This transcript has been auto-generated
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[Music] hello and welcome to the Husch Blackwell
Labor Law Insider podcast I'm Tom Godar your
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host and I'm glad that you've come along in this
podcast we welcome guests with practical expertise
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and experience regarding labor law issues and
they share their insights related to this ever
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changing area the breadth of developments in
laws related to unions and individual workers
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rights that we are experiencing under the Biden
appointed National Labor Relations Board and led
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by general counsel Jennifer Abruzzo is unprecedented
these developments demand that employers and those
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giving counsel to organizations stay tuned into
these changes and make necessary adjustments
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to their practices and policies when President
Biden was elected he promised to have the most
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union-friendly Administration ever and he is
fulfilling that pledge so buckle up and hang
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on for this wild and wonderful ride in the world
of labor law good afternoon sports fans well this
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is the Labor Law Insider but I've always wanted to
say that nobody's invited me to be a broadcaster
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except for curling and I don't want to even
get into that story but we're going to talk
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about College athletics and the most interesting
development we've seen in a little while about
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the trustees of Dartmouth College and the Service
Employees International Union read we now have a
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union made up of a basketball team at the college
level and that's um pretty recent stuff and it's
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a lot of fun since this is also the week I don't
know exactly when we'll get this edited and out
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but we're looking at the brackets right now this
is Monday uh the start of uh March Madness week
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and so talking about a basketball team which
by the way is not in the tournament in fact
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they have one of the longest terms of not being
invited to the tournament of any d one basketball
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program that's stting but to talk about the Nexus
between labor law and College athletics is pretty
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interesting and we have the really the right guys
to do that uh you've you've heard from on the Husch
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Blackwell a Labor Law Insider a couple of these
guys and we have a thousand lawyers spread around
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the country but I don't know of any two that are
better situated to help us sort of walk through
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this process than Tyler Paetkau and Jason Montgomery
uh Jason Montgomery himself was an All-American
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athlete but not at a D1 football program but
an niia program but he knows a lot about the
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rigors of being a student athlete and the control
that they uh that the athletic department coaches
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and so forth put on you which is one of the big
deals in the dep uh Dartmouth decision affecting
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basketball not football um and Tyler Paetkau is
one of uh my sort of go-to guys I'm want Tyler
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to do my brackets for the tournament because he
loves loves College athletics he's a Michigan fan
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which is you know I try to forgive him for that
when I can but not always uh so well done on on
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football I'm not show much uh for your basketball
this year but you know things happen man next
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year maybe I can't yeah I can't say it was an
All-American like Jason but I did watch a lot and
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also engage in a lot of theal social activities
on campus well Jason practices primarily out of
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our casy office but he's also got a lot of chops
and NC AA issues and he was an NCAA regulator if
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you will and watched how the the NCAA was engaged
with its colleges and with its athletes and and
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Tyler practices in Oakland but again nationally
he was just doing some work for one of our big
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universities here in the Midwest I don't generally
name the names of our clients on this but uh so
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this is really a fun group to talk about this
today and so let me kick it off I I think we
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should probably what is going on in terms of this
Dartmouth College decision somebody just give us a
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30,000 foot level what happened in the last couple
of months Tyler why don't you kick it off so um
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for those of you who follow the news uh it's
been in the news lot the last couple weeks the
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Dartmouth University was subject to a petition by
its men's basketball team filed by the SEIU it is
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local 560 in Hover and the 15ers men's basketball
team contended that they were in fact statutory
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employees under the act and they won at least at
this level uh the regional director there Laurel
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saaks issued an opinion directing an election and
based on some of the recent board memoranda advice
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memoranda and other decisions the nor Northwestern
case the USC case that we talked about I think on
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our last podcast this is hardly surprising at
least to us at this point and I would say also
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that if they can organize Dartmouth then they can
organize a lot of other universities and colleges
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Across America and this is just I hate to say but
just the tip of the iceberg at this point Jason
