Dartmouth Dining Hall Losses Reheat Basketball Union Push

One of the arguments Dartmouth College asserts in insisting the 15 players on the men’s basketball team aren’t employees is that the team allegedly operates at a loss.

A new story in The Dartmouth student newspaper reveals Dartmouth Dining Services, which employs unionized Dartmouth student workers, similarly operates at a loss.

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The finding highlights why the profitability of an employer is not a legal requirement for the recognition of employment, including in the context of college students who work for their school. It also underscores why profitability appears to be an especially unpersuasive line of attack for Dartmouth given the school has willingly negotiated with unionized student employees of a money-losing enterprise.

The Dartmouth story explains how a potential strike by the Student Worker Collective (the union representing dining services student workers) was averted after the union and Dartmouth reached a tentative agreement on a $21 per hour minimum wage—nearly three times the federal and New Hampshire minimum wage of $7.25.

The story also quotes the school’s dining director who emphasized Dartmouth wants to keep food prices at affordable levels to make sure its students are fed. The director noted Dartmouth Dining has operated at a loss the past three years.

In her Feb. 5 decision that recognized Dartmouth basketball players as employees and ordered a union election, NLRB regional director Laura Sacks discussed Dartmouth stressing the unprofitability of its basketball program. Dartmouth tried to distinguish the basketball players from Northwestern football players who attempted to unionize a decade ago. Despite generating revenue for their Big Ten school, Northwestern football players came up short in arguing to the NLRB they were employees. Dartmouth also contrasted its basketball players with Columbia University graduate students, whom the NLRB recognized as employees partly because the school received a share of students’ grants.

The basketball players attacked Dartmouth’s line of reasoning, noting key business decisions—including how much to pay Big Green coaches and how much to charge for game tickets—are determined solely by Dartmouth. The players also contested the school’s math as incomplete and misleading. Dartmouth’s calculation doesn’t include revenues generated by an ESPN broadcast contract or potential distributions from the March Madness tournament. Also excluded are the hard-to-quantify, but nonetheless recognizable, values attributable to the basketball team in boosting Dartmouth’s alumni fundraising, admissions and publicity.

Sacks suggested the debate over how to compute the team’s net gain or net loss doesn’t address whether the players are employees. “The profitability of any given business,” she declared, “does not affect the employee status of the individuals who perform work for that business.” To that point, many businesses operate at a loss but losing money doesn’t strip employees of employee-status.

Sacks wrote the relevant legal question is whether the players perform work for Dartmouth in exchange for compensation and the school has the right to control that work. Through that lens, she reasoned, the players are employees.

Although Dartmouth players, like other Ivy League athletes, do not receive athletic scholarships, but they are placed into a preferential admissions group and later receive valuable items including meals, tickets, apparel and sneakers as well as access to athletic facilities. Since Dartmouth provides its students need-based financial aid, a basketball player can remain at the school and receive aid even if he quits the team during his freshman year. The school also significantly controls players on account of their obligations to the team.

On March 5, the players will vote on whether Service Employees International Union Local 560 represents them as a union. Dartmouth is expected to appeal Sacks’ decision to the agency’s board in Washington D.C. in a dispute that could eventually be reviewed by a U.S. Court of Appeal and the U.S. Supreme Court.

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