Why was the National Labor Relations Board’s ruling that college athletes can unionize limited to private institutions?

The National Labor Relations Board recently determined that scholarship college athletes at private nonprofit colleges and universities can unionize. The NLRB determined that college athletes at those schools are "employees" of the school, and their payment is their scholarship.

Under the National Labor Relations Act, states are not "employers." Since public schools are part of their state government, public schools are not employers under the NLRA. Since private schools are not part of their state government, they are not employers under the NLRA. The federal regulations of the NLRB explicitly provide that the NLRB will exercise jurisdictions over issues involving private nonprofit colleges and universities that have a gross annual revenue of $1M or more.

This does not mean that college athletes at public schools cannot unionize, it just means they have to do so differently. Those athletes would have to unionize under procedures for public sector employees. Some states are right to work states, which prevents compulsory union participation for public sector employees. Those employees could join the union if they wanted to do so, but they would not have to join or participate in its labor policies or goals.

On the other hand, Northwestern's college athletes will be voting within the month to determine whether they will be represented by the College Athletes Players Association. The CAPA was just recently formed. If a majority of Northwestern's athletes vote for representation, then all Northwestern athletes will be represented by the CAPA.

On the negligence lawsuit involving former Iowa football players injured during the rhabdomyolysis exercise scandal in January 2011.

In January 2011, 13 football players for the University of Iowa were hospitalized with rhabdomyolysis, which is the breakdown of muscle tissue leading to the release of muscle fiber contents into the bloodstream. The players suffered this condition as the result of overly strenuous workouts following a disappointing 2010 football season.

On March 10, 2014, one former player injured by "rhabdo" sued the school and State of Iowa for negligence. Unless one or more of the injured former players were in negotiation with the school before January 2013, and unless the parties agreed to waive arguments based on Iowa's statute of limitations, the player or players may lose on a technicality. Iowa Code 614.1(2) provides that personal injury lawsuits must be brought within two years. The former player's claim was initiated more than three years after the injury. Accordingly, even though the school would likely be liable for negligence, it may win because the player waited too long to file the lawsuit. That said, it is more likely that the players were previously in confidential negotiation with the school, and the parties agreed to waive any argument based on the statute of limitations.

Student-athlete likeness litigation appears headed to trial.

Last week, the presiding judge in the NCAA student-athlete likeness antitrust litigation denied competing motions for summary judgment. The judge has not yet issued a written ruling on either motion, but indicated that the issues cannot be resolved without a trial. Keep in mind, there were two classes seeking certification, and only one was certified: current student-athletes. Former student-athletes were not certified as a class.

Interestingly, the presiding judge gave a scathing reply to the NCAA's argument that paying players would affect competitive balance: "Maybe you could enforce more competitive balance by having coaches' salaries addressed."

Copyright infringement of college football helmet designs.

For almost 20 years, the University of Oregon's football team has been known for its unique uniform designs. Nike is the outfitter for Oregon, and Nike's founder, Phil Knight, is an Oregon alum. Knight's beneficence is the reason for the plethora of uniform designs, and he has also donated substantial sums of money to the school and football program.

To design the football helmets for Oregon and other college football teams, Nike uses a company named Hydro Graphics. Hydro Graphics uses water transfer printing to apply the designs to the football helmets. After creating the helmets, it is unclear whether Hydro Graphics retains ownership of the copyright, or assigns the copyright to Nike. In either case, the copyright covers the stylistic design of the helmets, not the functional part of the helmets themselves.

Hydro Graphics developed this series of winged-designs for Oregon, to represent the school's mascot, the Ducks. The Rice University Owls used a substantially similar or identical design on its football helmets for this year's Liberty Bowl. Rice's team outfitter is Adidas, not Nike. Hydro Graphics does not list Rice as one of its customers in its portfolio. So, the helmet designers or the copyright owners of the Oregon helmets (Hydro Graphics or Nike) appear not to be the same people who designed the Rice helmets.

Unless Rice's designer licensed the copyright from Hydro Graphics or Nike, or Hydro Graphics designed the helmet and did not place it on its portfolio, this is an actionable case of copyright infringement.

