WHY MEDIATION OF THE NCAA LABOR DISPUTE MAKES SENSE

June 1 2014, By: Hon. Elizabeth Bonina, J.S.C. (Rtd.)

When football players at Northwestern University launched a bid to unionize last year, and a regional director at the National Labor Relations Board (“NLRB”) ruled that the players are employees under the control of the university, a veritable “Pandora’s Box” was opened that could, ultimately, end collegiate athletics as we know them. While Northwestern University is appealing the ruling to the full NLRB, should the full NLRB agree with the regional director that the football players are employees, it is a fairly safe bet that Northwestern and the NCAA will take the case to the Court of Appeals, and the U.S. Supreme Court, if necessary. If the full NLRB rules that the football players are employees and there is an appeal to the Court of Appeals, mediation could provide a cost-effective and time-saving manner of resolving the dispute.

The non-adversarial nature of mediation can help save relationships, maximize cost savings, and prevent the destruction of collegiate athletics by helping each side see the strengths and weaknesses in their positions. The potential unionization of college athletes poses many questions and concerns for each side of the dispute, and mediation would help keep the dispute private and out of the public eye.

One of the concerns that the student-athletes face is whether, if unionized and considered employees of a college or university, their scholarships would be considered wages, and whether or not they would then be required to pay taxes. At the present time, pursuant to federal income tax law, gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational institution. See: 26 U.S. Code $ 117. According to the Northwestern University website, the full cost of tuition, room and board, and other fees and expenses for the 2014-2015 academic year is estimated at $65,554 which, if considered to be wages and not a scholarship, would result in a potentially large tax liability for student-athletes. The student-athletes may also have to tackle some contractual issues since, in order to participate in NCAA athletics, every student-athlete is required to sign NCAA Form 08-3A, granting the NCAA the right to use the athlete’s name or picture to “promote NCAA championships or other NCAA events, activities or programs.” By signing this form, the student-athletes permit the NCAA to use the athlete’s name and likeness in television commercials, banners hanging from light posts near an event venue, team and athlete photos in media guides, or a photo on a game ticket. It also allows the NCAA to license athlete images through DVDs, rentals of game films, cable and network broadcasts of games and photographs.

The NCAA, as well as athletic conferences and college athletic departments, also face issues, such as what would happen if players at one university went on strike, causing harm to other schools in that conference as that is the nature of game cancellations. Another cause for concern is what effect, if any, unionization of student-athletes would have on a college athletic department’s compliance with Title IX, a federal law prohibiting gender discrimination in athletic programs at institutions that receive federal funds. Potentially, many colleges may consider opting out of competing at their present levels, or drastically reducing or eliminating their athletic departments.

With the business model for major college athletics at stake, it makes sense to mediate the dispute and come to a bargained-for resolution that all parties can live with, rather than spending countless hours and significant amounts of money in litigation.

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Hon. Elizabeth Bonina, is a retired Justice of the Supreme Court, Kings County, and an Adjunct Professor of Business Law and Sports Law at St. Joseph’s College in Brooklyn, New York. She is a member of NAM’s (National Arbitration and Mediation) Hearing Officer Panel and is available to hear arbitrations and mediations throughout the New York Metro area. She has been voted as the #1 Arbitrator in New York State for three consecutive years (2015, 2014, 2013) by the New York Law Journal Reader Rankings Survey, and has been voted one of the Top Ten Mediators in New York State for six consecutive years by that Survey.

Click here to view Judge Bonina’s resume.

For any questions or comments, please contact Jacqueline I. Silvey, Esq. / NAM General Counsel, via email at jsilvey@namadr.com or direct dial telephone at 516-941-3228.