David Kiefer writes:

Fourteen months after the National Labor Relations Board declined to assert jurisdiction over a representation petition filed by Northwestern University’s football players, the Board’s Division of Advice issued an Advice Memorandum concerning those same players, which found that certain rules contained in Northwestern’s “Football Handbook” violated Section 8(a)(1) of the National Labor Relations Act.  See Northwestern Univ., NLRB Div. of Advice, Case No. 13-CA-157467 (Sept. 22, 2016).

Copyright: / 123RF Stock Photo
Copyright: / 123RF Stock Photo

The Division of Advice’s memorandum, which is dated September 22, 2016, analyzed four policies contained in Northwestern’s “Football Handbook” to determine whether the policies could be reasonably construed to prohibit Section 7 activity.  See, e.g., Guardsmark, LLC v. NLRB, 475 F.3d 369, 374 (D.C. Cir. 2007) (“To determine whether a work rule violates NLRA section 8(a)(1), the Board considers whether the rule would reasonably tend to chill employees in the exercise of their statutory rights. . . . [I]f nothing in the rule explicitly restricts section 7 activity, then . . . the rule violates the Act if . . . employees would reasonably construe the language to prohibit Section 7 activity.”) (quotations and citations omitted).

The Division of Advice analyzed four allegedly unlawful policies from the “Football Handbook”: (1) the “Social Media Policy,” which stated that players’ social media sites would be monitored and “sanctions” issued against players for improper postings; (2) the “Sports Medicine & Player Communication Rule,” which sought to preclude players from discussing “any aspects of the team . . . with anyone,” including “the physical condition of any players”; (3) the “Dispute Resolution Procedure,” which provided that any “complaint or grievance concerning personal rights and relationships to the athletic program” must be grieved according to a four-step process and could be discussed only with football and athletic department employees; and (4) the “Athletic Communications for Student Athletes Rule,” which stated that all interviews must be handled through the athletic communications office, and any statements made by players in those interviews should be “positive when talking about your teammates, coaches and team.”

The Division of Advice determined that all four policies could reasonably be construed as prohibiting Section 7 activity.  Collectively, the challenged policies violated Section 8(a)(1) because, among other things, they could reasonably be construed to preclude “discussions about vital health and safety issues,” prohibit “discussions with fellow players and third parties concerning workplace grievances,” and limit the timing and content of media interviews.  Despite the fact that Northwestern “d[id] not adequately repudiate the unlawful handbook rules,” the Board declined to issue a complaint because (i) the university modified the “Football Handbook” to address the policies’ shortcomings and (ii) provided notice to the players regarding the handbook modifications.

The Advice Memorandum is notable because it involves the application of federal labor law to intercollegiate athletics.  However, the Advice Memorandum’s impact should not be overstated, particularly as it relates to athlete compensation and union representation.  First and foremost, the Advice Memorandum does not have the legal effect of a Board decision.  “Division positions are prosecutorial, not adjudicative, in character: they are not attributable to the Board, and they are not reviewable in court.”  Constr., Bldg. Material, Ice & Coal Drivers, Helpers & Inside Employees Union, Local No. 221, v. NLRB, 899 F.2d 1238, 1241 (D.C. Cir. 1990).  Second, the Advice Memorandum did not address the central issue arising from the football players’ prior representation proceeding – i.e., whether scholarship football players are statutory employees under Section 2(3) of the Act.  Instead, the Division of Advice noted in a footnote that it had simply “assume[d], for purposes of this memorandum, that Northwestern’s scholarship football players are statutory employees.”  Moreover, although Northwestern modified its policies in the “Football Handbook” to comply with the Act, it reserved its right to challenge any subsequently filed representation petition on the grounds that scholarship football players are not statutory employees.  As expressly noted in the Advice Memorandum, Northwestern “still maintain[ed] that athletic scholarship football players are not employees under the [Act].”

David Kiefer is an associate in the Labor & Employment Department, resident in the firm’s Pittsburgh, PA office.

David Kiefer writes:

With the calendar turning to September, that means that NBA training camps will open in less than one month. And while the players’ main offseason focus was on how the influx of new national television revenue will put more money in their pockets (8 players signed new or amended contracts worth more than $100 million this past offseason), a lesser-celebrated event – in this case, a change in the law – will lead to a number of players keeping a bit more money in their own pockets.

Copyright: / 123RF Stock Photo

Since July 1, 2009, NBA players who have played games in the state of Tennessee – both as visiting players and as members of the Memphis Grizzlies – have paid a $2,500 per game “Professional Privilege Tax for Professional Athletes,” up to a maximum of $7,500 per year. See T.C.A. §§ 67-4-1702, 1703. The tax was particularly onerous on minimum salary players, as the players’ union contended that minimum salary players had a nearly 100% effective tax rate for games played in Tennessee (after accounting for federal income taxes and any other state income taxes due in the player’s home state). However, as of June 1, 2016, NBA players no longer have to pay Tennessee’s $2,500-per-game privilege tax.