On show-cause orders in college football.

When a college coach or staff member commits serious violations of the NCAA constitution or bylaws, the NCAA can impose a show-cause order on that person for a specified period time. Show-cause orders are issued by the Committee on Infractions (COI). The COI is the judge and jury in NCAA enforcement proceedings.

Any school that hires a coach subject to a show-cause order must demonstrate to the COI why the school should not be penalized for simply hiring that coach. In effect, a show-cause order is contagious; hiring an "infected" coach can infect the school that hired him or her.

At this time of year, the college football regular season is ending. Unsuccessful coaches are fired and successful coaches leave schools for better employment. This leaves fans questioning who their team's next coach will be. While coaches under show-cause orders are not technically prohibited from coaching, they are effectively prohibited from doing so.

The two most prominent former college football coaches subject to show-cause orders are Jim Tressel and Chip Kelly. Tressel was the head coach at Ohio State University from 2001 through the 2010 season, and Kelly was the University of Oregon's head coach from 2009 through the 2012 season.

Tressel is under a five-year show-order until December 19, 2016. If any school hires him before then, additional penalties can be summarily imposed on the school. Tressel is also unable to participate in any conference championship, bowl or playoff games during the time the order is effective, and he would have to sit out the first five games of his first season back in coaching.

Kelly's show-cause is less burdensome, but still essentially prevents him from coaching before the order expires at the end of the 2014 football season. If any school hires him before then, it will be subject to any number of penalties simply for hiring him.

The biggest college football story no one talks about: The Johnny Football trademark paradox.

By definition, a trademark is being used in commerce. To get a federally-registered trademark, the applicant must submit an affidavit of use stating that the mark is being used in commerce. An affidavit is subject to the penalty of perjury. If you submit an affidavit that you know is not true, you can be punished by up to five years in prison.

 

Use in commerce of a trademark entails making money from it. This is inapposite with the NCAA's principle of amateurism. Any college athlete with a federally-registered trademark admits to breaking NCAA rules. This can be easily alleviated by first filing an intent-to-use application and later filing an affidavit of use once the athlete is done playing college sports. This is not what Manziel did. He filed for a trademark on the Principal Register, and submitted an affidavit stating that "Johnny Football" is being used in commerce.

 

Apparently, the NCAA did not allow Manziel to obtain a federal registration, but just to protect his common law trademark rights until he could use the Johnny Football mark in commerce after he was done playing football at Texas A&M. Protecting common law trademark rights does not entail submitting an affidavit saying you are using a trademark in commerce. As it is, Manziel either committed a fraud on the United States Patent and Trademark Office by submitting the affidavit, or is admitting to breaking NCAA rules in submitting the same affidavit. The only other conceivable explanation is that the NCAA is allowing Manziel to play by a different set of rules than anyone else, by letting him have his trademark and play football too.

A primer on NCAA enforcement rules and related issues.

Here is an overview of current NCAA enforcement rules and related issues. As NCAA rules change, this primer will be updated from time to time.

NCAA seeks Supreme Court intervention on First Amendment argument in student-athlete likeness antitrust litigation.

On October 25, 2013, the NCAA filed a motion for review by the U.S. Supreme Court of the Ninth Circuit's decision on the NCAA's First Amendment argument in the student-athlete likeness antitrust litigation. The Ninth Circuit determined that the First Amendment argument did not apply, because the NCAA did not change the likenesses of the football players enough in the NCAA Football series of video games. The NCAA contends that the argument does apply, and wants the Supreme Court to decide the issue. As mentioned yesterday, certiorari is infrequently granted.

If certiorari is granted, the Supreme Court would review the decision concurrently with the likeness antitrust litigation. This sort of review is analogous to when a football coach calls timeout in a game so he can challenge a referee's decision and obtain further review. Upon doing so, the referee consults instant replay and decides whether his decision is confirmed, stands, or is reversed. Here, the difference is that the referee does not review his own decision; the Supreme Court would review the Ninth Circuit's decision.

No surprise: NCAA's motion to dismiss student-athlete likeness antitrust lawsuit was denied.