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in your prior life and in your life uh today with
with hush advising uh colleges and universities um
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it's our impression it's my impression that the
American college system of Athletics is largely
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unique worldwide um I'm told that there's almost a
tril milon dollars of income generated uh College
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athletics around the country on an annual basis
that the NCAA itself has something like a half
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a billion dollars in assets and that its income
just as the NCAA is somewhere in the neighborhood
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of 1.3 billion as of 2023 that's a lot of D um it
affects something like I saw this number 520,000
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participants in NCAA champion I ship Sports around
the country is there anything else like this in
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the world that you're aware of you know there
really isn't there are some here and there there
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are few countries that have Intercollegiate type
Athletics programs but but very rarely and so you
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know this is um you know uh the country that you
know many you know International athletes come to
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for training because of the system and the amount
of money that's put into the system for training
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purposes in fact the one thing I would will say
about the billion dollars in gets into why perhaps
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we are where we are is that you know a significant
portion of the trillions and the the billion that
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the NCA has is specific to the men's basketball
tournament that we're talking about today it's all
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about the television rights to to to have that
and that billion dollars essentially funds the
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entirety of the NCAA and then is distributed
to the member schools to fund their programs
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and so um it where I think there are concerns it's
about economic fairness to those athletes that are
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participating in the men's basketball tournament
whether they are compensated appropriately
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with scholarships or otherwise in Dartmouth
interestingly you know one of the few division one
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schools that don't offer Scholarships in the Ivy
and you know overall this nlrb decision that we're
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going to talk about further is really one of many
decisions that have been occurring in the last
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five years by courts some by by state legislator
and others that are attacking this concept of
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economic unfairness well and last time we talked
about it uh lots of the talk was within the area
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of athletes being able to themselves receive some
compensation sometimes it's huge compensation for
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their name for their image for their likeness that
isn't just acing to the benefit of the university
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and I love the way you framed it Jason in terms
of this larger economic or not and this General
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sense of where does fairness come out it seems
odd to me I'll be honest with you that it's the
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nlr B that's playing the game but not within the
way that Tyler framed it up earlier with a really
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aggressive board and its general counsel that said
we want to be much more relevant to the sort of
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workplace broadly defined than just the unionized
workplace and so this plays right into it this
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notion by the way that this the nlrb driving it
actually drives out a whole lot of the colleges
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that are going to be in the tournament over the
next two weeks plus um three weeks plus and it
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really relates only to a subsection of it by its
own design Tyler why don't you help straighten us
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out on where that sort of jurisdictional line
lays sure so Dartmouth is a private nonprofit
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University of course uh there's many in that c
category they're regulated potentially by the nlrb
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and it's to be contrasted with the vast majority
of State schools that potentially could as as
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we talked about before this podcast potentially
could be dragged in if they name the NCAA or the
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conference of private entity as a respondent but
technically this is against private employer so
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the the big five conferences many of which are are
State schools are not directly affected however we
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know about the USC case where the nlrb named as
a respondent not only USC a private school but
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also the NCAA and the Pack 12 Conference so we
could see state universities and colleges also
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being named in these petitions so that's really
the limit um but it's not really a limit so and
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we know that there are an awful lot of private
schools but perhaps not as many playing at that
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highest level of D1 competitive athletic but
does that necessarily mean that they wouldn't
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be subject to potentially this organizing and
it really takes us to you know that step of why
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is it that the board and they used IR rationale
and while I agree or disagree with it um their
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rational had to do with some of the traditional
indicia of employment why is it that they found
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that these um 15 basketball players all of whom
will have graduated or left the program within
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three or four years it's just kind of funny to me
this way but why they found these athletes also
