NLRB hearing begins weighing consequential athlete employee question this week

Amid widespread industry tumult, one existential question hovers over all others: Should NCAA college athletes be deemed employees of their universities?

One of the ongoing proceedings weighing that question – which could determine just how radically the college sports enterprise is reshaped in the coming years – takes another step forward beginning Monday in the National Labor Relations Board’s regional office in West Los Angeles.

All stakeholder eyes will be on developments that emerge from the in-person hearing – proceedings will not be available via Zoom – in the potentially seismic case addressing charges that the USC football and men’s and women’s basketball players are employees under the National Labor Relations Act. The complaint alleges the three charged parties – USC, the Pac-12 Conference and the NCAA – are joint employers. It also alleges they misclassified the players as student-athletes and maintained certain rules in the USC Student-Athlete handbook.

A growing number of leading stakeholders have told On3 that they believe college sports is on a slow march toward at least some athletes being deemed employees unless the NCAA secures its long-sought Congressional codification that athletes are not employees.

Employee ruling would create new NCAA era

An employee designation for some athletes would usher in an entirely new era, which could include collective bargaining and revenue-sharing. Opponents of the model say it could lead to athletes being fired and many schools cutting sports because they are unable or unwilling to handle the additional financial burden.

Shortly before unveiling the NCAA’s bold reform proposal – which would for the first time permit schools to directly pay athletes but stop short of an athlete employee designation – NCAA President Charlie Baker told On3: “Making all student-athletes a traditional employee would have tremendous negative consequences: student-athletes let go for a bad performance, or paying taxes on scholarships or room and board, and changing the relationship with teammates or coaches from the positive one enjoyed now to one where employees report to a supervisor …

“There is no question college sports has been slow to change. The NCAA is making real progress in delivering greater benefits to student-athletes and will continue to. But employment should not be one of those changes.”

Yet, some believe some athletes are already being treated as employees. All that’s missing is the formal designation.

“The athletes already are employees,” David Ridpath, a professor of sports business at Ohio University who has appeared before numerous Congressional committees regarding college athletics, told On3. “You can’t say someone is a student but then treat them as an employee without the requisite benefits.”

Not only proceeding on NCAA’s employee debate

The case involving USC, the Pac-12 and the NCAA marks the first complaint and unfair labor practice hearing since NLRB General Counsel Jennifer Abruzzo issued her headline-grabbing memo in September 2021 with her guidance on the employee status of college athletes. 

This week represents a key step in the case, but the process will take time. On Nov. 7, the hearing opened remotely via Zoom before presiding NLRB Administrative Law Judge Eleanor Laws but only addressed pretrial motions and subpoena issues.

This Monday through Wednesday, according to the schedule Laws provided, the General Counsel will begin arguing the case and calling witnesses. The hearing will resume in earnest from Jan. 22 through Feb. 2 with the General Counsel concluding arguments and witness testimony and respondents beginning their defense.

If necessary, the hearing will resume Feb. 26-29 for respondents to finish their defense and for both parties to address any outstanding hearing matters.

There are other ongoing proceedings nationwide to watch on the employee front. 

In Pennsylvania, plaintiffs in Johnson v. NCAA, former Villanova football player Trey Johnson and other Division I athletes are asking that athletes be deemed employees subject to the Fair Labor Standards Act. Additionally, a Boston-based NLRB regional director is weighing the question of whether Dartmouth men’s basketball players are employees and can conduct a union election.

Control over athletes key part of complaint

What may ultimately determine whether some athletes are deemed employees? At the heart of both NLRB cases is the issue of control and how much, if at all, schools exercise it over athletes.

The complaint against USC, the Pac-12 and the NCAA alleges in part that USC’s athlete handbook stipulates the extent to which athletes can engage with media. In a motion to dismiss the charges, USC asserted that it provides “guidelines,” but not “work rules” about how athletes engage with media. 

USC stated it encourages athletes to “make yourself available to the media” and that interviews are part of USC’s “educational experience.” It also stressed that USC does not “restrain the student-athletes’ ability to reach out to, respond to, or otherwise engage with the media in any way.” However, in recent weeks On3 emailed two USC spokespeople to ask if a single athlete – any athlete – from any of its teams would be “available” to answer a handful of open-ended questions about NIL and the state of college sports.

USC never responded.

Where do athletes stand on employee question?

Where some current and former athletes stand on the question has been a matter of debate.

Baker testified during the 10th Congressional hearing in October that he’s talked with some 1,000 athletes since he assumed his role in March, and not one told him they want to be a university employee. That anecdotal snapshot stands in contrast with polling conducted by Bill Carter with Student-Athlete Insights of just under 1,100 athletes between Oct. 22 and Oct. 27 – 73% said they’d be in favor of employee status. 

Consider the perspective of Alex Glover, an All-AAC volleyball player at SMU with more than 40 NIL deals and intern experience at CBS Sports. Glover told On3: “I don’t feel athletes should be university employees. I believe that scholarships, stipends along with the opportunity to monetize your name, image and likeness are all good examples of ‘payment’ for the student-athlete while representing the said university.”

And weigh the views of Tori Ortiz, a former Oklahoma State track athlete who finished her career with the highest On3 NIL Valuation in the sport. Ortiz told On3: “I believe athletes should be ‘university employees.’ Athletic programs bring in so much money to the university, and NIL deals aren’t promised to everyone. If you are an employee, then they’d have to get paid, and even something as small as a stipend to the players who don’t get much love could go a long way.”

Industry stakeholders are grappling with myriad questions that such an employee model would unlock – in addition to both known and unknown consequences on all athletic levels.

If an employment model takes hold, Greg Sankey, the SEC commissioner, told On3 that Division III athletic directors have told him, “We wouldn’t exist.” Sankey then asks the ADs, “Your Division III program wouldn’t exist for athletics?”

They answer: “No, no, our university. Our college wouldn’t exist because of the enrollment model.”

Employment status would user in ‘professional relationship’

Joe Castiglione, Oklahoma’s athletic director, said if college sports moves to an employment model, it ushers in a professional relationship between school and athlete. That, he said, raises questions about how the traditional recruiting process could be redefined or rendered obsolete. 

“Right now, we recruit. Professional leagues draft,” Castiglione told On3. “Will we end up dictating where students go to school? Are we looking at salary caps? Will every student-athlete at every level pay taxes on their scholarships?”

More broadly, Tom Wistrcill, the Big Sky Conference commissioner, told On3 that an employee model would be “devastating,” adding that an array of consequences – from hiring and firing athletes to tax implications and union issues – would be “catastrophic.”