagreeable to, or adverse to the economic interests of their employer."

CAPA leaders were hoping the decision would be issued last December, before the end of the term of one of the five members of the NLRB board, Nancy Schiffer. She was replaced this year by a fellow Democrat, Lauren McFerran, who needed time to familiarize herself with the case. NLRB decisions often run along party lines, but this one did not go that way.

Northwestern had appealed the historic ruling of the regional director of the NLRB, Peter Sung Ohr, who determined the players were employees under the National Labor Relations Act. He based his decision in part on the expanded commercial activity of the football program, which had revenue of $235 million between 2003 and 2012. He also noted the high levels of control that coaches have over their players' daily lives, devoting nearly half of his 24-page opinion to a detailed account of the practice schedules, travel demands, and monitoring of non-sport activity such as social media. He concluded the athletic scholarship is a contract for hire.

Northwestern objected to each of those points in asking the national NLRB to overturn that decision. The university also sought protection under a previous NLRB ruling regarding Brown University that decided graduate students are not employees, with Northwestern arguing that athletes serve the same function at a university. Ohr had already rejected that notion, concluding that "the players' football-related duties are unrelated to their academic studies, unlike the graduate assistants whose teaching and research duties were inextricably related to their graduate degree requirements."

Colter testified that he considered the 40-plus hour weekly commitment to the team to be "work," albeit work that he enjoyed, like any employee who likes his job. He said the football commitment required academic sacrifices, including the inability to pursue his preferred major, pre-med. But at the hearing, he praised Northwestern coach Pat Fitzgerald. Colter made it clear his issue was not with the school itself, but with the NCAA and its treatment of players nationally.

Colter had told Outside the Lines at the time that he was motivated to act by the experiences of relatives who played college football, including an uncle, Cleveland Colter, once a projected first-round NFL draft pick who blew out a knee late in his USC career and never played professionally. Colter's father, Spencer, later played safety for the University of Colorado when the Buffaloes won a national championship in 1990.

Fitzgerald said in a statement: "Our young men chose to attend Northwestern to compete on the field at the highest level, earn a world-class education and prepare for the rest of their lives. They have displayed maturity beyond their years through this process, and the experience has unquestionably brought us closer together as a football family. This group posted the highest cumulative GPA in program history during the 2014-15 academic year, earned a record 38 Academic All-Big Ten honors last season, and is excited to return to the field this fall to play the game they love and compete for a Big Ten championship."

Legal analysts noted that unanimous decisions by the NLRB are rare and likely the compromise result of the board disagreeing over whether athletes are, in fact, employees.

With the NLRB's decision to not assert jurisdiction, the votes of the Northwestern players on whether they wanted to unionize under CAPA will not be counted. A simple majority was needed for players to organize under the CAPA, and 76 players were eligible to vote. Colter was not one of them, as he has since exhausted his NCAA eligibility. He later caught on with the Minnesota Vikings as an undrafted free agent and training player, but was released in May.

A vote in favor of unionizing was far from certain. Fitzgerald led the effort to prevent players from organizing and campaigned against the union among his athletes. In the days before the vote, several players made public comments that they were on the same page as their coach. Voices in support of the union were few, which was perhaps not surprising, given the stance of their coach and the criticism of many Northwestern alumni who resented Colter for helping to put the school at the center of a national debate that could alter the shape, or at least economics, of college sports.

The signing of the union cards last year by a majority of players, and Ohr's subsequent ruling, sent shock waves through college sports that has already prompted greater benefits for players at the center of the multibillion-dollar commercial enterprise. Major conferences have begun guaranteeing four-year scholarships, at full cost of attendance, and in some cases have enhanced medical benefits for injuries that extend beyond their years on campus. Colter and CAPA's push for athletes to have a voice in college sports prompted the NCAA in January to add a dedicated seat for an athlete representative on the 24-member NCAA Division I Board of Directors -- though Huma notes the power still lies with the presidents and institutions that they play for.

Separate from the union effort, the Ed O'Bannon antitrust lawsuit went to trial in the wake of Ohr's ruling. O'Bannon won at trial, with U.S. District Judge Claudia Wilken ruling the NCAA had violated federal laws by prohibiting universities from compensating football and basketball players -- the athletes at the center of the commercial enterprise -- for use of their names, images and likenesses. She issued an injunction and stated that the NCAA must allow each school to pay them up to the cost of attendance plus as much as $5,000 per year for their licensing rights, collected in a trust fund and distributed after they leave college.

The NCAA appealed the ruling and is awaiting a decision from the Ninth Circuit Court of Appeals. The governing body for college sports has been ordered to pay $46 million in attorney fees and legal costs to O'Bannon's lawyers. Players are not asking for damages, though some of them do have access to a $60 million settlement in a related lawsuit tied to video games that reportedly could provide them with anywhere from $150 to $7,000 depending on how often players appeared in the now-discontinued NCAA video game.

"This is really a case where they may have lost the battle, but won the war," said Nellie Drew, a University at Buffalo professor of sports law who previously served as outside counsel for the NHL. "Kain Colter has a lot to be proud of. This has had ramifications which are spreading throughout the NCAA, not just for football, but across the board. Conditions have improved substantially."