Federal labor laws and student athletes

Authored by Katlyn Andrews, CIA

Student athletes: students or employees?

Many argue that student athletes are employees of their institutions – colleges and universities have control over aspects of their lives (e.g., their time spent at practice and competition, how their image is used for marketing initiatives and the apparel they wear), and depending on the program, student athletes may play a direct role in generating revenue through their athletic participation. However, student athletes do not currently meet any definition of “employee” described by the National Labor Relations Act or the Fair Standards Act and as a result do not have the right to unionize.

Proposed legislation

On May 27, 2021, Senators Bernie Sanders (I-Vt.) and Chris Murphy (D-Conn.) introduced a bill called the College Athlete Right to Organize Act. The bill aims to give student athletes the right to unionize by amending the National Labor Relations Act to include in its definition of an employee, “any individual who participates in an intercollegiate sport for an institution of higher education, and is a student enrolled in the institution of higher education” provided they meet the following requirements:

• The individual receives any form of direct compensation, including grant-in-aid (i.e., scholarship, grant or other form of financial assistance)
• Any terms or conditions of such compensation require participation in an intercollegiate sport

If considered employees with the right to unionize, student athletes receiving athletic aid could negotiate hours, working conditions, benefits (e.g., medical care) and pay.

While it is questionable as to whether the bill will be passed into law, it represents another development in the debate over student athletes’ rights, particularly around the right to profit from one’s name, image and likeness (NIL). It also puts additional pressure on the National Collegiate Athletic Association (NCAA) to react.

Challenges

While there are clear benefits of allowing student athletes to unionize (is anyone opposed to the health and well-being of student athletes?), the issue is more complex than it may appear on the surface. Some of the questions that come to light include:

• How would a union be organized and operated? For example, union dues are typically paid by the employee. However, student-athletes are “compensated” through grant-in-aid and do not receive a traditional “paycheck” from where dues could be deducted.
• How would the formation of a union impact institutions? Additional administrative duties (e.g., accounting, compliance and legal) may need to be assumed by institutions. The formation of unions could also put pressure on insurance policies. Schools are already losing policies that cover traumatic brain injuries.
• Would a union provide equitable treatment for all student athletes? With more than 480,000 NCAA student athletes representing over 1,000 schools in 24 sports, the student athlete experience will vary drastically. The challenges and inequities that may be experienced by a football player in a powerhouse conference are likely different from the experiences of a female gymnast. Furthermore, not all collegiate athletes receive athletic aid. Based on the definition introduced, only some student athletes would be considered employees and have the right to unionize.   
• Would a union be effective in negotiating with the NCAA? The NCAA is a member-led not-for-profit organization. Even with a revised definition of “employee,” the NCAA does not “employ” student athletes – the institutions do.
• Who carries the financial burden? Most colleges and universities do not directly profit from their athletic programs (e.g., through ticket sales or television broadcasting rights) and are limited in the resources that they can provide to student athletes. Recruiting disparities are likely to result if the burden is put on the institutions.

Baker Tilly can help

We can help your institution take a proactive approach to evaluate the current state of your policies, processes and internal controls related to athletics and the student athlete experience to identify opportunities that align with potential legislative changes.

For more information, or to learn how Baker Tilly can help, contact our team.