Northwestern University’s football team has the right to form the first labor union in college sports, the National Labor Relations Board ruled Wednesday.
All scholarship players on the Evanston, Ill., school's football team who have not exhausted their eligibility are "employees," Peter Ohr, the NLRB regional director in Chicago, said in his ruling. He ordered an immediate election to create a union board.
Northwestern said it would appeal the local ruling to the full NLRB in Washington.
The 24-page decision has the potential to alter the landscape of college athletics, which generates more than $16 billion in television contracts and other forms of revenue. It comes as the NCAA is under attack in separate lawsuits from former athletes that challenge its authority.
"It’s a very significant move," James Quinn, a senior partner at New York-based Weil Gotshal & Manges LLP, said in a telephone interview. "Given all of the other pressures on the NCAA and member institutions, things are going to change."
In the ruling, Ohr said the scholarship football players are employees because they come under the university's control.
Alan Cubbage, vice president for university relations at Northwestern, said in a statement that the school was disappointed by Wednesday’s decision, and that it would appeal the ruling and "explore all of its legal options."
"While we respect the NLRB process and the regional director's opinion, we disagree with it," Cubbage said. "Northwestern believes strongly that our student-athletes are not employees, but students. Unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes."
The NCAA, while not a party to the NLRB action, said in a statement that it disagrees with the decision and opposes a move to "completely throw away a system that has helped literally millions of students over the past decade alone to attend college."
The Northwestern players trying to unionize submitted a petition to the NLRB in late January, seeking to give 85 scholarship players the right to vote on representation and stating that National Collegiate Athletic Association rules were unjust.
The group is trying to secure guaranteed coverage of sports-related medical expenses for current and former athletes, as well as compensation for sponsorships. The players also are seeking to create a trust fund to help former players finish their degrees and push for an increase in athletic scholarships.
Ramogi Huma, founder and president of the Northwestern players' group, known as College Athletes Players Association, said the organization is "ready to defend this."
"This is historical," Huma said in a telephone interview. "Today college athletes are employees. It’s a first step toward forever changing the balance of power and guaranteeing players have a seat at the table and the right to bargain for basic protections."
The 123 schools in the NCAA's Football Bowl Subdivision turned a $1.3 billion profit on $3.2 billion in revenue in fiscal year ended June 2013, according to the data schools submit to the U.S. Department of Education.
The NLRB governs the rights of private-sector employees, meaning that the ruling only affects athletes who compete at private schools. Public-school players seeking to unionize would have to gain approval from state-run labor boards.
NLRB hearing officer Joyce Hofstra took five days of testimony last month from individuals called by the players and the school.
Quarterback Kain Colter, a cofounder of the players association who compared the NCAA system to a dictatorship before the hearings, testified that players spent 40 to 50 hours a week on football and had to sacrifice their bodies to do so. He also said that the time commitment kept him from pursuing a plan to enter the school's pre-med program.
Among people Northwestern called to testify were football coach Pat Fitzgerald, school administrators and three former players who said that football didn't keep them from succeeding as students.
College athletes, who can receive scholarships but are not paid, help generate more than $16 billion in television contracts, as well as revenue from sponsorships, ticket and merchandise sales, and payouts for championships.
Henry Bienen, Northwestern's president emeritus, said during a Knight Commission on Intercollegiate Athletics panel this month that collective bargaining would mean a total change for schools.
"A union means collective bargaining over a whole range of issues," said Bienen, a member of the Knight Commission whose mission is to ensure athletic programs operate within the educational goals of their schools. "If we got into collective bargaining situations, I would not take for granted that the Northwesterns of the world would continue to play Division I sports."
Separately, the NCAA and five top conferences were sued twice this month by college players seeking to improve their financial standing.
A group of football and basketball players filed an antitrust suit that called the organizations a "cartel" that generates billions of dollars while illegally capping the pay of student athletes. The suit is seeking to bar the NCAA and the conferences from stopping schools that want to compensate players.
Also this month, the NCAA and five conferences were sued in San Francisco by Shawne Alston, a former West Virginia University football player who claims they conspired to limit the value of scholarships to less than the actual cost of attendance.
The NCAA also is a defendant in a case brought by former UCLA basketball player Ed O'Bannon and other athletes, who seek to profit over the use of their likeness in video games.
The United Steelworkers Union backed the players' NLRB petition and is paying their legal fees.
© Copyright 2014 Bloomberg News. All rights reserved.