Making Sense of the Dartmouth Decision | Part 3

In Part One of our 3-part series, we touched on the background and landscape that led up to the Dartmouth decision. In Part Two, we explored the decision itself and pulled on the strings that the National Labor Relations Board (NLRB) left out there. Now, with Dartmouth in hand and the headwinds growing stronger for the NCAA, we’ll look at how this might unfold. 

The Legal Landscape

Will Dartmouth appeal? It seems likely, and we’ll know soon. The College requested additional time to consider its options and now has until March 5, 2024, to file an appeal, which, coincidentally, is the same day that the basketball team will be voting as to whether they would like to be represented by Service Employees’ International Union (SEIU) Local 560. 

As significant as that would be, it’s not much of a surprise. Let’s not lose sight of the fact that very soon, a local bargaining unit may be sitting across the table from the College’s leadership to collectively bargain. The writing has been on the wall since the NLRB’s General Counsel, Jennifer Abruzzo, issued a memorandum in September 2021, which essentially teed-up the very issues that the Region’s decision addressed in Dartmouth. 

But, big as it is, another decision looms on the horizon. The NLRB’s Los Angeles office issued a complaint in May 2023 against the NCAA, Pac-12, and the University of Southern California (USC), alleging that each had unlawfully misclassified college athletes as “student-athletes,” rather than as employees. 

The issues here could be potentially far more reaching than even the Dartmouth case, as the crux of the complaint focuses on whether the NCAA, Pac-12, and USC had “administered a common labor policy” regarding how athletes were treated on campus. Should a “joint employer” theory prevail, it could open the doors for bargaining on a massive scale. 

The USC hearing resumed earlier this week and a decision is expected in the next several months. As with the Dartmouth case, we suspect that the appeals process could postpone finality here for quite some time. 

Campus Conversations Moving Forward

What are campus leaders to do if athletes will be allowed to unionize on campuses, at least at private institutions, in the not-too-distant future? Answers may not be nearly as clear as you may think. Indeed, the entire athletic model at smaller institutions may be under review soon. Some questions to consider in answering this question: 

• Are athletics an enrollment driver?
  
  There are nearly 4,000 degree-granting postsecondary institutions and around 1,100 active members of the NCAA. For smaller, private institutions (fewer than 1,000 students or so), an athletics program helps fill seats and stabilize enrollment. This, of course, says nothing of the rich diversity that a robust athletics program adds to the campus environment. Changes to the nature of the relationship will place some of these schools in survival mode.
  
  These schools, already navigating tight margins, may face increased operational costs, legal complexities, and the need to reevaluate their athletic and academic offerings. This shift could necessitate a strategic overhaul, prioritizing compliance, and innovative engagement strategies to maintain the vitality of their athletic programs while safeguarding their institutional mission and financial stability.
  
  For large schools, the conversation may be different. The focus may be more granular, as they look to leverage resources to adapt to increased financial and regulatory demands, maybe even reinvesting in athlete welfare and compliance structures. The financial hit would sting, but the focus could shift towards enhancing the student-athlete experience, ensuring that programs remain competitive and compliant, while also exploring new revenue models to offset the potential rise in operational costs.
• What role do athletics play in fundraising?
  
  Quite a bit! Just ask Oklahoma State University, the University of Oregon, and University of Maryland, to name a few popular examples. But those donors – as with many – contribute to campus success far beyond the playing fields (and courts). Legendary North Carolina men’s basketball coach, the late Dean Smith, put it best: “I would prefer to play our games in a smaller, more intimate arena. But if we can double the number of people who have a chance to see our games, that means more people will feel they’re part of the university. And if they feel pride because of that, it benefits the whole school.”
  
  But, if student-athletes are employees, how might that change donor perceptions? It’s too big of a question to address here but perhaps the better question is – how might the approach from the institution change?
• Are our policies ready for reclassifying student-athletes as employees?
  
  The framework will be there for the most part, but the details may not be. Regardless of how certain arguments play out, there will undoubtedly be a need to consider implementing more rigorous health and safety protocols, as the compliance ceiling will rise considerably. Similarly, there will be a need to revisit employment policies, particularly those affecting recruitment, scholarships, playing time, and even termination of athletes. In addition to aligning policies with labor laws – and saying nothing of how a joint employer relationship may alter this – such policies will still need to meet your institution’s ethic of care.
• What about Title IX?
  
  The big one. Labor law, meet educational equity. Regardless of how this plays out, any shift toward employee status will necessitate that schools equitably compensate student-athletes. Easy enough, save for the existing disparities in revenue and visibility between men's and women's sports. In addition, a joint employer scenario involving the NCAA or athletic conferences, only serves to increase the complexity as these bodies could share liability and responsibility for compliance with labor laws and Title IX. 
  
  

As this plays out, we’ll revisit what we’ve covered here.

Stay tuned as our Athletic Compliance team follows developments in athlete employment status.