The Employer's Legal Resource: Employment Law in the Wide World of Sports

05.01.14

Labor and employment laws apply to employers in all fields, industries, and sectors. The sports industry is no exception. 2014 has seen a wave of employment litigation and disputes between amateur and professional athletes and their employers.

The most publicized, and potentially influential, sports employment dispute involves an attempt by scholarship football players at Northwestern University to form a union. In February, Northwestern football players, assisted by the United Steelworkers, filed a petition to form a union with the National Labor Relations Board. In a detailed and thorough opinion, the regional director of the NLRB in Chicago ruled in favor of the Northwestern football players. Relying on the revenues and benefits received by Northwestern because of its football players, the hours spent by players on football activities, and the control exerted by coaches over players, and the financial benefits received by players, the NRLB ruled that the Northwestern football players are university employees are entitled to form a union. Northwestern requested a review of the decision arguing that scholarship football players are not "hired to perform services," their financial aid does not constitute compensation, and the institution of rules and discipline does not convert them from students to employees.

However, the NLRB's ruling has a limited impact. The Northwestern decision would only affect private universities. It would not affect the forming of unions at state universities such as OU or OSU, where public employee unions are governed by each state's laws. It is unknown if large public employee unions, such as AFSCME, will push state university athletes to unionize. Regardless, the NLRB's decision could be a historic first step leading to workers' compensation benefits for college athletes, collective bargaining over working conditions such as practices and training, and, ultimately, the payment of wages.

On April 25, scholarship players voted to determine whether they will form a union. Because the NLRB granted Northwestern's request to review the decision, the votes will not be made public until following the review. A majority vote is required to form a union.

Wage issues have become a hot-button topic in the world of sports, as well. In January, the Oakland Raiders' cheerleaders filed suit alleging the team failed to pay them minimum wages and took unlawful deductions from their pay, in violation of federal and California law. The "Raiderettes" alleged that they are only paid $1,250 for working 10 home games each season, amounting to less than $5 per hour when rehearsals, charity events, and photo sessions are factored in. They also allege the Raiders violated California and federal law by requiring them to pay for their own travel costs, and purchase team-mandated cosmetics and other items, failing to pay them at least twice a month, and by contractually forbidding them from discussing their pay. In February, the Cincinnati Bengals' cheerleaders filed a similar suit alleging they spend more than 300 hours per year working for the Bengals, but are paid far less than the Ohio minimum wage. The Bengals' cheerleaders' complaint contains similar allegations regarding payment for transportation, specialized clothing, make-up, and other gear for which they are not reimbursed. It is unlikely the Raiderettes and Bengals' cheerleaders will prevail on their federal law claims. Section 13(a) of the FLSA provides an exemption to minimum wage requirements for employees of an amusement or recreational "establishment" that "does not operate for more than seven months in any calendar year." However, because there are no state law exemptions, it is likely that the cheerleaders' state law claims will survive any motions to dismiss and proceed to discovery.

The non-payment of wages and overtime has not been limited only to cheerleaders. In February, a group of former minor league baseball players sued Major League Baseball alleging they are paid less than minimum wages and forced to work without pay in violation of federal and state laws. According to their complaint, most minor leaguers earn between $3,000 and $7,500 per year and are not paid for training. The players also allege they are not paid during the off-season, even though they are required to perform labor for the team. While major leaguers are members of the powerful and successful MLBPA, minor league players are not allowed to join the union, even though the uniform contracts they sign are governed by any agreements between the MLBPA and MLB. They seek back pay damages and an injunction requiring that MLB and its teams comply with applicable labor and employment laws. Much like the lawsuits filed by NFL cheerleaders, the success of the class of minor league baseball play ers may hinge on whether they are classified as "seasonal employees." It's not just athletes, either, who are suing major league teams. The San Francisco Giants recently agreed to pay $545,000 in back wages to clubhouse and administrative employees who asserted claims for wage, overtime, and recordkeeping violations. The Miami Marlins are currently under investigation by the Department of Labor for improper use of intern labor.

While most of us do not work in the field of professional or amateur athletics, these claims and actions illustrate that no employer is immune from suit for violations of federal and state employment laws. Employers must be careful to not infringe on employees' rights under the National Labor Relations Act, including their Section 7 rights and their right to discuss their wages and working conditions. These claims also demonstrate the importance of ensuring all of your employees are properly classified, paid at least a minimum wage for all hours work, and paid timely as required by state law.

By Kenneth T. Short, kshort@dsda.com

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Rebecca D. Bullard

Rebecca D. Bullard

Rebecca represents clients primarily in labor and employment litigation and counsels clients regarding everyday employment matters. 

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