It is no surprise that the NCAA's motion to dismiss the student-athlete likeness antitrust lawsuit was denied. The NCAA is the lone remaining defendant; all others have settled. The NCAA's attorneys who filed the motion could be sanctioned by the court, because there was no chance the motion would be granted and they filed it anyway.

If an attorney files a document in a lawsuit for an improper purpose like harassment or to needlessly increase the cost of litigation, the court can sanction the attorney who filed it. As you would expect, an attorney who files a motion for sanctions raises the personal stakes of everyone involved.

Aggravating and mitigating circumstances in NCAA enforcement.

In addition to lacking subpoena power and legal standards, the presence or absence of aggravating and mitigating circumstances affects the penalties levied in NCAA infractions cases.

Aggravating circumstances warrant the imposition of more severe penalties in an infractions case. Mitigating circumstances warrant the imposition of less severe penalties in a case. Aggravating circumstances include but are not limited to an institution's history, and the school's cooperation with the NCAA during an investigation. If you fail to cooperate or try to conceal violations, you are subject to more severe penalties. Conversely, if you exhibit exemplary cooperation or have little to history of rules violations, you may be given less severe penalties.

It may seem axiomatic that cooperation mitigates potential penalties in an infractions case, but without subpoena power the NCAA must put a premium on openness. Otherwise, it would be extremely difficult for the NCAA to discover relevant information in a given case, because there would no incentive for schools to do so.

Why is it more difficult to win a lawsuit than it is to defend an NCAA investigation?

1. Subpoena power.

In court, plaintiffs and defendants have subpoena power, which is the ability to require someone to testify or produce information in a lawsuit. If you fail to comply with a subpoena, you can be held in contempt and placed in jail. If you are served with a subpoena but consider it an improper request, you can move to quash it. You must file a motion to quash and set the matter for hearing before the date specified in the subpoena. You can try this by yourself, but it is unlikely to be successful without an attorney's help.

A subpoena can be quashed when it seeks privileged information or protected matter; fails to allow a reasonable time to comply; requires excessive travel to comply; or otherwise imposes an undue burden on the party subject to it. The NCAA has no subpoena power. Accordingly, it has no way to force a party to divulge information.

In court and in NCAA investigations, there is a duty to speak truthfully. If you do not in court, you can be charged with perjury. If you do not in an NCAA investigation, you can lose your eligibility if a player, or issued a show-cause order if a coach or administrator. If you do not speak to the NCAA at all when information is requested, you will likely be penalized to a similar extent than if you had lied to the NCAA. Accordingly, you should speak to the NCAA when requested, even if you are not obligated to do so.

2. Legal standards.

As discussed elsewhere, there are no legal standards in enforcing NCAA rules. A criminal defendant must be proven guilty beyond a reasonable doubt. A civil plaintiff generally must prove his or her case by a preponderance of the evidence. Sometimes, the standard is "clear and convincing." Without legal standards for determining guilt of a party, it is exceedingly difficult for the NCAA to find a school or involved individual guilty, because the school or individual can simply claim there is insufficient evidence.

What is a "lack of institutional control" in NCAA Bylaws?

To encompass a variety of conduct, the NCAA's definition of "institutional control" is broadly written. When a school exercises control and responsibility over its intercollegiate athletics programs, it has institutional control. Accordingly, a school lacks institutional control if it does not exercise control and responsibility over its intercollegiate athletics programs. Under the new Division I violation structure, a lack of institutional control is a severe breach of conduct (Level I violation). A failure to monitor is usually a significant breach of conduct (Level II violation) unless severe enough to be a Level I violation.

When the NCAA conducts an investigation after an alleged violation, a primary factor in determining whether there is institutional control is the compliance measures in place at the time of the violation. Basically, an NCAA investigation is a process audit, and a charge of a lack of institutional control is a failing grade.

Most violations do not result from a lack of institutional control. If a school has adequate compliance measures in place, properly educates and monitors relevant personnel, and takes action when alleged violations are discovered, it will not be charged with a lack of institutional control. However, if a school does not establish adequate compliance measures, does not properly oversee or educate relevant personnel, does not fix ineffective measures, or suffers some other defect preventing it from monitoring compliance, it will be charged with a lack of institutional control.