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employees and not athletes solely what kind of U
IND condition did they use to take a look at that
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Jason given the control that you became aware
of when you were a college athlete talk about
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at least that one piece of it that is the control
aspect that an employer might have over employees
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or in this case a program over its athletes yeah
it's really interesting because you know kind of
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the nature of Athletics requires some scheduling
the nature of extracurricular activities requires
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some level of of scheduling and the nlrb said that
was you know equivalent to control because you
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controlled the movements and the time frame within
which were athletes were going to participate you
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know whether that's at home or on the road
but really most interesting and and probably
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interesting to some of our listeners as they're
reviewing their own policies and procedures
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was the you know essentially likening a student
athlete handbook which many institutions have that
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has what your requirements are to be an ath that
the NDA has set for those being academic and and
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so forth liking that to an employee handbook and
saying many of the things in here uh we would see
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an employee handbook where you know there are you
know certain requirements of employees and times
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within which they can participate and uh you know
opportunities for penalties if they are ineligible
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or if they do something that is inconsistent
with University policy they could be taken off
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the court for example and all of that seems uh
are are these ideas of control now when I was an
0:12:04.560,0:12:10.880
athlete I was just uh happy to be on the field and
I think you know uh you know to the extent I think
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that we would practice you know seven days a week
at at one point the ni had no rules related to uh
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you know 20 hours is what the the NCA has and so
it's really interesting looking at and kind of
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comparing individual experiences because you could
see that if if this logic is app in the way it's
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written without this idea of economic fairness
because men's basketball makes a lot of money
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then it does apply to niia schools it applies
to division 3 schools and and I'm not certain
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that institutions are are ready for that yeah the
the athletes have to sign all sorts of documents
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and promise that they're going to practice or not
practice that they can practice with coaches and
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without coaches where their training table is
what they're going to eat or not eat when when
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they're going to be available to come to um all
of the events as you said scheduling is is primary
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and don't take these classes because if you take
those classes you're not going to be able to make
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the practice or or to the film room and all that
sort of thing so when I've talked to parents and
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that's I've not had these these kinds of kids but
when I've talked to parents with D1 athletes my
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gosh they tell me how crushing um some of these
things are it really is full-time plus isn't it
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yeah you can see that Tom in the decision you
know there's a a couple of lines I just read
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that illustrate that the control that the board
is relying on in these cases quote when players
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travel to away away games the coaching staff
requires players to travel eat and sleep as a
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group The Players also attend meetings review film
interact with alumni conduct media interviews and
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sign autographs as directed the coaching staff
shapes the itinerary for departure time travel
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time Hotel checkin meals and lights out and then
they provide an example of a practice I think in
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exhibition game against Princeton actually it
was a real game against Princeton in January
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2023 where it's down to the minute what these
student athletes are supposed to do including
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spending time with alumni signing autographs and
presumably getting those donations so you know I I
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think this started really with the nil decision
by the Supreme Court uh subjecting the NCA to
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potential antitrust liability and freeing up the
money for the athletes to J Jason's point about
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the fairness not so much you know I'm surprised
they picked Dartmouth minc basketball but at some
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schools football and basketball generate enormous
amounts of money for the University and you can
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see an argument there where they're really you
know leading to the professional athlete um it's
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more regimented and they're actually producing
substantial revenue for the school yeah I read
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before and preparing for this that the income
for Ohio State University again not in this
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discussion exactly because they are public sector
University number one so I am also going to the
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outlier on the high end a quarter of a billion
dollars $251 million and I don't know if that
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states every nickel or if that just States the
direct lines that you can read from the athletic
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department as opposed to some of the other
sort of alumni engagement so it it is a it's
