Labor Updates: Recent NLRB Rulings on Scope of Union Bargaining Units, NCAA Athletes

As we’ve previously reported, the National Labor Relations Board (NLRB, or the Board) under the Biden administration has been issuing decisions that are more union-friendly and less favorable to employers. Earlier this month, the Board reversed a Trump-era decision that gave employers more leeway in challenging unions’ proposed bargaining units. The same week, an NLRB regional office issued a complaint asserting that the National Collegiate Athletic Association (NCAA) may violate the law by failing to treat certain student athletes as employees. Both decisions are in line with the current NLRB majority’s pro-worker and labor-supportive agenda, with potential implications for both unionized and non-unionized employers. 

NLRB reinstates Obama-era standard of review for determining a “community of interest” for bargaining units 

On December 14, in the case American Steel Construction, Inc., the Democratic-majority NLRB overruled a Trump-era decision that subjected labor unions seeking to represent an employee bargaining unit to a heightened standard of review and lowered the prevailing standard for employers to challenge unions’ proposed units. In its place, the NLRB reinstated an Obama-era ruling that established a framework of review making it easier for labor unions to petition for a bargaining unit and harder for employers to challenge a union’s proposed unit. 

In American Steel, the NLRB reverted to the standard articulated in Specialty Healthcare & Rehabilitation Center of Mobile (2011), which clarified that in order for a bargaining unit to be deemed appropriate, the employees in the petitioned-for unit must be readily identifiable as a group that shares a “community of interest.” Specialty Healthcare also held that if a party such as the employer argues that the petitioned-for unit is not appropriate because it excludes other employees who are not sufficiently distinct, that party must demonstrate that the excluded employees share an “overwhelming community of interest” to justify their inclusion in the unit.  

In 2017, in PCC Structurals, Inc., a conservative-majority NLRB overruled Specialty Healthcare and purposed to restore a traditional test. In so holding, the Board rejected the “overwhelming community of interest” bar for employers, arguing that it was too deferential to the petitioned-for unit. Under this view, the burden of demonstrating that the bargaining unit is sufficiently distinct should be placed on the petitioning employees, not the employer. In a 2019 decision Boeing Company, the Board further refined this standard and created a three-part test.  

In restoring the Obama-era standards, the current NLRB reasoned that unlike PCC-Boeing, the Specialty Healthcare framework “properly protected the statutory rights being exercised by employees seeking representation, while also requiring that the petitioned-for unit have a rational basis and the requisite community of interest to engage in effective collective bargaining.” The NLRB pointed out that Specialty Healthcare was consistent with the statutory policies of the National Labor Relations Act (NLRA) and had withstood numerous challenges in federal court, “with every reviewing court finding that the framework was consistent with the Board’s longstanding unit-determination test.” The majority rejected the dissent’s view that the Obama-era standard did not properly consider excluded employees’ presumed interest in participating in the election process. The majority argued that the point of the standard was not to find a perfect “Goldilocks” balance between the two supposedly competing interests of petitioning vs. excluded employees, but to evaluate more broadly whether there is a rational basis for the exclusion of certain classifications.  

With the NLRB’s reinstatement of Specialty Healthcare, employers will face a greater hurdle in challenging a union’s proposed bargaining unit in an election petition. This may increase the likelihood of unions prevailing in elections, as unions typically will seek to define a bargaining unit to maximize the potential level of union support within the proposed bargaining unit. Under this restored standard, the NLRB calls upon regional officials to approve elections when the petitioned-for unit shares an “internal community of interest,” is readily identifiable as a group, and is sufficiently distinct. The employer must be able to show that included and excluded employees share an “overwhelming community of interest” in order to mount a successful challenge. 

NLRB General Counsel pursues “employee” status for NCAA football and basketball players 

On December 15, a regional office of the NLRB in Los Angeles announced that it may be issuing a complaint against the NCAA, the Pac-12 Conference, and the University of Southern California (USC), asserting that USC’s football and basketball players are employees covered by the NLRA. This finding was made in response to an unfair labor practice charge filed in February 2022 by the National College Players Association (NCPA), an advocacy group for college athletes, alleging unfair labor practices against USC for misclassifying college players as “student-athletes,” alongside other labor violations. Notably, the NLRB General Counsel’s office adopted the NCPA’s argument that these athletes are “employees” and that the NCAA and the Pac-12 Conference are “joint employers” of the athletes along with the university. The parties will have the opportunity to settle, but if no settlement is reached, the NLRB will move forward with a complaint against the NCAA, Pac-12, and USC. 

This latest complaint is consistent with a non-binding memo issued in September 2021 by NLRB General Counsel Jennifer Abruzzo, who opined that certain college athletes should be classified as employees under the National Labor Relations Act (NLRA). In the memo, Abruzzo invoked the U.S. Supreme Court’s unanimous decision in NCAA v. Alston (2021) which held that the NCAA’s amateurism rules restricting education-related compensation for student-athletes violated antitrust law by preventing athletes from receiving fair-market compensation. (We previously reported on that case here.) Abruzzo also cited Justice Brett Kavanaugh’s concurring opinion in that case, in which he advocated for college athletes’ labor rights and described the NCAA as a “cartel” suppressing those rights. As a result of the Alston decision, individual college athletes may now profit from the use and marketing of their own “name, image, and likeness” (NIL) although NCAA rules still prevent schools from paying athletes directly.  

In response to the NLRB regional office’s findings, Abruzzo stated that the decision to proceed with the current complaint affirms that many college players have been “unlawfully misclassified” as student-athletes rather than “employees entitled to protections under our law,” thus depriving players of “their statutory right to organize and to join together to improve their working/playing conditions if they wish to do so.” 

Notably, in 2015, the Board essentially “punted” (pun intended) on the issue of whether college athletes can be classified as employees under the NLRA when it unanimously denied an attempt by Northwestern University football players to unionize. The Board at that time did not determine whether the Northwestern players fit the statutory definition of employees covered by the NLRA and declined to assert jurisdiction over the case. At that time, the NLRB held that even if players could be classified as employees, addressing the case would run counter to the NLRA’s purpose of creating a stable labor environment for multiple reasons, including the fact that Northwestern, a private school, was the only school in the Big Ten Conference over which the NLRB had jurisdiction.  

It remains to be seen whether the current Board will adopt the same approach, or whether the erosion of the NCAA’s longstanding and increasingly untenable reliance on principles of so-called “amateurism”—as evidenced by the Alston decision and proliferation of college athlete NIL deals—will lead the Board to a different result this time.   

If you have any questions about these NLRB decisions or other developments in labor and employment law and how they might impact your institution, please reach out to a Franczek attorney.