In passing House Bill 1134 and Senate Bill 1247 in April 2014, the Tennessee legislature removed NBA players (as well as NHL players, who were also subject to the tax) from the list of individual required to pay the state’s privilege tax. The elimination of the tax on NHL players was effective immediately, while the tax on NBA players remained in force through the 2015-16 NBA season.

Tennessee’s Professional Privilege Tax for Professional Athletes was unique for a few reasons. First, Tennessee has no state income tax, which meant that the tax was structured as an occupational license tax. NBA and NHL players – two groups of individuals whom typically do not require state licenses or certification to work as professional athletes – were nonetheless required to annually pay the $2,500-per-game tax, which was well in excess of the $400 tax due from other Tennessee-based professionals (such as accountants, architects and attorneys).

Second, the money collected from tax was “deposited into a municipal government fund located in the same municipality as the indoor sports facility in which the game was played.” T.C.A. §§ 67-4-1703(e). In essence, part of the tax revenues collected were paid to the operator of FedEx Forum in Memphis, which happened to be the ownership group of the Memphis Grizzlies (the portion of the revenues attributable to NHL players went to the operator of Nashville’s Bridgestone Arena, which also happened to be the owners of the Nashville predators). Those tax revenues were then used to attract other sports and entertainment events to the Memphis area, such as bowl games, concerts and the like.

Finally, Tennessee’s privilege tax was arguably unconstitutional. Prior to the tax being repealed, NBA players sought refunds of previously paid privilege taxes on the basis that the privilege tax violated the United States Constitution’s dormant commerce clause, due process clause and equal protection clause. Had the cases proceeded to litigation, these arguments could have proved meritorious, as Ohio’s Supreme Court recently analyzed similar taxes involving Cleveland’s municipal income tax and ruled that Cleveland’s tax violated players’ constitutional rights. See Hillenmeyer v. Cleveland Bd. of Rev., 144 Ohio St.3d 165, 2015-Ohio-1623, ¶ 49 (rejecting equal protection challenge and declining to address commerce clause challenge, but holding that the tax “imposes an extraterritorial tax in violation of due process, because it foreseeably imposes Cleveland income tax on compensation earned while Hillenmeyer was working outside Cleveland”); Saturday v. Cleveland Bd. of Rev., 142 Ohio St.3d 528, 2015-Ohio-1625 (declining to address constitutional challenges to Cleveland’s municipal income tax but holding that “a professional athlete whose team plays a game in Cleveland but who remains in his home city participating in team-mandated activities is not liable for Cleveland municipal income tax”).

Now, Tennessee’s privilege tax is no more, and players on all 30 NBA teams will leave Memphis with a little more money in their pockets.

David Kiefer is an associate in the Labor & Employment Department, resident in the firm’s Pittsburgh, PA office.

Copyright: bankjayphotto / 123RF Stock Photo

Women soccer players have complained that they are not paid the same as their counterparts on the U.S. Men’s National Team. How would this play in the courts? California passed amendments to Labor Code section 1197.5 through the California Fair Pay Act, which mandates equal pay for substantially equivalent work. It passed without controversy and with the approval of the California Chamber of Commerce.  Yesenia Gallegos and I gave a webinar on the act recently.

What does it mean? Is a chemical engineer’s work substantially equivalent to that of an electrical engineer?  Women tennis players have argued successfully that their show is as good as (or better than) that of the men. Is the women’s soccer game substantially equivalent? Perhaps the courts will decide.

California State Capitol Building, Sacramento
Copyright: jpainting / 123RF Stock Photo

California passed legislation effective the first of this year stating that people who do substantially equivalent work have to be paid the same. There are certain “ifs, ands and buts” but that is the idea.

The Chamber of Commerce supported the legislation and the courts have not yet weighed in. While ostensibly this will affect women and minority workers, it may be in unforeseen directions. Remember “The Blind Side” – the book, not the movie. The point of the book was that the player who protected the quarterback was perhaps as valuable as the quarterback. Salaries have followed this sentiment. But how about the wide receiver, the kicker, the defensive tackle? For a discussion of this, tap into my interview with Bob Pritchard of Voice America (audio starts playing automatically).

