Recent NLRB Memorandum Argues that Certain College and University Student-Athletes Qualify as Employees and Should be Afforded Statutory Protections

The debate on whether college or university athletes should be considered as employees isn’t a new one, especially in light of coaches like Alabama’s Nick Saban receiving almost a $10 million salary. In fact, college coaches dominate lists of highest paid public employees in most states.

The conversation on the disparity between coach pay, revenue generated by the NCAA and higher education institutions from sports, and student-athletes seeking compensation for their participation is evolving. In July 2021, the NCAA adopted a new name, image and likeness (NIL) policy, by which student-athletes can be compensated for the use of their NIL. In addition, a recent memorandum by the National Labor Relations Board (NLRB) general counsel redefined the term “employee” as it applies to student-athletes. In the September 2021 nine-page memorandum, general counsel Jennifer A. Abruzzo takes the position that student-athletes are misclassified. The memorandum opens the door for students to be considered employees of a private university or college and have the option to unionize and participate in collective bargaining under the NLRB.

The purpose of the memorandum is to put private universities and colleges on notice of  NLRB’s pro-labor policy. NLRB doesn’t have jurisdiction over wages and compensation and cannot compel colleges and universities to pay student-athletes. The memorandum is not considered binding precedent, but Abruzzo’s reasoning indicates NLRB’s position should the right case appear before the board.

The Reasoning Behind the Memorandum

Abruzzo’s reasoning focuses on several key points, including misclassifying the term “student-athlete,” redefining the term “employee” in the context of an athlete, and the increasing social and racial justice activism occurring on campuses.

First, the memo argues colleges’ and universities’ use of the term “student-athlete” is an inherent  misclassification. This label prevents the athlete at a college or university from pursuing protection under federal law. Instead, Abruzzo calls on institutions to classify athletes as “players at academic institutions.”

In her second point, Abruzzo defines the term employee in the context of an athlete playing a sport at a college or university. “Players at Academic Institutions perform services for institutions in return for compensation and are subject to their control. Thus, the broad language of Section 2(3) of the Act, the policies underlying the NLRA, Board law, and the common law fully support the conclusion that certain Players at Academic Institutions are statutory employees, who have the right to act collectively to improve their terms and conditions of employment,” Abruzza asserts in her memorandum.

For example, a basketball player who plays on behalf of his or her private university and the NCAA performs a service by playing on the team and receives compensation in the form of a scholarship. The coach and staff dictate practices and general working conditions for the athlete.

Lastly, the memorandum also addresses the recent activism by students on campus. In the last few years, there has been an increase in participation in advocating for social and racial justice issues. She specifically highlights the Black Lives Matter movement and states that athletes who participate in such activism to improve working conditions should be protected from retaliation.

Precedent that supports NLRB’s recent memorandum

Abruzzo’s current memorandum essentially picks up where a 2017 memorandum left off. The NLRB, in GC 17-01, stated that Division 1 scholarship football players who competed in the NCAA at private colleges are employees, but declined to intervene. The memo was rescinded by the Trump administration, and the current Abruzzo memorandum reinstates the point that the football players at issue satisfy the definition of employee under Section 2(3) and the common-law agency test, in which an employee is “a person who performs services for another and is subject to the other’s control or right to control.”

In the June 2021 Supreme Court decision in NCAA vs. Alston, the Court unanimously upheld that a cap on education-related benefits for athletes violated antitrust laws. In his concurring opinion, Justice Brett Kavanaugh stated that college athletes “collectively generate billions of dollars in revenues for colleges every year. Those enormous sums of money flow to seemingly everyone except the student athletes. College presidents, athletic directors, coaches, conference commissioners, and NCAA executives take in six- and seven-figure salaries. Colleges build lavish new facilities. But the student athletes who generate the revenues, many of whom are African American and from lower-income backgrounds, end up with little or nothing.” Given this context, Kavanaugh suggests collective bargaining could be a solution to provide college athletes a fairer share of the revenue their institutions generate. This decision also indicates that the court is moving toward legislation that benefits the athlete playing for a private institution or college.

In addition, Abruzzo notes that players at academic institutions can now be compensated for the use of their NIL, similar to professional athletes.

What are the practical implications of the memorandum for public universities and colleges?

As it stands, the NLRB memorandum impacts only private universities and doesn’t apply to athletes in public universities. For example, in Michigan, where there isn’t a Division 1 private school, the public universities are subject to the jurisdiction of the MIchigan Employment Relations Commission rather than the NLRB.

