Game Changers: NLRB says Dartmouth College Men's Basketball Players Are Employees of the University

By: Alexandra C. Hains

“Because Dartmouth has the right to control the work performed by the Dartmouth men's basketball team, and the players perform that work in exchange for compensation, I find that the petitioned-for basketball players are employees within the meaning of the [National Labor Relations] Act.”

On February 5, 2024, a regional official of National Labor Relations Board ruled that the basketball players should indeed be recognized as employees of the university. This ruling paves the way for an election that could establish the first-ever labor union for NCAA athletes. The regional official’s decision was based on the premise that the basketball program benefits Dartmouth, Dartmouth exerts control over the work performed by the basketball players, and that the basketball players receive compensation for their services, thus meeting the criteria for employee status under the National Labor Relations Act, which only governs private employers.

Benefits to Dartmouth

In its argument to the NLRB that the basketball players should not be classified as employees, Dartmouth focused on the fact that the basketball program has operated at a loss for the past five years. The regional director did not agree with Dartmouth’s argument that the basketball players are not employees because the program loses money. The regional official held that, as with any other business, “the profitability…does not affect the employee status of the individuals who perform work for that business.” Instead, the regional official considered that the “the basketball program clearly generates alumni engagement—and financial donations—as well as publicity which leads to student interest and applications” and that Dartmouth’s “Athletic Department has its own business office, fundraising department, marketing department, and brand management department to handle the revenues and publicity generated by Division I intercollegiate athletics.”

Control over Basketball Players

The regional official determined that Dartmouth exerts significant control over the basketball players’ work through the following means:

The players are required to provide their basketball services to Dartmouth only.
The Student-Athlete Handbook in many ways functions as an employee handbook, detailing the tasks athletes must complete and the regulations they may not break.
Dartmouth determines when the players will practice and play, as well as when they will review film, engage with alumni, or take part in other team-related activities.
When the basketball team participates in away games, Dartmouth determines when and where the players will travel, eat, and sleep. Special permission is required for a player to even get a haircut during a trip.

Compensation

The regional director concluded that the basketball players are compensated for their work through the following methods:

Players benefit from “early read” for admission prior to graduating high school, an Ivy League rule that allows member institutions to provide recruited athletes with an estimate of their financial aid in January of their junior year in high school. While a player will not get an athletic scholarship, a player who chooses Dartmouth will receive as much financial aid as his family requires, up to and including the full cost of attending Dartmouth.
Each year, each player receives six pairs of basketball shoes (valued at $1,200); lifting shoes; travel shoes; a backpack; a duffel bag; unlimited socks; three hoodies; a zip sweatshirt; a quarter-zip shirt; two pairs of athletic pants; compression undergarments; a long-sleeved shirt; approximately ten short sleeved shirts; a windbreaker; three pairs of shorts; and showering shoes. Every other year, the players also receive a Nike parka with Dartmouth’s logo; a Nike hat with Dartmouth’s logo; Nike Dartmouth polos; practice gear; and a large travel bag. The players estimate that in 2023, the equipment was valued at $44,242 or approximately $2,950 per player.
Each player receives four tickets for each home game and two tickets for each away game which have an estimated value of $1,200 over the course of a 30-game season.
Dartmouth pays for all travel, lodging, and meals required for away games.
Dartmouth provides room and board and parking for each player during the six-week break from mid-November until early January.
The players receive other fringe benefits, including academic support, career development, sports and counseling psychology, sports nutrition, leadership and mental performance training, strength and conditioning training, sports medicine, and integrative health and wellness.

What’s Next?

Dartmouth can appeal the regional official’s decision to the National Board. In the meantime, an election can be held, and ballots counted while an appeal is pending.

In 2015 when the NLRB decided not to rule in the Northwestern football team union case, the board did not actively overturn the ruling from the NLRB’s Chicago regional director that the players were Northwestern employees. Instead, the board declined jurisdiction citing the impact a Northwestern union would have on the NCAA as a whole because the board does not have jurisdiction over state-run colleges and universities which constitute 108 of the roughly 125 Football Bowl Subdivision teams.

Will the Board rule the same way again? It could, but because Dartmouth is a member of the Ivy League, in which all eight schools are private and do not grant athletic scholarships, there is a greater likelihood that the ruling may be upheld.

