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NLRB Counsel Lays Out Radical New Course

Oct. 7, 2021
Massive assault on employers embodied in memo saying college athletes are employees.

Analysis/Commentary

Jennifer Abruzzo, the new general counsel of the National Labor Relations Board (NLRB), recently wrote a memo declaring to the world that college athletes should be regarded as employees and paid accordingly.

But she uses that memo to begin laying out a whole new strategy distorting labor law in favor of unions and launching an enforcement assault on employers at the same time.

The ostensible purpose of the memo is to turn upside down how we view and universities manage students who are granted scholarships in exchange for performing college level sports. In the process, Abruzzo insists that the term “student athlete” was concocted by the National Collegiate Athletic Association (NCAA) with the deliberate intention to deceive, and she rejects its use in any context.

“While Players at Academic Institutions [PAI] are commonly referred to as ‘student-athletes,’ I have chosen not to use that term in this memorandum because the term was created to deprive those individuals of workplace protections,” she declared in her Sept. 29 memo.

The controversy over whether athletes in major college sports like football and basketball should be paid like professionals—and allowed to be organized by unions—has been around for quite a while. Abruzzo’s most recent memo reverses a position that had been taken by the board during the Trump administration, which had chosen to reverse the direction embarked upon by the Obama-era board.

Citing an earlier NLRB case involving Northwestern University football players, Abruzzo says she believes players are employees in situations where:

• The athletes performed a service for the university and the NCAA (e.g., played football), and generated considerable profit and other benefits for the university.

• The athletes received significant compensation, including financial support for the cost of tuition, room and board, and stipends for other academic and personal expenses.

• The NCAA controlled players’ terms and conditions of employment by establishing maximum practice and competition hours, rules concerning scholarship eligibility and minimum Grade Point Average requirements, and restrictions on the amount of gifts that players may accept.

• The university controlled the “manner and means of the players’ work on the field and various facets of the players’ daily lives to ensure compliance with NCAA rules.”

High Court Agrees (Somewhat)

Abruzzo may be on firmer legal ground than she would have been before this June when the U.S. Supreme Court justices chose to reject the NCAA’s antitrust defense that was based on the assertion that “amateurism” was the basis of college sports. Since then, although players are not yet being paid salaries, they have been able to receive any education-related benefits that were previously denied to them, such as being provided with laptops, tutoring or study-abroad programs.

Some of the implications of the court’s decision are continuing to be worked out. In July, the NCAA approved a names, images or likeness (NIL) policy allowing athletes to earn money through social media accounts (much like Internet influencers), teaching at camps or with lessons as well as the signing autographs, among other things.

“These changes, as well as increased collective action by college athletes across college campuses, in Abruzzo’s opinion, liken PAIs to professional athletes and entitle college athletes to the protections offered under the National Labor Relations Act (NLRA),” according to attorneys Steven Porzio and Elizabeth Dailey of the Proskauer Rose law firm.

In her memo, Abruzzo sought to make it thoroughly clear to the NLRB regional staff, universities and college athletes that complaints about the “Players at Academic Institutions” having been misclassified as “student athletes” who are now assumed to be entitled to federal labor law protections will be pursued vigorously by the board as independent unfair labor practices (ULPs) and violations of the NLRA.

The college athlete issue that dominates the memo is just one example of the policy shifts Abruzzo has announced since she was confirmed in late July on a split Senate vote of 50-50 following President Biden’s controversial firing of the Republican NLRB general counsel who was still serving a Senate-approved term. As soon as Abruzzo was sworn in, she lost no time in shooting off memos to the NLRB regional counsels and other staff asserting new policy stances that had not yet been weighed in on by the board members.

This seems to be a new strategy embraced by the Democrat majority on the board—dispatching the general counsel to declare their favored stances before having to engage in the slow-moving deliberative process of hearing and deciding individual cases to set precedents or, more rarely, utilizing the cumbersome federal rulemaking process.

In her memo declaring that college athletes must henceforth and forevermore be referred to as “Players at Academic Institutions,” Abruzzo also took the startling step of announcing major NLRB policy changes that she buried in the document’s footnotes, point out Porzio and Dailey.

