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College Athlete Union Push Arrives as Schools Face Budget Clouds

Michael McCann
·7 min read

As college athletes advance toward recognition as unionized employees, their employing schools will face three choices: embrace, resist or cut.

Embrace means the school accepts the new reality and bargains terms of employment with their athletes. This is not yet the world those schools live in, but it could arrive within the next couple of years.

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Per the recent order from NLRB regional director Laura Sacks, Dartmouth men’s basketball players are employees within the meaning of the National Labor Relations Act. On Mar. 5, the players will vote on whether Service Employees International Union Local 560 represents them as a union. As Sportico explained, Dartmouth will likely petition to table the vote taking effect, or impound the vote, until after the school’s anticipated appeal to the agency’s board is decided. The appeal process could last into 2025; subsequent appeals to a U.S. Court of Appeals and the U.S. Supreme Court could elongate the timeline into 2026 or 2027. Similarly, the ongoing NLRB review of whether USC football and men’s and women’s basketball players are employees within the meaning of the NLRA could last several years.

There is an added layer of complexity since the employment of athletes at public universities is governed by state laws, including laws that prohibit or limit opportunities for public employees to unionize. It’s possible those public university athletes’ conferences and the NCAA could be deemed the athletes’ joint employers under the NLRA, which would enable them to unionize and bargain with their conference and NCAA.

College athletes could also be deemed employees under a different federal law—the Fair Labor Standards Act. The players in Johnson v. NCAA, which is currently before the U.S. Court of Appeals for the Third Circuit, are seeking that outcome. If the players prevail, they will be owed at least minimum wage and overtime pay consistent with their schools’ employment of students through work-study. Colleges would also owe backpay to current and former athletes.

Two other federal appeals courts—the Seventh and Ninth Circuits—rejected college athlete FLSA cases, but that was before long-standing NCAA arguments on behalf of amateurism were sharply rebuked by the Supreme Court in NCAA v. Alston (2021) and before NIL.

There remains a lot to work out in what is a complicated situation. But odds are, college athletes will eventually be recognized as employees of their schools and some of them will unionize.

Colleges will fret at the prospect of paying collegiate-athlete employees. They’ll claim they’re already losing money on athletics and can’t afford to absorb hundreds of new employees. Depending on the nature of the athletes’ employment, colleges could have to pay wages, health care, retirement contributions, workers’ compensation insurance and various employer taxes.

The timing couldn’t be worse for colleges. The college-athlete population in the U.S. is projected to “shrink dramatically beginning in 2025 and lasting until 2037” due to declining birth rates. With lower overall enrollments, colleges will take in fewer dollars from tuition (and from meal plans, housing and student fees etc.) unless they raise the price on students and their parents. At many colleges, faculty and staff hiring is expected to slow considerably as schools prepare for fewer students.

These are not good times in higher ed, especially for the prospect of enlarged labor costs.

Some colleges will be better equipped to handle paying collegiate-athlete employees. Even if those schools claim to be losing money on athletics, they’d privately admit net profit/loss calculations do not capture the transformative impact athletics can have on fundraising and enrollment. Some alums give money to their school because of their fandom and support of teams. Some high school students partly pick their college based on the prominence of its athletic program and the sense of community it builds.

It’s also worth considering why colleges “lose” money on athletics. Some pay high salaries to coaches and athletic directors. Others invest in modernizing athletics facilities. Paying coaches less and spending less on facilities would presumably free up some money.

Colleges are also accustomed to employing students through work-study (some of whom are on scholarships) and even collectively bargaining with them, even though college athletes becoming employees is sometimes depicted as a scary or exotic idea. Many colleges have adopted comprehensive policies for student employment, including such topics as tax consequences and employment eligibility of international students. Some colleges are also familiar with student labor negotiations; Dartmouth, for example, bargains with a union for students employed in dining services.

So, some schools will embrace reality and employ athletes. It’s even possible, as I wrote in my sports law column last week, a forward-thinking college president could recognize their athletes as employees before the NLRB and court process plays out and effectively dare their school’s conference and the NCAA to sue for breach of contract.

But other schools will resist.

Under labor law, an employer is required to meet with an employee’s bargaining representative following unionization. The two sides are supposed to engage in good faith discussions about the many facets of employment, from wages to vacation time to drug testing to workplace safety.

A school knows it could risk an unfair labor practice charge by outright refusing to bargain, but it might instead slow-walk negotiations with the athletes’ union or offer unappealing terms. The union could then file an unfair labor practice charge that the college is refusing to bargain in good faith, which would set off a legal process that could last months or longer, and possibly involve an impasse (when both sides regard further negotiations as a waste of time and energy). The athletes could also go on strike, but in that case, those on athletic scholarships could potentially forfeit them.

Some schools might also cut athletic teams or altogether terminate their athletics program, perhaps converting varsity teams into club teams, which receive minimal, if any, school funding. Any moves along those lines could trigger a bevy of legal consequences, but the school would be on stronger labor law grounds by cutting all programs instead of just a few. While labor law protects workers against partial closures (like closing one store in a chain) it can’t force a business to continue operations when it seeks a full closure.

But if a school converts varsity teams to club level, it would need to clearly distinguish the club team from its varsity ancestor. Merely calling a team “club” but treating the players as if they were varsity, especially in terms of controlling of their time and schedule and pushing them prioritize sports over academics, could lead club players argue they too are employees.

A school that cuts teams must do so in compliance with Title IX, a federal law guaranteeing that male and female college students are treated equally and fairly. Although there are different methods of complying with Title IX, a school that terminates teams in ways that lead to a disparity in participation by sex or a disparity in funding of teams could run afoul of Title IX.

Labor law implications are also key. Some have opined that if Dartmouth men’s basketball players succeed in unionizing, the school will simply ax the team. The law would say not so fast. The players could argue the team’s closure constituted unlawful retaliation for unionization. The NLRB could issue a complaint against the school and demand it keep the team constituted. In a similar vein, the NLRB recently challenged Starbucks for closing stores allegedly because the staff unionized.

There could be other kinds of legal fallout, too. A school might have signed lucrative employment contracts with coaches and the athletic director. If the school attempts to extinguish those contracts, the affected employees could sue for breach of contract and on other grounds. The same problems could surface with university licensing, facilities and construction contracts that are predicated on there being varsity sports.

Besides legal considerations, a school would need to think carefully about how cutting a team or an entire program would harm the school’s reputation—including with alumni, donors and both current and prospective students. A core reason for the economic growth of college sports is that schools believe it supplies a return on the investment in terms of marketing, fundraising and enrollment. Would a school want to walk away from varsity sports and risk seeming like a less impressive institution–especially at a time when, as mentioned above, schools will compete for a smaller pool of applicants?

These are challenging times for college presidents and between athlete employment and diminished enrollment, those challenges will only grow in the coming years. Just like in sports, quality of leadership will distinguish the winners from the losers.

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