Additionally, still pending before a different NLRB regional officer in California is a complaint that claims football and basketball players at Southern California should be deemed employees not only of the school, but also the Pac-12 Conference and the NCAA. Hearings resume in this case later in February.

We are closely monitoring this, and other legislative and regulatory developments related to the NCAA to assist both institutions and individuals in navigating the ever-evolving NCAA environment.

Weeding Out: Trouble for Federal Government Contractors

By: Kayla M. Jacob and Rachael Jeanfreau

Federal government contractors and subcontractors may not find it easy to roll with state legislation permitting medicinal and/or recreational marijuana use. In fact, attempting to comply with state law may come with high stakes for such employers. Here are a few tips federal government contractors and subcontractors should keep in mind:

Confirm status as a federal government contractor or subcontractor

Similar to a false positive on a drug test, there is the potential for “false” or erroneous classification as a federal government contractor or subcontractor. This determination may be impacted by various criteria, including different contractual thresholds, and subcontracting relationships.

Before grappling with the complexities of reconciling state marijuana legislation with federal laws and regulations, it is crucial for employers to verify their status as federal government contractors or subcontractors as not every relationship with the federal government results in a federal government contractor or subcontractor classification. This entails a thorough review of contractual agreements, engagement with relevant government agencies where necessary, and consultation with legal counsel.

Recognize and mitigate conflicts between federal, state and local laws

Marijuana remains a Schedule I controlled dangerous substance under federal law and is therefore illegal. This is true despite numerous states passing marijuana legislation permitting the recreational and/or medicinal use of marijuana. Yet federal government contractors and subcontractors are still subject to strict regulations and requirements imposed by the federal government, including drug-free workplace polices and compliance with the Drug-Free Workplace Act, among others. These strict federal regulations and laws may conflict with local and state laws on marijuana use. Such conflicts may create uncertainty for federal contractors and subcontractors who must comply with federal regulations while operating in states with differing marijuana laws.

For example, anti-discrimination laws that protect an employee’s off-duty marijuana use have been enacted in several states, including California, Montana, New Jersey, Nevada, Washington, and Louisiana. The scope of protection varies by state. While some states have included special exemptions for federal contractors and subcontractors in these anti-discrimination laws, such exemptions are not universal. As such, federal contractors and subcontractors may feel a tug-of-war between state and federal marijuana laws.

Federal contractors and subcontractors should work with legal counsel to determine how to address these challenges and mitigate any risks.

Understand the risks of permitting marijuana use

Federal contractors and subcontractors must also consider their contractual obligations and potential risks associated with permitting marijuana use. Failure to comply with federal regulations or maintain a drug-free workplace could result in contract suspension or termination, debarment as a federal contractor, loss of future contracting opportunities, or legal liabilities. As such, federal contractors and subcontractors must carefully review their contracts and ensure that their drug testing and discipline policies align with requirements therein.

Bottom line

The complex legal landscape surrounding marijuana is certainly felt by federal contractors and subcontractors. Until conflicts between federal, state, and local laws are resolved, federal contractors and subcontractors should remain informed and ready to seek legal aid in navigating the complexities of implementing drug policies at work.

Prompt and Effective Remedial Action Can Still Save You from a Sex Harassment Claim

by Jerry L. Stovall, Jr.

All HR professionals know that we need to act quickly and effectively when presented with a claim of sex harassment. But, it sometimes feels like we face liability if our responses are not perfect. Well, the Fifth Circuit Court of Appeals, (which is the Court of Appeals over Louisiana, Texas and Mississippi) has recently issued a ruling affirming the summary dismissal of a Plaintiff’s claims of sex harassment that spells out the enormous benefits of a prompt and effective response.

The ruling in question was issued in Johnson v. Board of Supervisors of Louisiana State University (January 8, 2024). The record contains some pretty damning facts against LSU. The Plaintiff, Ms. Johnson, is an African American female who worked at LSUHSC as an Administrative Coordinator in the Division of Animal Care. Ms. Johnson's desk was located in an open area connected to the offices of certain veterinarians, including Dr. Schumacher. Ms. Johnson introduced evidence that Dr. Schumacher slapped her on her buttocks (“the Incident”). Ms. Johnson also alleged that prior to the Incident Dr. Schumacher: (i) referred to her as “Boo”; (ii) looked down her blouse three or four times; (iii) talked about sex with African-American women with a coworker in Johnson's presence, including making a remark that “black women have big asses”; (iv) made daily comments about Johnson's appearance and perfume; and (v) suggested “getting together about five times.” (Like I said, pretty damning facts.)

