Higher Education Report

Higher Education Report

NLRB Grants Request for Review of Northwestern University Decision

Posted in National Labor Relations Board, Unionization

In a not surprising development, the National Labor Relations Board announced today that it has granted Northwestern University’s Request for Review of the Regional Director’s decision directing an election among the University’s grant-in-aid scholarship football players, citing the existence of “substantial issues warranting review.”  The NLRB will later issue a briefing schedule, which will invite amicus briefs from other interested parties.

While the election among the University’s eligible student-athletes will still take place tomorrow, April 25, 2014, as scheduled, the ballots will be impounded, instead of counted, until after the NLRB issues its final decision.

A More “Militant” AAUP Coming to a Campus Near You?

Posted in Faculty, Labor, Unionization

university_PH03332IThe Chronicle has reported in the recent past about a division of views within the AAUP as to its proper focus.  In 2012, a slate of officers running under the “AAUP Organizing for Change” banner won election fairly handily (although only about 10% of the AAUP’s membership actually voted).  At the time of that election, a former AAUP Staff member described the election outcome as affecting “to a large extent, whether the association remains anchored principally to its commitment to the profession and its standards and principles or becomes an organization principally focused on a particular means—unionization—of achieving these objectives.”

This past February a slate of challengers, seeking to return AAUP to its traditional focus instead of a unionization focus, looked to unseat the “Organizing for Change” leadership.  At that time, The Chronicle reported on an interview given by Rudy H. Fichtenbaum, the “Organizing for Change” candidate  running for re-election as the AAUP’s president, in which he was said to have described “the real choice before the AAUP membership [as] whether the association would continue to build a national network of activist chapters or retreat into being a group focused on running a Washington office that weighs in on few controversies each year.”  Mr. Fichtenbaum was quoted as saying, “Our emphasis has totally been on organizing people.” Continue Reading

Michigan’s Affirmative Action Ban In Public Education Upheld By the Supreme Court

Posted in Affirmative Action

courthouse_24289004In a number of cases since Regents of the Univ. of Cal. v. Bakke, the Supreme Court has upheld in a variety of contexts the use of some degree of race based preferences in the admissions process for colleges and universities.  Although not its most recent decisions in this area, two of its most discussed decisions came out of Michigan.  In one, Gratz v. Bollinger the Supreme Court in 2003 found that the undergraduate admissions process at the University of Michigan violated the Equal Protection Clause of the U.S. Constitution by its use of race based preferences.  At the same time, it also held, in Grutter v. Bollinger, that the University of Michigan Law School’s use of race based preferences was permissible.

Following these decisions, Michigan voters adopted Proposal 2, which became Article I, Section 26 of the State Constitution.  As relevant, it provides:

The University of Michigan, Michigan State University, Wayne State University, and any other public college or university, community college, or school district shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting. (Emphasis added.)

 This Proposal was challenged in two cases.  The District Court initially found that it was permissible for the voters of Michigan to adopt this constitutional amendment.  The Sixth Circuit Court of Appeals, in an original 2-1 decision and a subsequent 8-7 en banc decision, held that the Proposal was unconstitutional.  Continue Reading

Potential Institutional Liability to the Accused in Sexual Assault Cases

Posted in Sexual Assault

university buildingRecent articles and postings not only highlight the continuing focus on sexual assault cases on college campuses by the victims of those assaults, but also on the threat of litigation by those accused of the assaults.  In the past two years, at least half a dozen actions have been brought against institutions by those accused, generally alleging various issues with the handling of their cases.  A recent decision by a federal court in Ohio, in Wells v. Xavier University, illustrates institutions’ potential liability to the accused.

In this case, a student athlete at Xavier was accused, falsely he claimed, by another student of a sexual assault.  The University’s Conduct Board found the student responsible for a “serious violation” of the Code of Student Conduct.  At some point, the University apparently issued a statement, naming the student, and indicating that he was “found….responsible for a serious violation of the Code of Student Conduct” and that he was expelled from the University. Continue Reading

The NLRB, Northwestern University and Unintended Consequences

Posted in Higher Education, National Labor Relations Board

As reported here last week, the NLRB’s Regional Director in Chicago has determined that those members of the Northwestern University football team who receive grants-in-aid are “employees” under the National Labor Relations Act.  Even aside from the questionable basis for this conclusion, the Regional Director’s decision begs the question what are the possible unintended consequences of this decision?  And there are quite a few, only some of which are mentioned below.