Impermissible financial inducements in college football recruiting.

Those following college sports know that a school representative cannot provide financial inducements to a prospective student-athlete, or the friends or relatives of such athlete. This holds even if the athlete does not eventually attend that particular school.

If the school’s representative had a pre-existing relationship with a family member of the athlete, the representative can provide a benefit to the family member so long as it is consistent with the nature and level of benefit provided to the family member before the athlete reached ninth grade.

If there is no pre-existing relationship, prohibitions on the financial aid a school representative can provide include but are not limited to:

- Employment for a prospective student-athlete’s relatives;

- Gifts of clothing or equipment;

- Co-signing of loans;

- Providing loans to a prospective student-athlete or his or her friends;

- Cash or like items;

- Any tangible items, including merchandise;

- Free or reduced-cost services, rentals or purchases of any type;

- Free or reduced-cost housing;

- Use of an institution’s athletics equipment;

- Sponsorship of or arrangement for an awards banquet; and

- Expenses for academic services.

Article 13 of the NCAA Operating Bylaws is broadly written to prohibit financial inducements not specifically mentioned. For instance, “cash or like items,” and “any tangible items” are prohibited.

EA and Collegiate Licensing Co. settle with former players in NCAA likeness litigation; NCAA only remaining defendant.

EA Sports and the Collegiate Licensing Company, defendants in the NCAA student-athlete likeness antitrust litigation, settled all claims with former and current college players. The defendants are paying the plaintiffs $40 million. The case has not been certified as a class action, so this was a good time to settle. If the defendants waited until a ruling on the plaintiffs' motion for class certification, they could have lost a significant amount of leverage in settlement negotiations, and they did not have much leverage at this point anyway.

The NCAA has not settled. It is the only remaining defendant, and publicly shows no indication that it intends to settle. I would be surprised if the NCAA allows the case to go to trial. The NCAA is banking on denial of the plaintiffs' motion for class certification. It also expects more public support as the case draws closer to trial.

Publicly, the NCAA claims it is prepared to go down with the ship; either college sports stays the same or the current model will be replaced with a minor league sports model. To college sports fanatics, of which there are many, this existential threat should garner the NCAA more public support as trial draws closer. Privately, the NCAA must be examining its options for settlement and how it would affect the current NCAA model.

NCAA moves to dismiss student-athletes' claim in likeness antitrust litigation.

Yesterday, the NCAA moved to dismiss the plaintiffs' antitrust claim in the NCAA student-athlete likeness antitrust litigation. In moving for dismissal, a defendant must show that there is no factual scenario on which a plaintiff could win the case. Usually, a plaintiff can show some factual basis that would entitle him or her to relief.

The NCAA relied on NCAA v. Board of Regents of the University of Oklahoma, which deregulated college football television broadcasts and paved the way for conference realignment. The NCAA argues that Board of Regents categorically approved NCAA rules on amateurism. The student-athletes argue the opposite. The student-athletes are right, because the legality of the NCAA amateurism rules was not in question in Board of Regents. Only the legality of the NCAA rules on television broadcasts was under consideration. Accordingly, anything the court said about NCAA amateurism rules in Board of Regents was non-precedential.

Filing a motion to dismiss was an odd move by the NCAA, because it will be denied. Proper motion practice is to file a motion only when there is a chance it will be granted. Otherwise, it is a waste of time. The NCAA would have been better off filing a motion for summary judgment. Although unlikely, it would have at least had the possibility of being granted.

If fired for the 2011 audio tape, Nebraska football coach Bo Pelini has a claim for business interference.

In October 2011, University of Nebraska head football coach Bo Pelini delivered a post-game press conference shortly after his team completed the biggest comeback in school history. Nebraska had just defeated Ohio State, 34-27, after being down 21 points in the second half. In an off-the-record conversation prior to the press-conference, Pelini lambasted the fans who left the game early, and journalists from the Omaha newspaper. Pelini's comments included numerous instances of the "f-word." They were ill-advised, and some people are understandably offended.

