Student Athletes or Employees? The Constantly Changing State of Play

Transcript

Laura Pierson-Scheinberg

Principal, San Francisco and Baltimore

Hi, my name is Laura Pierson-Scheinberg, and I am co-leader of our Labor Relations Group. My office is in San Francisco and in Baltimore. I'm here with my colleagues Marvin Kaplan and Michael Bertoncini. Marvin, do you want to introduce yourself?

Marvin Kaplan

Principal, New York City

I'm Marvin Kaplan, and I am a new member of JL. I was the former Chairman of the NLRB and finished almost nine years on the Board, with every case you could think of shoving me in the eye.

Michael Bertoncini

Principal, Boston

I'm Mike Bertoncini, and I'm a principal in the Boston office. I'm a member of both the Labor Relations and the Education and Collegiate Athletics Groups. 

Pierson-Scheinberg

Today, we're talking about our student athletes under the NLRA and who will decide what happens to these students and whether they will be deemed employees. Gentlemen, why don't we kick it off with where we are now? Marvin, do you want to start?

Kaplan

It's an interesting moment for college athletes because the decision that is dictating where we are now actually came out in 2015 in response to an organizing drive at Northwestern. The interesting thing in particular about that case is that the regional director at the NLRB determined that the student athletes were, in fact, statutory employees under the NLRA. The Board, rather than addressing that finding in itself, said, "this is such a complicated area where you have private institutions and public institutions, so we're not going to take a position." We're going to punt and say we choose not to assert jurisdiction in this case. It's one of those rare cases where it's done. The other ones are like horse racing, and things like that made it very clear that they did not disturb the regional directors, finding that they were statutory employees. They made a clear statement that they would be interested in reconsidering whether they would assert jurisdiction if circumstances changed. 

Now fast forward to 2026, and back then the issues that they looked at were what the value of the grant and aid scholarships were, which made me laugh at the time because it was only $61,000. 

Pierson-Scheinberg

I wish $61,000 were what I pay for my kids. Woo!

Kaplan

We can all agree that certainly those have changed. Whether the scholarship was tied to athletic participation, the fact that the scholarships were year by year and all of those facts, just those three supported the finding that they were statutory employees. Now, we're in a completely different world. 

Mike, do you want to talk about where we are now?

Bertoncini

It's a lot different from what it was then. In fact, when you look at collegiate sports today, particularly when you're looking at football and basketball, it looks a heck of a lot more like an employer-employee relationship than it did before. In fact, it looks a lot to me like professional sports and the relationship the athletes have with the professional teams. For instance, you've got athletes making money in connection with their competitions, but also lots of money in connection with their name, image, and likeness.

Pierson-Scheinberg

I was a student athlete; I went to school on a golf scholarship, and I was with D3. Even at the D3 level, the amount of impact and control the coach has on your daily life. I'm dating myself, but this was a long time ago. Fast forward, my daughter is a student athlete now, and I steered her to D3 for that very reason, being able to have more of a life. What is really scary about this is that I played golf, and she plays women's soccer. There seems to be a focus on the larger sports and the impact that they may have.

What might happen, Mike, if a student accepts direct compensation?

Bertoncini

It certainly would be indicia under many of the tests, both on the NLRA and other employment laws of an employer-employee relationship. When you combine the control that you're talking about, Laura, with remuneration for performing, that begins to look more and more like an employee-employer relationship. You've seen the courts struggling with that, and by and large, coming out on the side of it is an employer-employee relationship. 

If you look, for instance, at the 2025 settlement in the House v. NCAA case, that settlement was approved, and it cleared the way for Division I athletes or schools to directly compensate student athletes and not just via scholarships, which is what we all grew up with, and that started on July 1^st, 2025.

Kaplan

Can I ask you a similar question, Mike, which is, the circumstances for transferability have also changed quite a bit, which wasn't even something that the Board was addressing in Northwestern. It wasn't even a factor. Can you give us more on transferability? 

Bertoncini

Transferability is again likened to professional sports. They're all free agents. If you look at the football situation, with all of these quarterbacks, it's like a free-for-all. Everyone's entering that transfer portal. We don't have any more of that one-year waiting period we used to have. You're seeing a lot of litigation over whether the NCAA can actually cap the eligibility period? If you look at the quarterback for the University of Miami team. He was at Georgia the year before. They're just moving like crazy. That's almost a sub-area of interest for sports fans. We're watching the movement as much as we're watching the competition on the field.

