In February 2024, the regional director for the Region 1 office of the National Labor Relations Board (“NLRB”) ruled that the men’s basketball team for Dartmouth College (“Dartmouth”) are university employees, allowing the team to proceed with an election to unionize. This ruling came months after the men’s basketball team filed a petition to unionize and join the Service Employees International Union, Local 560 (“Local 560”), which Dartmouth challenged. After the ruling, Dartmouth submitted an emergency motion to stay the election or impound the votes. However, the motion was denied, and on March 5th the Dartmouth men’s basketball team held an official election and voted 13-2 in favor of joining Local 560.

This is not the first time that the NLRB has evaluated the employment status of college athletes. In 2015, the NLRB evaluated a petition to unionize from Northwestern University’s football team. The regional office ruled that the Northwestern players were employees, but the case was subsequently appealed to, and reversed by, the NLRB[1] based on jurisdictional grounds, leaving the issue of student-athletes as employees unresolved.

Joining a union could provide additional rights to the Dartmouth basketball players, such as the ability to negotiate for compensation or better working conditions. However, allowing student-athletes to join a union could cause ripple effects for other colleges and universities and their athletic teams.

This post outlines the key takeaways from the Dartmouth ruling; what this ruling could mean for Dartmouth, other student-athletes, and other universities; and the likely next steps for Dartmouth.

The Dartmouth Decision. In ruling that the Dartmouth basketball players are employees, NLRBRegional Director Laura Sacks posited that under the National Labor Relations Act (the “Act”) “employment” requires that an employer have the right to control an employee’s work, and that such work is “performed in exchange for compensation.” Regional Director Sacks held that, because Dartmouth has the “right to control the work performed” by the men’s basketball team and “the players perform that work in exchange for compensation” and for the benefit of the school, the members of the team are employees under the Act. Additionally, Regional Director Sacks found that, because the team members did not fall into one of the enumerated exceptions to employee status under the Act, they are employees, regardless of the fact that the players are also students or that the employer is an educational institution.

As evidence of Dartmouth’s right to control the team, Regional Director Sacks cited Dartmouth’s creation of a student-athlete handbook (which set specific parameters for the team outside of NCAA and Ivy League requirements) and control over when the team eats, sleeps, travels, reviews film, practices (including during the summer), and interacts with alumni.

With respect to compensation, Regional Director Sacks asserted that, while team members did not receive traditional wages, they have received compensation from the school in the form of fringe benefits (including gear and apparel valued at an estimated $3000 annually), free tickets to their games, and, most importantly, a highly coveted admission spot to a school that has a reported 6% admission rate. In its challenge to the organizing petition, Dartmouth argued that, unlike most other universities, it does not compensate players on its teams for playing for the school because it does not provide athletic scholarships. Rather, each recruited athlete receives an exclusive “early read” that determines the amount of academic financial aid that the athlete is eligible for, which can cover up to the full cost of attendance. Dartmouth also asserted that if it paid its athletes in gear, then some athletes would receive more or better gear than others. However, Regional Director Sacks rejected this argument and could not identify any precedent establishing that an employee’s status is determined by the size of their compensation in relation to their peers. Regional Director Sacks recognized that the NCAA regulations have “historically prohibited… traditional forms of compensation,” so it is understandable that student-athletes have not received direct compensation from the school in the past. Regional Director Sacks found, however, that the lack of direct compensation did not invalidate the fact that players are compensated for performing specific tasks (such as practicing and attending games) and receive fringe benefits, (like gear). In its petition, the men’s basketball team noted that most of the advantages they receive are not offered to non-athletes, and that such advantages were provided in exchange for the athlete’s performance, which in turn could generate revenue for the school.

Importantly, the new ruling does not require Dartmouth to begin paying wages to student-athletes because, as the decision noted, compensation under the Act could include many advantages such as fringe benefits and academic scholarships. Therefore, unionizing does not automatically entitle the men’s basketball team to better accommodations or wages. Rather, it will simply entitle them to union sponsorship, protection, and status.

Finally, as noted in the Dartmouth decision, the Act lists out exceptions to who can be considered an “employee,” with public-sector employees being the most relevant to this case. While some educational institutions can be considered public-sector employers if they primarily receive funding from the state and operate based on state laws, private schools – like Dartmouth – are considered a part of the private sector and thus their employees do not fall within the Act’s public-sector employee exception.