Perhaps the first unintended consequence is whether the Board’s determination, if upheld, will actually render these student athletes ineligible to play intercollegiate football.  Under NCAA By-law 12.1.2, only amateurs are eligible for competition under NCAA rules.  Therefore,  student-athletes may not use their athletic skill for pay in any form in the sport in which they compete.  If a student-athlete is receiving compensation for their services, as determined by the Regional Director, is that student-athlete now receiving “pay in any form in [their] sport” and as a result no longer an amateur able to compete?  The irony of course is if that ends up being the NCAA’s interpretation of its by-law, that would of course defeat the very purpose behind unionizing in the first place.  Moreover, this possibility is not dependent upon the student-athletes actually unionizing but rather on the mere fact that they are now “paid” for playing.  It would seem that if bargaining actually resulted and any additional benefits were provided to these student-athletes, the likelihood of a loss of amateur status would be even greater.

For any other “employee” being “compensated” for their services, income tax is required to be paid on that compensation.  While the test for an employee under the National Labor Relations Act may not be identical to the test used by the IRS, how far behind can taxation be?  Using the numbers reported in the Regional Director’s decision for the value of the players’ grants-in-aid (as much as $76,000 per year at Northwestern), where is a player, or his family, going to come up with the cash to cover this tax bill? Continue Reading

NLRB Regional Director Finds College Football Players Qualify as Employees and Can Unionize

Posted in Higher Education, National Labor Relations Board
Image courtesy of arkorn / FreeDigitalPhotos.net

Image courtesy of arkorn / FreeDigitalPhotos.net

In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the University) are “employees” under the National Labor Relations Act.  In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.”  Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University.

In support of his decision, the Regional Director found that the players receive compensation for the athletic services they perform in the form of scholarships, which pay for the players’ tuition, fees, room, board, and books and can total as much as $76,000 per calendar year for up to five years.  Furthermore, the Regional Director found that the players are under the strict control of the University throughout the year.  The coaches determine the location, duration, and manner in which the players carry out their football-related activities; they monitor the players’ adherence to NCAA and team rules; and they control “nearly every aspect of the players’ private lives,” including their living arrangements, applications for outside employment, off-campus travel, social media posts, and communications with the media.  In contrast, the Regional Director held that “walk-ons do not meet the definition of ‘employee’ for the fundamental reason that they do not receive compensation for the athletic services that they perform.”

The University has confirmed that it plans to appeal the decision to the full National Labor Relations Board in Washington, D.C.   If upheld, the decision has the potential to dramatically alter the world of big-time athletics in higher education as it would open the door for scholarship
athletes at all private universities to unionize.  Indeed, the decision could have implications for scholarship students in a number of areas beyond athletics.

The Union, College Athletes Players Association (CAPA), which has the financial backing of the United Steelworkers, is seeking, among other demands, financial coverage for former players with sports-related medical expenses and the creation of an educational trust fund to help former players graduate.

Recent Background Check Lawsuit is Reminder of the Importance of Strictly Following the Fair Credit Reporting Act Disclosure Requirements

Posted in Background Checks

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Many institutions of higher education, like employers in many industries, use background checks as an integral part of their hiring process.  A recently filed class action lawsuit serves as a reminder to institutions of the importance of strict compliance with the Fair Credit Reporting Act (FCRA).

The FCRA limits the purposes for which a background check (including a credit check or criminal background check) can be obtained.  One of the permissible purposes is for employment, including hiring decisions.  However, the Act imposes strict requirements in order to lawfully obtain and use a report.  One of those requirements is that the employer must provide applicants with a stand-alone disclosure and authorization form prior to obtaining a background check.  15 U.S.C. § 1681b(b)(2)(A).  This form must be separate from the employment application, and cannot include any type of language attempting to release the institution from liability associated with obtaining the background check.  Unfortunately, many institutions still fail to comply with this law by relying solely on a disclosure located on employment application to inform applicants that they will be subject to a background check, or by attempting to include additional language on the disclosure.

This particular requirement is the focus of a recent class action lawsuit filed against Whole Foods Market California.  Whole Foods is accused of using a legally invalid form to obtain consent to conduct backgrounds checks during their employment application process.  In this case, it is alleged that the employer relied on a background check consent that was included alongside several other consent paragraphs on an online employment application.  Additionally, that consent included a release of claims related to obtaining the background check.  If the employer is found to have used an invalid form the consequences are significant, including invalidation of the consent, statutory damages in the amount of up to $1,000 for each applicant, costs and attorneys’ fees and, potentially, punitive damages.

This lawsuit is a reminder that FCRA compliance makes good business sense, and that institutions should periodically review their application and hiring forms and processes to ensure strict compliance.

The National Labor Relations Board and Higher Education: More change on the Horizon?

Posted in Faculty, Unionization

After what seemed like a small lull in NLRB activity impacting Higher Education, the National Labor Relations Board has once again signaled potentially significant alterations to the legal landscape.