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a it's a startling number and there's a startling
control but let's talk about much smaller numbers
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that at least in this Dartmouth case talk about
compensation because under the traditional test
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for employment you had control and compensation
so what's the compensation piece which I found
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frankly startlingly small in the traditional sense
uh but they seem to include other things that are
0:15:55.920,0:16:01.840
kind of wishy-washy in terms of compensation uh
so what's the compensation piece they found was
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sufficient for Dartmouth either of you can jump
in yeah so you know I thought it was interesting
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I was reading that as well as as someone who
doesn't practice in this area and in the labor
0:16:10.880,0:16:17.080
area uh they found that you know thousand you
know shoes that were used to participate you
0:16:17.080,0:16:23.440
know I think they said $1,000 worth of shoes
uh for per athlete um that and equipment and
0:16:23.440,0:16:28.200
apparel that are provided which I think some
would argue that's just necessary to engage in
0:16:28.200,0:16:34.600
the activity it's not uh any sort of compensation
how much do the band members get paid for their
0:16:34.600,0:16:39.360
uniforms I think they're provided for free maybe
the band should organize too I don't know yeah
0:16:39.360,0:16:45.000
and then they they came to the conclusion that
compensation of a non-traditional form in this
0:16:45.000,0:16:50.480
case the analysis of that is appropriate because
NCA rules prohibit traditional compensation now
0:16:50.480,0:16:57.120
what they didn't say is they don't prohibit giving
scholarships uh but Dartmouth does d you know so
0:16:57.120,0:17:03.760
theoretically one of the Solutions you could
think of is if Dartmouth provided scholarships
0:17:03.760,0:17:12.320
if they negotiated how do that impact the concept
of the ivy league in general yeah because the the
0:17:12.320,0:17:17.160
Dartmouth and the ivy league does not present
ethletic scholarships and theoretically the
0:17:17.160,0:17:22.480
students who are playing basketball are just
eligible to receive the scholarships that are
0:17:22.480,0:17:28.360
made eligible to any um student is that at least
what the the case suggests exactly and and and
0:17:28.360,0:17:32.440
they say you know and they're not eligible to
receive any other compensation under NCA rules
0:17:32.440,0:17:39.600
so we have to look at these non-traditional which
is assuming in some respects that it would be
0:17:39.600,0:17:45.120
appropriate for them to receive some level of
compensation whether scholarship or otherwise
0:17:45.120,0:17:51.440
based upon their Athletics participation which
gets to the heart of the college athlete model
0:17:51.440,0:17:58.000
that you and Tyler mentioned I think has has first
been you know significantly blows been drawn to
0:17:58.000,0:18:03.800
in in the antitrust world with the alustin uh
the NCA versus Alon decision what are some of
0:18:03.800,0:18:10.560
those other indicia of compensation Tyler and do
we see those in any other sort of board case no
0:18:10.560,0:18:16.200
you know as Jason mentioned non-traditional and
the board at least the the director in this case
0:18:16.200,0:18:24.080
Laura sax emphasized that even a small amount of
compensation is enough to start out with and I was
0:18:24.080,0:18:31.240
surprised that they considered the benefits of an
early read on admission at Dartmouth a significant
0:18:31.240,0:18:37.440
non-traditional compensation in other words since
the admission rate is so low six 6% I think the
0:18:37.440,0:18:43.240
last year that if you know in advance as a student
athlete you're going to get financial aid to go to
0:18:43.240,0:18:49.160
Dartmouth and you're in based on the admission
standards that's a significant benefit according
0:18:49.160,0:18:57.280
to this alj they also as J Jason mentioned that
the Appel the the tickets for games uh basketball
0:18:57.280,0:19:04.240
shoes lot in meals and other benefits of its Peak
Performance program a lot of the training and
0:19:04.240,0:19:10.480
support that they give student athletes to perform
are then considered according to the LJ to be
0:19:10.480,0:19:19.360
employment benefits it's funny because dartmouth's
basketball program didn't generate a profit um so
0:19:19.360,0:19:24.880
they said who cares we're not here to tell you
how to run your business but the board director
0:19:24.880,0:19:32.040
the regional director uh did look at things like
well well there's probably an unknown intangible
0:19:32.040,0:19:38.400
benefit to the university by having a basketball
program and that probably then generates some
0:19:38.400,0:19:45.320
additional uh delivery of gifts to the university
or to the University's athletic department so on
0:19:45.320,0:19:50.040
one side you know traditional business issues like
you know generating a profit not important but the
0:19:50.040,0:19:55.640
sort of intangible benefits that the university
receives by having athletic uh programs uh was
0:19:55.640,0:20:00.120
weighed heavily it's a sort of benefit to the
university that's why exercise the control and
0:20:00.120,0:20:05.160
give early admission and so forth I guess yeah I
mean part of that is meeting with alumni getting
0:20:05.160,0:20:10.480
the word out you know there was evidence that they
were encouraged to post on social media promoting
0:20:10.480,0:20:17.560
Dartmouth wearing Dartmouth apparel uh all of that
um to benefit the school they also mentioned just
0:20:17.560,0:20:24.200
in the context since we're in the March Madness
season if one Ivy League school qualifies all Ivy
0:20:24.200,0:20:30.000
League schools get paid you know out of those TV
rights and and other benefits from being admitted
0:20:30.000,0:20:35.680
so it's been Princeton historically but all of
them benefit so at least the reasoning in this
0:20:35.680,0:20:43.120
decision was by promoting the the uh College uh
publicly by soliciting donations or not directly
0:20:43.120,0:20:48.720
soliciting but being there to shake hands uh
grip and grin as I say hey Tyler thanks a lot
0:20:48.720,0:20:53.440
I I really like the idea that student athletes
are expected to grip and grin that that's part
0:20:53.440,0:20:59.480
of the control that the university might place
over them but gentlemen with if your approval
0:20:59.480,0:21:03.360
I'm going to push the pause button right now
we're going to start this up again in a week or
0:21:03.360,0:21:09.360
so with you fellas and I'd really like to find
out a little bit more about how we're going to
0:21:09.360,0:21:16.160
differentiate between Dartmouth and other schools
other uh school activities and then get a little
0:21:16.160,0:21:21.120
bit of your Insight on predictions as well
as practical steps that universities can be
0:21:21.120,0:21:28.240
taking now even as this issue is in the state
of flux so Tyler Jason thank you so much for
0:21:28.240,0:21:36.000
joining us on the Labor Law Insider podcast and
we'll be back at it in just a short [Music] time