Jeffrey Kravitz and Andrew Russell write:

As featured in the Los Angeles Times former USC football coach Steve Sarkisian has filed suit against the university, claiming it threw him under the bus. Time will tell, as in all lawsuits, but several facts seem paramount. First, Coach Sarkisian did not tell USC that he was an alcoholic when applying for the job. Second, he apparently denied the disease when asked. Third, USC did send him to two counselors, according to the Times. Fourth, he did not seem to be able to meet the requirements of the job.

As a UCLA alumna, I have joked to my USC friends about whether he would have been fired had USC started the season well.  I think I do the university a disservice. It has been a fine school for years and no longer can be razzed by us Bruins as the University of Spoiled Children or Figueroa (the street that it is on) Tech.  USC promises to fight on to contest the suit and we support this decision.

That said, alcoholism is considered a disability and when notified, California employers are required to engage in the interactive process to determine whether a reasonable accommodation exists that does not present an undue hardship.  Moreover, California Labor Code Section 1025 requires private employers to accommodate employees who wish to voluntarily enter an alcohol rehabilitation program, assuming again that it does not impose an undue hardship on the employer.  However, California law does not excuse an employee’s failure to perform his or her job duties, even if it the result of their alcoholism.  In addition to its statements that Sarkisian denied he was an alcoholic, USC will certainly argue that Sarkisian embarrassed the university at pep rallies, showed up to work drunk, missed team meetings, failed to deliver on the field, and underperformed in other facets of his job.  If USC terminated Sarkisian based on these failures to properly perform his job duties, whether or not Sarkisian’s alcoholism had a role likely will not matter.

For more on the issue, please be sure to check out Fox Rothschild attorney Tom Basta’s post on our Employment Discrimination blog and his feature in the article, “What Steve Sarkisian Needs to Prove to Win His Discrimination Case—and Why It’s So Hard” on LXBN.

On March 30th, the Chicago Cubs assigned wunderkind slugger Kris Bryant to its minor league affiliate in Iowa, rather than bringing him north from spring training for MLB’s opening day.    Bryant – the consensus number one prospect in professional baseball – completely annihilated Cactus League pitching this spring, with a league-leading 9 homers in 40 at-bats and a slash line of .425/.477/1.175.    Bryant’s assignment to Iowa was met with strong reaction from the Major League Baseball Players Association which issued the following statements via Twitter:

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The implication from the players association and others is that the Cubs had an ulterior motive for sending Bryant to the minor leagues, i.e. due to a longstanding wrinkle in the collective bargaining agreement, delaying Bryant’s promotion to the major leagues for the Cubs’ first 8 games of the season  – indeed, the Cubs called up Bryant to the majors on April 17th (and he has continued crushing the ball to the tune of a .409/.552/.591 slash line) – allows the Cubs to keep Bryant’s contractual rights for an additional season.  Instead of being able to declare free agency after the 2020 season, Bryant will become free-agent eligible no sooner than after the 2021 season.  Essentially, by delaying Bryant’s promotion, the Cubs traded eight games of Bryant in 2015 for an entire season of Bryant in 2021.

Both the Cubs and certain pundits have defended Bryant’s non-promotion as justifiable for the purpose of Bryant’s development, such as to improve his defensive skills.  However, it is unclear precisely what defensive skills (or other parts of his game) Bryant was made to “work on” between opening day and April 17.

Bryant is not the first young prospect to be held in the minors by his club for the alleged purpose of delaying the player’s service time.  Teams have been accused of doing this in order to either delay a player’s free agency or arbitration eligibility, and occasionally players have filed grievances against their clubs that have done so.  While transcripts of these grievances are not made public, one can assume that players have accused MLB clubs – who are given a great deal of deference for promotion/demotion decisions in both the CBA and standard player contracts – of violating the implied covenant of good faith and fair dealing in the standard player contract.   But while allegations of “service-time games” against clubs are not novel, it is difficult to recall a minor league player who was held back after so convincingly dominating every level of minor league competition and then statistically outperforming – arguably – every other participant in major league spring training.

I will not speculate here on the likelihood of success if the MLBPA or Bryant’s agent (Scott Boras) files a grievance on behalf of Bryant.  Other authors have so speculated.  The question I pose is whether there is a viable alternative system for determining free agency that can prevent conflicts like this from reoccurring, without causing unintended negative consequences.

Copyright:  / 123RF Stock Photo
Copyright: / 123RF Stock Photo

Regardless of whether one sympathizes with the Cubs (and MLB) or Bryant (and the MLBPA) on this issue, it is easy to find fault with the current linkage between service time and free agency.  Regardless of whether you believe the Cubs in this instance, this linkage clearly provides clubs with iniquitous incentives.  Clubs are incentivized to potentially hold back even the most “ready” of their best young players – something not seen in the other major professional U.S. team sports.  And thus, aspiring major league players, MLB fans, and potentially the clubs (e.g. if they lose games they could have won with the rookie player) suffer.