Basically, Pelini called Nebraska fans "fair-weather," which is completely untrue. If there is any fan-base that is not "fair-weather," it is Nebraska football fans. The team has been mostly successful for the last 50 years, but it has also sold out every home game since 1962. No other school comes remotely close. Even in down years, the fans still show up for games. The anger toward the journalists was for leaving press conferences early.

This past Saturday, on September 14, 2013, Nebraska lost to UCLA, giving up 38-straight points in the process. Within the next two days, audio tape of the October 2011 off-the-record conversation was released to the media. If Pelini is fired for his comments in the audio tape, he can sue the person who released the tape for business interference.

Surely, Pelini's contract has a "morals clause" that might justify dismissal for those type of comments. But even if the school has cause for firing Pelini, the person who released the tape does not have the right to release the tape for the purpose of getting Pelini fired.

If the audio tape had been released shortly after the tirade occurred, there would not necessarily be a claim, because the motives of the person who released the tape would not be so clear. But two years after the fact and after a bad loss at home, the person's motives could not be clearer. The person wanted Pelini fired, and any jury could see this. Business interference requires:

(1) a contract;

(2) that a defendant has knowledge of the contract;

(3) that the defendant intentionally and improperly interfered with the contract;

(4) the interference caused the third party not to perform or to stop performing the contract; and

(5) that the plaintiff was damaged.

The person who released the tape surely knew that Pelini has a contract with the school. Releasing the tape to get the coach fired constitutes "improper interference." If Pelini is fired, he could recover the amount he would earn if there had not been improper interference, i.e., if the tape had not been released for the purpose of getting him fired. He could not recover that amount from the school, but from the person who released the tape. Accordingly, the person who released the tape could be liable for millions of dollars of actual damages, as well as punitive damages if his or her conduct is deemed particularly willful and wanton.

Whether Pelini can recover depends on if he loses his job due to the audio tape. In another post, I warned readers of the ease with which you can be guilty of business interference.

The "Johnny Football" trademark could get sacked.

I have written about Johnny Manziel's "Johnny Football" nickname/mark several times:

- The conflict between U.S. trademark law and NCAA rules: The "Johnny Football" scenario.
- On trademark infringement.
- Use of a trademark "in commerce" and the redux of the Johnny Football example.
- Agency, Cam Newton and Johnny Manziel -- Part 2: Teaching basic legal analysis through college football.
- What is the NCAA enforcement team looking at when investigating Johnny Manziel's eligibility? Part 3: Teaching basic legal analysis through college football.
- By definition, a college athlete with a federally registered trademark is violating NCAA rules.
- Illustrating the difference in legal standards through the NCAA and Johnny Football autograph situation.

Manziel is unique among college athletes because the NCAA allowed him to protect his "Johnny Football" mark prior to the expiration of his eligibility. Being able to protect his mark does not mean that he can use the mark in commerce. If he did use the mark in commerce, he would be violating NCAA rules.

The United States Patent and Trademark Office recently issued an office action illustrating its concern that the "Johnny Football" mark is not being used as a trademark. Manziel is in a difficult position, because he cannot use the mark in commerce and maintain eligibility. But he must use the mark in commerce to obtain a valid federal registration. Manziel's people made a big mistake by not pursuing an intent-to-use application followed by affidavit of use once his eligibility expires. That would have solved this problem.

Illustrating the difference in legal standards through the NCAA and Johnny Football autograph situation.

- Do we know that Johnny Manziel took money for autographs by a preponderance of the evidence? In other words, is it more likely than not that Manziel took money for autographs?
- Do we have clear and convincing evidence that Manziel took money for autographs?
- Is there reasonable doubt whether Manziel took money for autographs?

One of the biggest differences between the American judicial system and NCAA enforcement is the former's use of legal standards. The legal standards in the United States are: (1) proof by a preponderance of the evidence; (2) proof by clear and convincing evidence; and (3) proof beyond a reasonable doubt.

For a plaintiff to win in a civil case, proof by a preponderance of the evidence (more likely than not) is usually required. In some cases, such as juvenile or family law, proof is required by clear and convincing evidence. Only in criminal law is proof required beyond a reasonable doubt.

