College Athlete, Temp Worker Labor Board Cases Could Redefine Employee

U.S. regulators are poised to decide two closely watched cases that have the potential to reshape labor laws by allowing college football players to unionize and forcing companies to take more responsibility for contractors.

The National Labor Relations Board may decide the cases as soon as this week, and the prospect of change is already rankling university presidents and business leaders. One case concerns contract workers at a recycling facility who are trying to draw the owner into labor negotiations. The other would answer a petition from football players at Northwestern University seeking scholarship and medical benefits.

“The history of this labor board will be written as redefining who an employee is and who an employer is,” said Michael Lotito, a management lawyer at Littler Mendelson in San Francisco, who predicts the labor board will side with the unions. “This board is as activist as any board in history.”

Under President Barack Obama’s administration, the board has drawn fire from Republicans and business groups for decisions they say favor organized labor, including one shortening the process before a union organizing vote. Supporters, including Democrats, say the board applies labor laws correctly and is seeking to adjust to changes in the nation’s workforce.

The board doesn’t comment on pending cases.

The proceedings have been under review for more than a year, but Lotito said the board may rule before the departure of Republican member Harry Johnson on Aug. 27. Three Democrats and two Republicans make up the five-member board.

In a case likely to impact companies relying on temporary or contract workers, one of the nation’s most powerful unions is seeking to force more businesses to the bargaining table to negotiate wages and work conditions with these workers.

Business lobbies oppose the request, saying it would leave companies liable for labor practices that should be the responsibility of their primary employers. They’ve appealed to Congress, where Republicans are trying to block the board from acting.

The other case, if less meaningful to American businesses, has received more attention because it strikes at the heart of big-time college sports. It will answer the question: Are student athletes, who generate millions of dollars in revenue, employees of the school, and thus eligible for protections under the National Labor Relations Act?

In early 2014, the College Athletes Players Association tried to organize football players at Northwestern University in Evanston, Illinois, to negotiate for more scholarships, expanded medical care and other benefits. The players have voted, but the labor board impounded the ballots until it ruled on the case.

Even if the students voted no, a finding that they’re employees would set a precedent that other athletes might exploit with union drives of their own. The NLRB ruling would only apply to private schools, but state labor regulators that govern public universities may follow the board’s lead.

The labor board’s Regional Director Peter Ohr sided with the players in April 2014, saying the university exerts control over its team — a standard used to determine eligibility for a collective bargaining unit. Ohr found that players follow regimented schedules, are prohibited from living off-campus as underclassmen, and must accept Facebook Inc. friend requests from coaches trying to keep an eye on them.

The players also generated about $235 million over a nine- year period, Ohr said.

“It’s clearly a full-time job,” said John G. Adam, an attorney with Legghio & Israel in Royal Oak, Michigan, who represents the association.

Northwestern says that football is time consuming but part of the educational experience for its student-athletes. “It’s not a separate activity,” said Alan Cubbage, a spokesman for the school.

The university said in its appeal that a previous board finding — that graduate students weren’t employees because their responsibilities were “predominantly educational” — should apply in the case of football players too.

Six Republicans, including Senator Lamar Alexander, the chairman of the committee that oversees labor policy and a former president of the University of Tennessee, sided with the school. Calling athletes employees would “extend the agency’s reach into areas never contemplated by Congress,” they wrote in a brief sent to the board.

In the contract-worker case, the labor board is considering changing a standard it’s used for 30 years to judge whether a business is a “joint employer” of workers on the payroll of another company hired as a contractor.

The board’s resolution of joint employer status has sparked fierce lobbying by the National Association of Manufacturers and other groups against expanding the standard.

The federal review was triggered by a local teamsters union that represents workers at a facility in California owned by Browning-Ferris Industries Inc., a Houston-based waste-disposal company.

The union wants Browning-Ferris at the bargaining table along with Leadpoint Business Services, a staffing company in Phoenix that actually employs the workers.

At issue is the long-held consideration of a company’s direct control over workplace terms and conditions in determining its responsibility for the employees. The general counsel’s office of the labor board said in a brief filed in the case that the policy is outdated now that more U.S. companies rely on temporary and subcontract workers.

The current standard “inhibits meaningful collective bargaining,” and should be expanded to include a company’s indirect control over employees, the counsel’s office said. A staffing agency can deny wage increases by arguing that they’d lose a contract if they increased pay, according to the filing.

The U.S. had about 3.2 million workers, on average, in temporary positions in 2014, a 5.2 percent increase from the year before, according to the American Staffing Association.

Blocking Change

House and Senate appropriators are already moving to block the NLRB from making any change, though they attached provisions to spending bills Democrats oppose. No funds should be spent to “investigate, issue, enforce or litigate” a new joint-employer interpretation, the Senate bill says.

That appears to cover not only possible deviations from the current standard, but also separate charges the board’s general counsel has brought against McDonald’s Corp. as a joint employer of workers at affiliated franchises.

“Regulatory overreach from agencies like the NLRB is likely to jeopardize job creation and growth at a time when the country needs the opposite,” said Stephen Worley, a spokesman for the Senate Appropriations Committee.

Democrats are defending the board.

“The labor market has shifted dramatically,” and the labor board is right to “adapt to protect workers’ rights to collectively bargain,” Senator Patty Murray of Washington state, the Appropriations Committee’s top Democrat, said in a statement.