Scholar and Athlete Employment Standing Memo Raises Comp, Insurance Points – Enterprise Insurance

Years of debate over the employment status of students and athletes took a big step forward last month when a new memorandum from the National Labor Relations Board advised that they should be considered workers, affecting college and university insurance Has employee compensation.

Labor lawyers say the memorandum is likely to lead to increased litigation and organizational activity by athletes, along with broader protection for employee behavior.

On September 29, NLRB General Counsel Jennifer Abruzzo released a memo stating that the prosecution believed college athletes to be statutory employees under the National Labor Relations Act, with rights and protections under federal labor laws.

"What is likely to happen is that universities that do not recognize employment status could face unfair labor practices," said Jon Israel, partner at Foley & Lardner LLP in New York and head of the company's sports and entertainment practice group.

“The General Counsel went a step further when it said that if a university does not recognize and treat its Division I football players as employees, it can in and of itself have a deterrent effect on players' sense of protection collectively on topics such as concussion protocols or social justice issues, ”said Jack Merinar, a member of Steptoe & Johnson PLLC in Bridgeport, West Virginia.

The memorandum will also have implications for liability insurance for employment practices and “bring into play all of the elements that we think of in a more traditional employment environment,” Merinar said.

"Resignation lawsuits, discrimination, harassment from hostile environments could become work-related claims, and universities may find it necessary to approach their insurance strategy from that perspective," he said.

"That's all with a huge caveat that it depends on whether other athletes see athletes as employees."

There is no state or federal mandate guaranteeing employment status for student athletes. The NLRB Memorandum only expects the universities that in the event of a lawsuit, in the eyes of the NLRB, student athletes will be employees and will be protected. What employment status means for the insurance needs and risk profile of universities raises more questions than answers.

"Every state has to deal with it," said Israel. “It depends on who calls them an employee and when, and there may be some federal law that does this first, and if so, what does that mean for trade association insurance? Will it require specific coverage or is it just an option? And the costs cannot be foreseen yet, but would increase significantly given the risk of injury from the 'work' they do. "

There is also an income-related capacity to consider, as workers' compensation is linked to wages, added Mr Israel.

“Will it be tied to scholarships? Wages? It will be a whole new world and it can vary from state to state, ”he said.

Historically, under NCAA guidelines, schools have had some leeway to insure their elite athletes against injuries. The memo, Merinar said, also raises questions about whether restrictions on insurance programs that affect student athletes could be subject to antitrust challenges.

"There are so many levels," said Mr. Israel, "in the compensation, be it grants or wages that will affect taxes and benefits – disability insurance, government-mandated compensation and what those covers might look like." , has yet to be seen, but the cost would probably be quite high. "

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