The Northwestern Decision. Before the Dartmouth ruling, the NLRB had only ruled on one other collegiate team’s petition to unionize. In that matter, which involved a petition filed by Northwestern University’s football team, Regional Director Peter Sung Ohr (Region 13) held that recruited football players who received grant-in-aid scholarships were employees, but that walk-on players (i.e., those who joined the team without being recruited or receiving a scholarship to play) were not employees because the walk-ons did not receive compensation. Regional Director Ohr noted that, in addition to the $235 million that the Northwestern football program generated in revenue within a ten-year span, the players also brought notoriety to Northwestern, leading to an increase in student applicants and alumni donations. After Regional Director Ohr’s ruling, the players voted to unionize, but the results of the election were not disclosed pending the appeal filed by the school. Northwestern appealed the ruling, and the NLRB reversed Regional Director Ohr’s decision and declined to assert jurisdiction over the matter. The NLRB chose not to address the substantive issue of whether the players were employees. Rather, it explained that it did not want to create a lack of uniformity by handling only one team at a time, given that the Northwestern football team was part of the Football Bowl Subdivision which included 125 other colleges and universities. Furthermore, Northwestern was the only private school within the Big Ten Conference, and the NLRB did not care to destabilize a conference for one team, while all the other teams, as public-sector employers, would not have been subject to the Act.

Regional Director Sacks stated in the Dartmouth decision that nothing in the Northwestern ruling precluded teams at private colleges and universities from being considered employees. Furthermore, there may be some key differences that could lead the NLRB to assert jurisdiction on appeal in the Dartmouth matter. In contrast to Northwestern, which was the only private institution in a conference of otherwise large state universities, Dartmouth College is in the Ivy League Conference, which consists of all private institutions, none of which award their student-athletes any athletic aid. Thus, an NLRB ruling that the Dartmouth men’s basketball team may unionize could potentially apply to the entire Ivy league Conference, opening the door for other student-athletes within the Ivy League Conference to unionize, either on a team-by-team or conference-wide basis. Conversely, if the NLRB rules in favor of Dartmouth on appeal or decides not to address whether the basketball players are employees (as they did in the Northwestern case) that decision could foreclose the right of other teams within the Ivy League Conference to unionize.

What Does It Mean for the Team to Join a Union? Assuming Regional Director Laura Sack’s decision is not reversed on appeal, the Dartmouth men’s basketball team’s vote in favor of joining Local 560 grants the team certain rights and protections under the Act. These rights include the right to engage in protected concerted activity (such as negotiating for compensation or better working conditions), without the fear of experiencing retaliation or discrimination from their employer. An employer’s interference with protected activity may subject the employer to unfair labor practice charges under the Act. Of course, employers are not required to acquiesce to all union demands. For instance, if the team engaged in an economic strike by refusing to play until they earn a certain amount in wages, Dartmouth may be entitled to replace striking athletes with bona fide replacements. However, if unionized employees strike due to an alleged unfair labor practice, the employer cannot discharge or permanently replace the striker.

Concerns with Classifying Student-Athletes as Employees. After the NCAA v. Alston case and the NCAA interim policy in 2021 that led to the ability for student-athletes to receive compensation for their Name, Image, and Likeness (“NIL”), there have been many challenges with ensuring that there is uniformity and fairness in how student-athletes receive compensation within the college NIL space. Those challenges became so prevalent that the Senate Judiciary held a hearing in the fall of 2023 to consider NIL and compensation issues, soliciting the testimony of athletic directors, the NCAA, the National College Players Association, and others. Even though the Dartmouth ruling did not specifically concern NIL for college athletes, part of the Senate Judiciary hearing examined the impact that classifying student-athletes as employees could have on colleges and universities.

One major concern raised by testifying witnesses at the hearing was the fact that most schools would not be able to afford to pay their student-athletes, especially Division II and Division III schools, who typically operate at a loss. Indeed, in its opposition, Dartmouth, a Division I school, argued that its basketball team was already operating at a loss before the ruling and could not afford to pay its student-athletes. The Division II and Division III representatives at the Senate Judiciary hearing insisted that if they were required to pay their student-athletes, they might have to discontinue their athletics programs altogether, and some colleges and universities with smaller athletic budgets might be forced to eliminate financial aid programs for student-athletes. They posited that by cutting their financial aid budgets in an effort to afford to pay their athletes, these schools might have to invest disproportionately on revenue-generating sports to supplement the income for all of the athletes. This could not only lead to the elimination of sports programs at some schools, but could also disproportionately affect women’s sports, which would invariably raise Title IX concerns.