Pierson-Scheinberg

That's really interesting that you raised that, Mike. Even talking about the transfer portal and some of these issues. One of the things that we're hearing being raised is the joint employer relationship between the NCAA and the universities. Can you talk a little bit about that, Marvin?

Kaplan

That was a case brought in 2021 by then Jennifer Abruzzo. This had to do with USC, and she was making the case that USC and the NCAA were actually joint employers because they controlled terms and conditions of employment in a joint employer relationship. Given that the NCAA was an individual private body, not a public body, then theoretically, the NLRA would cover all parties that were part of the NCAA. The interesting part about that is what kind of framework does that create? If you control conditions of employment with regard to a portion of them, dictating how many games they play, how much practice they participate in, what kind of classes they have to take, and what kind of curriculum requirements are. It's interesting because you would have almost two systems within the same system. You have the NCAA, and a lot of the concerns of people on the outside were how do the terms for the private institutions not become the terms for everybody, right? Because it would lead to, how could you have one team playing 10 games and the other team playing 15 games? It just doesn't work out where you have to have some kind of consistency. The terms would be dictated by the collective bargaining rather than by the agreement of the NCAA.

Again, the interesting thing is that the case was eventually dropped in January 2025 when the administration changed. It colors what Mike was talking about; circumstances have changed a lot. We're no longer in the 2015 Northwestern world. We're in a whole different reality, which has led to not only new legislation federally, but also at the state level.

Pierson-Scheinberg

Before we get to that, can we talk about the NIL stuff? Mike, can you give us an update on the status of, first of all, for our audience, many know what NIL is, but first, what is NIL, and how does that fit into that? Can student athletes sell rights to their likenesses?

Bertoncini

They can, and they are. NIL, name, image and likeness, and what that looks like in the real world today. Endorsement deals, social media promotions, commercials, appearances, and branding collaborations. They're making money off their personal brands.

It's interesting to see because that's not necessarily limited to the bigger sports, football and basketball. There's the ability to be entrepreneurial there for those students, but they're making money on those personal brands. Think YouTube channels, TikTok, which I don't even know how to use, personal merchandising and clothing lines. They can be paid for services. They're working with NIL-only agents,  so not sports agents, but people acting as agents for how you're going to sell and make money off of your name, image and likeness. Then, you've got the NIL collectives and boosters contributing money and paying athletes for legitimate services. In some ways, you might argue there's a little bit more transparency around the big money that's always been associated with sports, but it is now flowing directly to the athletes in a manner that is today lawful.

Pierson-Scheinberg

My fear, though, is what it does to the college experience. It basically changes the college experience; it changes the athlete experience. As I said, I was a student athlete, and really, it monetizes it. I feel like there's plenty of time for that after you go out of college, but these are real big issues that have to be sorted out. 

Mike, earlier in the conversation, you mentioned the transfer portal and how that's changed. Are there any limitations on transfers between colleges now?

Bertoncini

Today, there are not. It's really the wild, wild west. We are seeing, if anything, more movement, probably at the college level, than we see today in professional sports, through the free agency rules, which have completely changed the environment, again, both from the student athlete perspective, for better or for worse. 

It seems to me not having been a student athlete other than club level rugby, you're giving students on the one hand the opportunity to earn money for the services or the performance they're providing and the revenue they're generating, but in a way that you could see being attractive to some student athletes as a moneymaker, even more so than getting their degree would be. When you look at some of the money available there, and I do think it changes both the college athletes' perspective and also that of the fans. Again, looking to just the recent past, Indiana and Miami – Indiana came out of nowhere and built that team over just three or four years, with a lot of movement through the transfer portal.

Pierson-Scheinberg

They also have a lot of funding. Anything to add to that, Marvin?

Kaplan

I think it's interesting too. Isn’t Duke suing its former QB for use after the transfer portal drama? I mean, that just didn't happen a few years ago. It just wasn't even possible in 2015. Now, you've got colleges suing athletes.

Pierson-Scheinberg

Let's talk about where this is going. Marvin, with your time on the NLRB and your interaction with the White House and some knowledge of where it's going from a tea leaf standing, what's next in this topic?

Kaplan

It bears considering that everyone is interested federally and at the state level in where this is going. We've had two separate bills, the College Sports Act and the Score Act, each of which included a provision that would say college athletes are not employees. You've had state legislation that has defined employees. Michigan is one to particularly note in 2025; they introduced legislation that would make all college athletes public employees in the state, regardless of whether they were at a private institution or not. Then, California has the Fair Pay and Play Act, which had a number of rules regarding designation, but didn't address the employee status specifically. It gives more context on whether they were employees or statutory employees or not. 

