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The prospect of student-athletes being recognized as employees became scarier for the NCAA last Thursday when the National Labor Relations Board (NLRB) issued its final rule on when a business is a joint employer under the National Labor Relations Act (NLRA).
The new test, which takes effect Dec. 26, will make it easier for workers to claim their business owes them their work — and could have implications for the NCAA and college conferences as the NLRB considers whether USC athletes deserve employee designation.
A joint employer shares employment responsibility with another employer or employers. They all have to agree with a worker and their union, and all can be held jointly and severally liable if someone commits an unfair labor practice or engages in other illegal acts.
Under the new test, as long as the business has the capacity to control the basic conditions of the worker’s employment (hiring, wages, hours, discipline, supervision, firing, etc.), the business can be considered a joint employer—even if its control is indirect and even if the business does not use this control. Under the current and expiring test, the joint employer must directly and immediately control the employment.
The development creates significant implications for franchisors and franchisees. Their workers will become better able to claim that they have two employers, the franchisor and the franchisee, even if only one decides work schedules, pay and working hours.
Unions are likely to gain more influence under the new test. Each joint employer will have to bargain with a union, which can play one employer off the other.
Co-employment may seem far removed from college sports, given that college athletes are not recognized as employees.
However, that could change through litigation or NLRB petitions, with colleges considered the athletes’ primary employers. The NCAA and conferences could then be considered joint employers of possibly hundreds of thousands of athletes.
Like franchisors, the NCAA and conferences likely share control over athletes because their rules limit how athletes “work” in college. This applies to classes and travel and whether athletes follow academic rules, eligibility rules, disciplinary rules and drug rules. A college, as a franchisee, may also run afoul of NCAA and conference rules in how it controls athletes.
Under the three-head employer model, colleges, conferences, and the NCAA would be required to negotiate employment with athletes who may be represented by a union or multiple unions (such as a sport, school, or conference, or a combination thereof).
This complex possibility is not hypothetical.
Next month, Administrative Law Judge Eleanor Laws will preside over an NLRB hearing in which the University of Southern California, the Pac-12 and the NCAA are represented as joint employers of the Trojans’ football players, men’s basketball players and women’s basketball players.
The laws won’t use the new joint employer standard — it can only apply to cases filed after Dec. 26. Additionally, the loser can appeal to the NLRB in Washington, D.C., and then appeal to a federal appeals court. Realistically, a final decision may not emerge until the second half of the 2020s.
But the stakes are huge.
If USC athletes who play one of these sports are considered employees, they may join a union or their teams may join different unions. Either way, USC will have to negotiate wages, hours and other terms of employment, including shares of revenue from television broadcasts and other licenses. Joint employers would do the same – ie. The NCAA and the Pac-12, or the Big Ten when USC joins them next year.
Then the domino effect will start and the chain reaction will be fast.
First, other USC athletes could and probably would claim to be employees given that they work a similar schedule. Then private college athletes near and far would make the same claim and point out that their schools have similar athletic profiles to USC.
Athletes at state universities would be in a different legal category because state labor laws determine whether they are employees. But even if they are not employees of their college, their conference and the NCAA, both of which are private entities and therefore governed by the NLRA, may work together. These athletes can then join alliances.
As employers of many thousands of college athletes, the NCAA may have to share revenue from the annual basketball tournament, which generates more than $1 billion, along with other revenue-generating activities.
Note that once athletes are considered officials, it’s game over for NCAA rules promoting amateurism and the student-athlete. The NCAA, conferences and colleges will have a legal obligation to bargain with their new hires, and each will be liable for monetary damages and injunctive relief if one refuses.
The new joint employer rule may also provide athletes with a second bite at the apple.
If USC, the Pac-12 and the NCAA are ultimately deemed non-employers, the decision will be based on an expired joint employment test. Don’t be surprised if athletes or those on behalf of athletes make the same arguments after the new joint employer rule goes into effect. Dartmouth men’s basketball players claiming their college as their employer show that athletes are ready to challenge their schools.
The perspective of the NCAA as a joint employer is not limited to NLRA controversies.
in Johnson v. NCAA, colleges and the NCAA are depicted as joint employers of Division I college students under the Fair Labor Standards Act (FLSA). The FLSA guarantees minimum wage and overtime pay. The athletes argue that if fellow work-study students, some of whom are also on scholarship, are paid to work at sporting events, the athletes working at those games should be paid as well. The FLSA has its own test for joint employment and is more permissive than that of the NLRA.
Times are changing in college sports, and unless the NCAA proactively changes the rules, it will likely watch the legal system force changes.