Next Steps. Dartmouth filed an emergency request with the NLRB on March 1st to either delay the election, prevent the ballots from being counted until the employee matter was settled, or to impound the ballots after the vote until the NLRB ruled on appeal. Ultimately, Dartmouth’s request for relief was denied and, on March 5th,the Dartmouth men’s basketball team successfully voted to join Local 560. Although all fifteen players on the team signed the initial union petition, the vote was not unanimous, with two of the players voting against joining Local 560.

Dartmouth College has now submitted a request to the NLRB for review of the Regional Director’s decision and the election. The appeals process could take years to settle and could even make its way up to the Supreme Court. Dartmouth recently announced that if the NLRB refuses to overturn Regional Director Sacks’ decision, Dartmouth might engage in a “technical refusal to bargain,” which would be an unfair labor practice — and a way to send the case to a federal court. In the meantime, the Congressional Subcommittee on Health, Employment, Labor, and Pensions held a hearing on March 12th titled “Safeguarding Student-Athletes from NLRB Misclassification,” in an attempt to more pointedly address the issues of student-athletes becoming employees. We will continue to monitor the ongoing case.

*                      *                      *

This post was drafted with the assistance of Alexa Walker.


[1] Regional Director decisions can be appealed to the NLRB, which is typically a panel of three members but can consist of the full NLRB for novel or potentially precedent changing cases.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Priscilla Fasoro Priscilla Fasoro

Priscilla Fasoro represents clients on a wide variety of complex commercial transactions, specializing in those involving technology and data. In particular, her practice focuses on negotiating outsourcing and other technology-driven agreements, including services agreements for both service providers and customers. Ms. Fasoro represents…

Priscilla Fasoro represents clients on a wide variety of complex commercial transactions, specializing in those involving technology and data. In particular, her practice focuses on negotiating outsourcing and other technology-driven agreements, including services agreements for both service providers and customers. Ms. Fasoro represents clients in a wide array of industries, including technology services, public utility, automobile, consumer goods, airline, hospitality, banking, private equity, and fashion.

In addition to her technology practice, Ms. Fasoro has significant experience representing U.S. and international clients in a broad range of domestic and cross-border corporate transactions, including mergers and acquisitions, asset and stock purchases, capital markets, joint ventures, corporate governance, and general corporate and strategic matters.

Photo of Carolyn Rashby Carolyn Rashby

Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. Carolyn’s approach is preventive, while recognizing the need to set clients up for the best possible defense should disputes arise.…

Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. Carolyn’s approach is preventive, while recognizing the need to set clients up for the best possible defense should disputes arise.

As a senior member of Covington’s Institutional Culture and Social Responsibility Practice Group, Carolyn has co-led significant investigations into workplace culture, DEI issues, and reports of sexual misconduct and workplace harassment.

As an employment lawyer with over two decades of experience, Carolyn focuses on a wide range of compliance and regulatory matters for employers, including:

  • Conducting audits regarding employee classification and pay equity
  • Advising on employment issues arising in corporate transactions
  • Strategic counseling on a wide range of issues including discrimination and harassment, wages and hours, worker classification, workplace accommodations and leave management, performance management and termination decisions, workplace violence, employment agreements, trade secrets, restrictive covenants, employee handbooks, and personnel policies
  • Drafting employment contracts and offer letters, separation agreements, NDAs, and other employment agreements
  • Advising on employee privacy matters, including under the California Consumer Privacy Act
  • Providing guidance on use of AI in the workplace and development of related policies
  • Leading anti-harassment and other workplace-related trainings, for employees, executives, and boards

Carolyn also works frequently with the firm’s white collar, privacy, employee benefits and executive compensation, corporate, government contracts, and cybersecurity practice groups to ensure that all potential employment issues are addressed in matters handled by these groups.

Photo of Benjamin Block Benjamin Block

A commercial litigator, Ben Block is a nationally recognized sports lawyer with first-chair trial and appellate experience. On behalf of both sports- and non-sports clients, Ben often handles cases involving high-stakes requests for preliminary injunctive relief.