Pierson-Scheinberg

California keeps me busy.

Kaplan

The thing that has disrupted it most significantly recently is the president's issuance of the Saving College Sports Executive Order. In that executive order, the president directed agencies, including the NLRB and the Secretary of Labor, to clarify the status of college athletes under labor law. That's a big change. Again, Northwestern did not clarify the status; they chose not to take a position. What further complicates this is, again, as we discussed earlier, the Board did not disturb the RD's findings with regard to them being statutory employees, so that finding still stands from where we're sitting today.

What's interesting is that now with a quorum at the Board, we can all take a big sigh of relief. With a quorum, it could not necessarily address a change in precedent. Arguably, whether college athletes are exempt under the act or they choose not to assert jurisdiction would be a change in precedent, I would argue, under the three-member tradition. What they could do, and I've advocated for the use of it in other contexts, is they could address this through rulemaking. The Board has a tradition of allowing changes in precedent through rulemaking with two-member votes in the affirmative, as long as a quorum exists. The president has directed the agency to do this. The agency has a mechanism through which it could do this, and that mechanism will require notice and comment. An NPRM follows a notice of proposed rulemaking, followed by comments from interested parties, followed by responses to those comments and a final rule or whatever final rule they choose to adopt.

Where we are right now, you can expect a lot of interest and involvement from multiple levels with regard to addressing this issue, given that the president has directed them to address this issue. I would say the board is a bit in hot water if it's choosing to ignore a directive from the White House to address the issue.

Pierson-Scheinberg

How will the issue be addressed? It appears that the White House, based on the executive order, says they should not be employees. Do you think that's likely where this is headed?

Kaplan

The interesting thing is, I did not read the executive order as requiring a finding that they're not employees. I think it's a way to clarify the status of college athletes. Now, if the Board came down and said, yeah, they're employees, we would see a lot more involvement from different branches of the government, et cetera. I think they're going to have to go through the course to make that argument. That creates particular difficulty in the rulemaking process because they will have to provide an explanation for why they're not employees. As we've discussed at length here, and Mike did a great job of laying it out, that case is much harder than it was in 2015.

Bertoncini

The other thing that's interesting in that notice and comment period is that there's going to be a lot of voices over those 60, 90 days. When I talk to colleges and universities, there's often that reaction that we don't think they should be employees, and therefore, they shouldn't have collective bargaining rights. There are others, however, who say, at least through collective bargaining, there'd be some guardrails, some system, and we'd have a little bit less of a wild, wild west. I can see that point of view as well. Whether any school would come out and say that in a public comment, I don't know, but it is an interesting viewpoint.

Kaplan

As you guys know, in a rulemaking, you have to respond to all substantive comments. You can't just ignore the argument.

Pierson-Scheinberg

You took it out of my mouth. I was going to say you have to respond. I know if you don't, how it goes.

Kaplan

The court can overrule you for failure to respond to a substantive comment and kick out the rule. That's the thing, this creates a much different dynamic where you might not want to address something that someone raised, but in a rulemaking, you don't have a choice.

Pierson-Scheinberg

Anything more to add, Mike, before we wrap it up today? This has been a super fun conversation and a little bit outside of, you know, our typical lane, where we got to talk about something that's cutting edge and cool. 

Kaplan

We're always cutting edge and cool.

Bertoncini

Nothing other than more change is coming, and stay tuned. It's going to be interesting at the very least.

Pierson-Scheinberg

Marvin, the rulemaking king, what if they don't go with rulemaking on this idea? What would happen to it then?

Kaplan

Then, you have to wait for a case to come before you that raises the issue. The interested parties on the union side are being very strategic. That's one of the reasons they withdrew the joint employer case right at the beginning of the new administration: to avoid what they believe would have potentially been a negative determination from the NLRB. I would suspect a case directly on point on this issue is unlikely in the near future, which is why rulemaking is much more likely if it's addressed at all. Or you leave it to Congress to tell you whether they're employees or not, and we all shake our heads and go, OK.

Pierson-Scheinberg

We'll do a follow-up if we get any clarity on that. Gentlemen, it's always a pleasure. I really appreciate everyone's time, thanks very much, and have a great day.