There is a potential caveat since Abruzzo indicated that she might pursue a joint employer theory of liability to apply to public universities as well. She concedes that the current memorandum puts athletes at public universities out of reach, but if (potentially) an NLRB-covered entity is involved in the conditions or terms of employment, the joint employer liability theory might extend to these institutions. The current memorandum certainly opens the door to that possibility. Abruzzo explicitly states, “I will consider pursuing charges against an athletic conference or association even if some member schools are state institutions.”

For those institutions that fall within the scope of the memorandum, there will be more of an impetus to form unions. It is unlikely this development will occur immediately, but Abruzzo’s memorandum clearly sets up the possibility.

The underpinnings of the memorandum certainly challenge the current model employed by private universities and colleges as well as NCAA policy on compensation. If one college or basketball program started paying their athletes, what impact would this have on competition overall? Would the public universities feel the need to follow suit?

The NLRB position seems to embrace a pro-labor stance. The landscape of the student-athlete appears to be evolving, and clearly the colleges and universities – both private and public – need to be attuned to these changes.

If you have any questions, please contact Ryan Kauffman.


Fraser Trebilcock Attorney Ryan Kauffman

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters and representing higher education institutions. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.

NCAA Issues Interim Policy Allowing Student-Athletes to Monetize Their Name, Image and Likeness

The NCAA recently announced an interim policy that allows student-athletes from all three divisions to monetize their name, image and likeness (often referred to as “NIL”). The new policy went into effect on July 1, 2021.

The NCAA’s new interim policy was enacted on the cusp of laws in a number of states, such as Alabama, Florida, Georgia, Mississippi, New Mexico and Texas, taking effect which allow NCAA athletes to monetize their NIL.

It also follows a June 21 Supreme Court ruling that NCAA restrictions on “education-related benefits,” such as tutoring or scholarships, for college athletes violate antitrust law.

In a concurring opinion in the case, Justice Brett M. Kavanaugh wrote, “Traditions alone cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student athletes who are not fairly compensated.”

The NCAA guidance allows students to engage in NIL activities so long as they are “consistent with the law of the state where the school is located” and allows students in states without NIL laws to participate without breaking NCAA rules.

Michigan’s new law allowing college athletes to earn money from their NIL goes into effect December 31, 2022, pursuant to legislation signed by Governor Whitmer in December 2020.

What is Allowed Under the NCAA Interim Policy

  • Prospective student-athletes may engage in the same types of NIL opportunities available to current student-athletes under the interim NIL policy without impacting their NCAA eligibility. However, the NCAA warns prospective student-athletes to consult their state high school athletics association regarding questions pertaining to high school eligibility.
  • Student-athletes may use a “professional services provider” for their NIL activities.
  • A “professional services provider” includes, but is not limited to, an agent, tax advisor, marketing consultant, attorney, brand management company or anyone who is employed or associated with such persons.
  • Student-athletes may enter into NIL agreements with boosters provided the activity is in accordance with state laws and school policy, is not an impermissible inducement and it does not constitute pay-for-play.
  • International student-athletes may benefit from NIL activities.

What is Not Allowed Under the NCAA Interim Policy

  • Making NIL compensation contingent on enrollment at a particular institution
  • Allowing compensation for athletic participation or achievement
  • Permitting compensation for work not performed

Higher-Education Institution Responsibilities

In issuing the interim policy, the NCAA highlighted a number of obligations imposed on, and issues to be aware of by, higher-education institutions in connection with the policy.

  • Schools are obligated to apply, and report potential violations of, NCAA rules that remain applicable, including prohibitions on pay-for-play and improper inducements.
  • While the NCAA does not prohibit schools from arranging NIL opportunities for student-athletes, it cautions schools not to use NIL transactions to compensate for athletic participation or achievement or as an improper inducement. The NCAA also points out that involvement in arranging NIL opportunities may also raise other issues—including potential application of state NIL laws, claims for contractual non-performance, Title IX issues, and employment issues.
  • Schools are not permitted to provide compensation in exchange for the use of a student-athlete’s NIL.
  • While the NCAA interim policy does not require student-athletes to report NIL activities to their schools, state laws, conference rules and institutional policies may impose reporting requirements.
  • The responsibility to certify student-athlete eligibility remains with the school.

The interim policy will remain in place until federal legislation or new NCAA rules are adopted. If you have any questions about these issues and how they affect your higher-education institution, please contact Ryan Kauffman.


Fraser Trebilcock Attorney Ryan Kauffman

Ryan K. Kauffman is a Shareholder at Fraser Trebilcock with more than a decade of experience handling complex litigation matters. You can contact him at rkauffman@fraserlawfirm.com or 517.377.0881.