In one of these, Abruzzo simply tosses off in passing her view that student teachers and research assistants are employees under the law, noting that she “will continue to maintain the prosecutorial position that student assistants, as well as medical interns and non-academic student employees, are protected.”

She also instructed regional directors to submit cases involving the application of Bethany College (where the Trump-era NLRB declined jurisdiction over religiously-affiliated educational institutions) and Velox Express (which found no violation of law where an employer misclassified employees as independent contractors) to Abruzzo for advice before issuing a decision.

More ominously for the prominent college athletic conferences, in another footnote Abruzzo said she would consider applying a joint employer theory of liability in some cases alleging violations of law, which means the NLRB would pursue charges against the NCAA and other athletic conferences that exercise control over the players.

Going After Employers

In a separate memo to the regional offices that Abruzzo chose to issue on Sept. 8, she instructed NLRB regions to aggressively pursue expanded remedies in a wide array of cases, and to prepare cases that the board can hear to expand the scope of damages imposed on employers for various infractions.

Her memo represents a stark departure from the types of limited ‘make whole’ remedies traditionally awarded by the board,” explain attorneys for the law firm of Jackson Lewis. “While there have been NLRB back pay awards stretching into the millions in some cases, those were extremely rare,” they say. “Employers should be prepared to face expanded remedies, especially increased monetary remedies, for violations before the board.”

The types of remedies specified by Abruzzo that would significantly increase costs employers face in ULP litigation include:

Consequential damages, front pay, and for discharged employees. NLRB regional offices are expected to affirmatively seek these expanded remedies in discharge cases.

Expanded union access. In cases involving employer ULPs during union organizing, required remedies include providing unions with employee contact information and allowing unions to hold “captive audience” employee meetings on company property.

Reimbursement of union organizing costs. New cases may seek to require employers pay business agent wages, attorney fees, travel costs and other costs unions incur where an employer’s objectionable conduct causes an election to be re-run.

Damages based on speculative contract termsAbruzzo wants to base monetary damages arising from refusal to bargain with a union based on what the employer speculatively would have agreed to in bargaining, had it bargained in good faith. Porzio and Dailey believe this likely will be a significant objective for both the general counsel and the Democratic board majority.

Public publishing of remedial notices in newspapers, website, and on social media. While the posting of notices about resolved ULP charges is standard practice, Abruzzo now encourages regional offices to publish them in local newspapers, company websites or social media pages, reaching audiences far beyond the employees impacted by any alleged violation.

Hiring individuals selected by the union. In the event an employee is judged to have been unlawfully discharged and then chooses not to return to work, Abruzzo wants regions to require hiring of a qualified applicant who is chosen by the union.

Regional oversight of bargaining. Bad faith bargaining claims should be remedied by things such as a rigorous bargaining schedule imposed by the NLRB regional office; employer-submitted progress reports; compelled mediation; managerial training; reinstating unlawfully withdrawn bargaining proposals; reimbursing a union’s negotiation expenses, and a possible ban on challenges to a union’s majority status (such as decertification or withdrawal of recognition) for at least one year.

Increased remedies and protections for undocumented workers. In cases involving undocumented workers, NLRB staff may seek visas or deferred immigration actions, permitting them to remain employed, and authorized to remain in the U.S. NLRB officials also could seek additional make-whole damages, such as forcing employers must pay into a fund to make sure employers are not “unjustly enriched” because of the undocumented workers’ status.

Abruzzo also instructs NLRB region offices to secure visits for inspections and assert discovery rights that result in compliance monitoring, longer posting periods, NLRA training for all employees, broader cease and desist orders, and public reading of notices by management officials to all employees.

To make sure that employees have something else to look forward to, Abruzzo promised that she is planning to issue another memo regarding settlements that could modify litigation strategies.

About the Author

David Sparkman | founding editor

David Sparkman is founding editor of ACWI Advance (www.acwi.org), the newsletter of the American Chain of Warehouses Inc. He also heads David Sparkman Consulting, a Washington D.C. area public relations and communications firm. Prior to these he was director of industry relations for the International Warehouse Logistics Association.  Sparkman has also been a freelance writer, specializing in logistics and freight transportation. He has served as vice president of communications for the American Moving and Storage Association, director of communications for the National Private Truck Council, and for two decades with American Trucking Associations on its weekly newspaper, Transport Topics.

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