Just last week, the NLRB issued an “invitation” to file briefs in a case involving Pacific Lutheran University.  This specific case involves the interplay between organizing rights (in this instance for adjunct faculty) under Section 7 of the National Labor Relations Act and the Religious Clause of the First Amendment, which in 1979 the Supreme Court held in NLRB v. Catholic Bishop of Chicago precludes the NLRB from becoming entangled in religious issues (in that case the Court held that the NLRB could not require a union election among lay teachers at a Catholic school).

This “invitation” asks interested parties to address the appropriate test that the Board should apply under Catholic Bishop and to identify factors it should consider in determining the appropriate standard for asserting jurisdiction.

But the invitation goes much further than this question which is only of significance to religiously affiliated institutions.  The underlying Pacific Lutheran University case also includes a claim that the University’s adjunct faculty are managerial under NLRB v. Yeshiva University because, among other things, there are adjuncts who are voting members of the University’s Faculty Assembly, along with their tenured and tenure track faculty.  The invitation, therefore, also requests interested parties to identify those factors that the Board should consider most significant in making a managerial determination, as well as what evidence should be required to establish that faculty “effectively control” decisions.  In particular, the Board has solicited information on whether there have been “developments in models of decision making in private universities since the issuance of Yeshiva that are relevant to the factors the Board should consider in making a determination of faculty managerial status?”

What is the significance of this invitation?  It likely signals some significant changes in the near future.  The fact is that unless the Board were inclined to consider some dramatic moves in these two areas, it would not have needed (or wanted) to solicit briefs on these issues.  Stay tuned – given the recent history of this Board, significant change is almost certainly on the horizon.

Higher Education Institutions That Are Federal Contractors Face a New Minimum Wage Requirement

Posted in Federal Contractor

higher ed minimum wageWhile not all colleges and universities meet the definition of a “federal contractor,” many do perform contract work for the federal government.  Those institutions will be facing a new minimum wage obligation in connection with any new contracts.

On February 12, 2014, President Obama signed an Executive Order requiring that all new federal contracts and subcontracts contain a clause specifying that the minimum wage to be paid to workers under those federal contracts and subcontracts must be at least $10.10 per hour beginning January 1, 2015. The federal contracts and subcontracts covered by this Executive Order include procurement contracts for services or construction and contracts for concessions. This new $10.10 minimum wage will also apply to disabled employees who are currently working under a special certificate issued by the Secretary of Labor permitting payment of less than the minimum wage.

Beginning January 1, 2016, and annually thereafter, the minimum wage for federal contractors will be increased by the Secretary of Labor based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, and rounded to the nearest multiple of five cents. The Secretary of Labor is required to publish the new minimum wage at least 90 days before the new minimum wage is scheduled to take effect.

For those institutions that might utilize tipped employees, the hourly cash wage that must be paid by a federal contractor will be at least $4.90 beginning on January 1, 2015. In each subsequent year, the federal contractor minimum wage for tipped employees will increase by 95 cents until it equals 70 percent of the federal contractor minimum wage in effect for non-tipped employees. If an employee’s tips, when added to the hourly wage, do not add up to the federal contractor minimum wage for non-tipped employees, the federal contractor will be required to supplement the employee’s hourly wage to make up the difference.

The Secretary of Labor is expected to issue regulations by October 1, 2014, to implement the provisions of the Executive Order.

The Importance of Clarity: Institutional Website Descriptions Cause Congressman to Question Financial Aid Application Processes

Posted in Financial Aid

higher ed financial aidSince 1992, the Higher Education Act has required colleges and universities to determine applicants’ eligibility for federal aid programs only through use of the Free Application for Federal Student Aid (FAFSA).  On February 3, 2014, Rep. Elijah Cummings, the ranking Democrat on the House Committee on Oversight and Government Reform, sent a letter to Secretary of Education Arne Duncan in which he identified 111 colleges and universities he believes to be requiring applicants to complete forms other than the FAFSA to apply for federal aid.

The information set forth in the letter was gleaned from a survey of institutional websites, many of which, the letter claims, reflect the use of forms other than the FAFSA (such as the College Board’s CSS Profile) to determine eligibility for federal IV aid, or, at a minimum, provide unclear guidance to applicants as to whether additional forms are required.  In reality, the majority of institutions are likely administering programs correctly, requiring applicants to complete only the FAFSA for federal aid purposes but using other data collection tools for institutional and other non-federal aid purposes (and encouraging submission of the additional information in order to maximize accessibility).  However, institutions’ descriptive materials may not clearly reflect these compliant practices.

It is not clear what, if anything, the Education Department may do in response to Rep. Cummings’ letter.  Although it appears that Rep. Cummings is suggesting only an admonishment to institutions, colleges and universities should use this opportunity to ensure that their website disclosures and other descriptive materials made available to applicants clearly identify that only the FAFSA is required for federal aid purposes (and, of course, that they are administering the application process in a corresponding manner).