Four days after the Incident Ms. Johnson informed her supervisor about the Incident. Her supervisor immediately sent an email to HR, informing them. Two days later Ms. Johnson’s supervisor asked her if she had heard from HR. When she responded that she had not, he personally took Ms. Johson to speak with an HR representative. The HR representative explained that since Ms. Johnson was staff and Dr. Schumacher was faculty, they had to wait for a specific Vice Chancellor to return from vacation to handle the complaint. (Waiting on a specific individual to conduct an investigation is obviously not a best practice.)

Immediately following her conversation with HR, Ms. Johnson was temporarily relocated away from Dr. Schumacher into an office close to her supervisor, which was located in a different building from the group she worked with. After four days, she was relocated to a storage room in the building that housed the group that she worked with. Ms. Johson testified that the storage room was full of bugs, smelled and had windows covered with black paper. (Stay with me people, LSU pulls this one out of the fire in the end.) When Ms. Johnson complained about the bugs and odor to her supervisor, he gave her six cans of bug spay, but did not move her.

The Vice Chancellor returned to work the day that Ms. Johnson was moved into the storage room. He investigated her claims for three weeks, and ultimately determined that they had merit. Ms. Johnson was informed that she would be allowed to return to her original office and Dr. Schumacher was moved.

A little over one year later, Ms. Johnson filed suit against LSU, alleging sex harassment, race discrimination and retaliatory harassment based upon the Incident, pre-incident conduct and her relocation to the storage closet, all in violation of Title VII. (Does anyone think that moving her to a stinky, dark, bug-infested storage closet was not a bad idea?)

The Trial court dismissed all of Ms. Johnson’s claims on LSU’s motion for summary judgment, and the Fifth Circuit affirmed its decision.

In affirming the trial court’s dismissal of Ms. Johnson’s sex harassment claim related to the Incident, the Fifth Circuit relied upon the facts that after learning of Johnson’s complaint about Dr. Schumacher, LSU took prompt remedial action that was reasonably calculated to end the harassment. The Court stressed that Ms. Johnson first made her complaint on Thursday, and that LSU moved her so that she did not have to interact with Dr. Schumacher the following Monday. The Court also noted that although it took LSU eleven days after Ms. Johnson’s complaint to HR to begin its investigation, LSU had a somewhat reasonable explanation for the delay, it did not have a history of similar complaints against Dr. Schumacher, it immediately separated Ms. Johnson and Dr. Schumacher, and its belated investigation was adequate.

In affirming the trial court’s decision to dismiss Ms. Johnson’s sex harassment claim related to the pre-Incident conduct, the Fifth Circuit relied upon the fact that Ms. Johnson failed to report Dr. Schumacher’s pre-Incident conduct to any supervisor or HR, and that LSU had no other reasons to know of his conduct. (LSU’s harassment policy saved it here.)

Last, in affirming the trial court’s dismissal of Ms. Johnson’s retaliation claim, the Fifth Circuit stressed that LSU proved a legitimate reason for moving Ms. Johnson to the storage room, to separate her from Dr. Schumacher, and that Ms. Johnson did not present any evidence that this reason proffered by LSU was a pretext. LSU introduced evidence that office space was limited and that Ms. Johnson needed to be near her group, and Ms. Johnson did not contradict either fact. Had LSU moved Ms. Johnson into a small, smelly, bug-infested office while other, better offices were available in the building, this result would probably have been different.

As you can see, LSU’s response was far from perfect, and a slightly different twist on one or two facts could well have led to a different outcome. But the overall finding is encouraging: even when faced with egregious employee conduct, an employer can still avoid liability by acting promptly and effectively. Although we may disagree on the promptness of LSU’s response, it was effective. The takeaway here: keep doing the best that you can as quickly as you can. Strive for perfection, but recognize that something short of that can also protect you from liability.