So I’d like to propose a solution for MLB and the MLBPA to kick around before the next round of negotiations: end (or substantially limit) the linkage between service time and free agency.  Right now, players are eligible for free agency after amassing 6 years of service time.  This is the case regardless of whether they are 25 or 35 or 45 years old.  Why not instead allow all players – regardless of service time – to file for free agency upon reaching a certain age?

This plan is inherently neither management-friendly nor union-friendly.  Who is favored under such a rule would depend on the “free agent age” that the sides negotiate.  For example, it would likely be quite league-friendly to say that all players become eligible for free agency at age 35, and it would likely be quite player-friendly for the CBA to provide that all players become eligible for free agency at 25.  Somewhere in the middle, however, there is a “fair” age for free agency that both sides can live with.  [n.b. however, there may be some not-so-obvious advantages for MLB clubs if the “free agent age” were not too high, particularly for clubs who have the financial wherewithal to frequently dip into the free agent market.  While some MLB clubs would be primarily concerned with losing team control over players at too young an age, others would prefer if most of the available high-end free agents were not on the “wrong side of 30.”         The thinking here is that if the entire supply of free agents consists of players in their decline years, teams would artificially drive up the market by signing “bad contracts” to older players, expecting them to repeat their peak years]

Clearly, details would need to be hashed out.  For example, this system would probably have to be phased in over time (e.g. becoming effective as to all players who sign their first-year player contract in or after 2015).  Moreover, either side might object on the grounds that this would flood the market with free agents.  Perhaps, if an excess of free agents were a concern, there could be some nominal service time quota to prevent “late bloomers” who have one great season from immediately hitting free agency before their clubs lose contractual control.

Regardless, even if the parties to collective bargaining hate my idea, I am hopeful that the interested parties will immediately begin brainstorming for creative alternatives to the current, system for determining free agency eligibility. While on the macro-level, the game is flourishing financially and player salaries are at an all-time high, I would argue that has happened in spite of – not because of – the current system of free agency. Now that we are well into a 20+ year period of relative baseball labor peace, there is no need to maintain vestiges of former CBAs that needlessly put clubs at odds with their players and fans, as I believe this system does.

Copyright:  / 123RF Stock Photo
Copyright: / 123RF Stock Photo

As heard on The Herd (note: the linked ESPN radio interview plays automatically), Clippers point guard Chris Paul been fined by the NBA for allegedly dissing a female referee. Generally considered a very good, very bright guy, and the union rep, Paul has been criticized for criticizing.

Absent other details of which this lawyer has not been informed, sometimes a cigar is a cigar. We’ll know we’ve reached an egalitarian society when everybody can be criticized equally. In SoCal, the public tends to understand all of this. I have found that employment cases are much easier to litigate where there is not one dominant ethnic group. Jurors run the gamut from Aussies to Zanzibarians, who tend to understand that it is a big world out there.


Northwestern University football players recently filed an election petition with the Chicago regional office of the NLRB.  The purpose is to seek an election so that scholarship players can bargain with the university and the NCAA.  Chances of an election being ordered are remote given that student athletes have not heretofore been found to be employees under the National Labor Relations Act; still anything is possible given the labor-friendly nature of the current NLRB and a public increasingly possessed of the belief that student athletes are exploited—at least those who participate in sports that generate revenue for their respective universities.

The NLRB should decline to order an election in this case because it may lead to a whole host of problems.  First, it may very well end universities and colleges sponsoring the vast majority of their sports. Once student athletes become employees, they need be paid. Sports teams that do not generate revenues will likely be cut so that the universities can avoid paying those students.  Second, will the athletes need to be enrolled in school and actually take classes?  Why, if they are truly employees?   Will the athletes be able to bargain over that issue?   Third, how will the NLRB treat club sports or those players that do not receive scholarships?  Are they employees as well?  Are they entitled to collective bargaining with their schools and the NCAA?

These are just a few of the questions that may come up.   Stay tuned.

By Jeffrey S. Kravitz, Esquire

Several of my partners write on California Employment Law and one of them struck a nerve. As featured in a recent California Employment Law blog post, the Iowa courts have held that an employer may fire a worker for being, for want of a better expression, "irresistibly hot." Where does that leave Tom Brady, Jim Palmer or maybe even Eli Manning? Does every football player have to look like Dick Butkus?

For that matter, I have a now-retired partner who tried a case against a former opera singer of Italian extraction, who was….you know! My partner among other things had lost a leg in childhood and was never going to be compared to Brad Pitt. Out of frustration, he asked the jury in voir dire, "Are you going to hold it against my client because I am short, bald and ugly?"  The jury loved him.