The NCAA enforcement bylaws provide no legal standards for guidance. As a result, lawyers for big-money schools can exonerate student-athletes alleged of wrongdoing as long as the student-athletes deal in cash. It is really that simple: If you deal in cash, it does not matter how brazen the violations are. If you are a big enough school with enough money, you can buy your way out of trouble. The NCAA is complicit in the alleged wrongdoing, because it tries to protect its economic interests in handing out penalties. The NCAA will rarely penalize an athlete if it can make money from him or her.

The rule prohibiting Manziel from signing autographs for money should be changed. He should be able to sign autographs and retain eligibility, just like Olympic athletes can sign autographs for money but still compete in the Olympics. But current NCAA rules prohibit signing for money, and Manziel should have abided by those rules. He was not forced to play college football.

Manziel allegedly signed thousands of autographs. The NCAA's rationale in not penalizing him was that it could not prove that Manziel took money for autographs? By what standard?

It is much more likely than not that Manziel took money for autographs. There is also very likely clear and convincing evidence that he did. This is without subpoena power, which the NCAA lacks. Witnesses said he took money. There are thousands of Manziel-signed items available. There is a picture of him signing autographs in a seedy hotel room with people he did not know. He admittedly hates signing autographs. Also, there is allegedly an audio recording where Manziel basically admits to receiving payment for the autographs.

There might not even be reasonable doubt whether Manziel took money for autographs. It would be for a jury to decide. Public opinion certainly suggests that there is no reasonable doubt, although it is sometimes difficult to determine exactly how much evidence the NCAA could use. Anonymous sources cannot be used. This is analogous to the criminal justice system where a defendant has the right to face his or her accuser.

Despite evidentiary limitations, there is no reason Manziel should not have been penalized. The NCAA even changed its definition of "agent" in January 2012 after the Cam Newton situation, which should have applied here. Manziel's handler allegedly told people that Manziel would not sign autographs for free. The NCAA could have penalized Manziel even without proving he accepted money. It did not do so.

We can be thankful that the American judicial system is more impartial than the NCAA's enforcement process.

Former football players' concussion lawsuit against the NCAA.

The student-athlete likeness antitrust litigation is not the only high-stakes case the NCAA is facing. In July 2013, the plaintiffs in a concussion lawsuit against the NCAA filed a motion for class certification. The requirements for class certification have been discussed in another post.

The concussion lawsuit is under a stay (which essentially means a timeout), because the parties are hoping to settle. Simply filing a motion for class certification before a stay gives the plaintiffs leverage, because it provides the NCAA incentive to settle. If the NCAA does not settle while under a stay and the plaintiffs' motion for class certification is later granted, then the NCAA is in a much worse position for settlement. If the NCAA does not settle while under a stay but the plaintiffs' motion for class certification is denied, the NCAA is not really in any better position than before the ruling on class certification.

Conferences to stop licensing trademarks to EA Sports' NCAA Football video games; more posturing in settlement negotiations in NCAA student-athlete likeness antitrust litigation.

The Big Ten, Southeastern (SEC) and Pac-12 Conferences have decided to stop licensing their trademarks to EA Sports for its NCAA Football series of video games. Last month, the NCAA said it would discontinue licensing its trademarks to EA Sports for the NCAA Football video games. In light of the NCAA's decision, EA Sports said its next college football release would be titled "College Football '15."

The Big Ten, SEC and Pac-12 are just the first conferences to say they will not license their trademarks to EA Sports for the video game. More conferences are expected to do the same. While individual schools can still license their marks to EA Sports for the game, EA would no longer be able to mention the NCAA or any of the conferences in future releases. This would diminish the realism of the game, and likely severely diminish profits EA is able to realize.

The conferences' decision is a continuation of the strategy employed by the NCAA: The conferences are "taking their balls and going home." Rather than pay the players for licensing their likenesses in video games, the conferences and the NCAA before them are now simply saying they will not take any part in the game's production, to avoid having to compensate the players.

In settlement negotiations, this is probably the best strategy the NCAA and the conferences can employ, because it eliminates the student-athletes' ability to negotiate for future profits. Unfortunately for gamers, it could mean the beginning of the end for college football video games.