Universities – UpdateED

December 20, 2022 by Katherine D. Brodie

Do College Athletes Have the Right to Join a Union? The Answer is Still “Maybe”

Overview: Back in September 2021, the National Labor Relations Board general counsel issued GC Memorandum 21-08, formally taking the prosecutorial position that certain college and university athletes are employees entitled to all of the rights guaranteed by the National Labor Relations Act. This would include the right to engage in certain protected concerted activities, such as strikes, and to organize to join a union. For private colleges and universities, formal, legal recognition of student-athletes as “employees” would significantly change the relationship between schools and athletes.

Discussion: Back in September 2021, General Counsel Jennifer Abruzzo of the National Labor Relations Board (the “Board”), who leads the enforcement arm of the Board, issued GC Memorandum 21-08, formally taking the prosecutorial position that certain college and university athletes are employees entitled to all of the rights guaranteed by the National Labor Relations Act (the “Act”). This would include the right to engage in certain protected concerted activities, such as strikes, and to organize to join a union.

This is not the first time a Board general counsel has taken this position; Richard Griffin, appointed by President Barack Obama, issued a similar memorandum in 2017 that was later rescinded by his Republican successor, Peter Robb, appointed by President Donald Trump. Abruzzo, however, has taken this legal analysis a step further, arguing that “misclassifying” collegiate athletes as mere “student-athletes,” and leading athletes to believe that they do not have statutory protections, violates the Act in and of itself.

For private colleges and universities (the Act does not apply to public institutions of higher education), formal, legal recognition of student-athletes as “employees” would significantly change the relationship between schools and athletes. To start, schools would have to guess whether an athlete qualifies as an employee in the first place. Guessing incorrectly could have expensive consequences, as merely mislabeling the student could risk violating the Act and require defending against the ensuing charge.

As employees, athletes would have the right to engage in collective action, which could clash with school codes of conduct or campus rules. And, should student-athletes choose to organize and vote to join a union, the school would be required to engage in good faith collective bargaining over wages, hours and other terms and conditions of the athletes’ “employment.” The implications of such an arrangement could be significant: Would this require negotiations over the costs of meal plans and housing? What about school-sponsored health insurance plans? Would student-athletes gain the right to have union representation in disciplinary proceedings? Classifying a school’s athletes as employees would undoubtedly unleash a Pandora’s box of issues and questions.

Since publishing the memorandum over a year ago, Abruzzo’s office has yet to prosecute a test case that would give the Board (currently a 3-2 Democrat majority) the opportunity to formally adopt the position that certain student-athletes are employees under the Act. However, private colleges and universities should not assume that this agenda item has been forgotten.

There are a couple of pending cases against the National Collegiate Athletic Association alleging that it has misclassified student-athletes. And, on December 15, 2022, Abruzzo announced that her office found merit in at least one pending unfair labor practice charge case, which could result in a formal charge (giving her a pathway to litigate the issue up to the Board). Meanwhile, there are other legal efforts to classify collegiate athletes as employees through legislative or judicial action.

In short, private colleges and universities should stay alert to this classification issue and keep an eye out for signs of union organizing among college athletes, particularly football players at Division I Football Bowl Subdivision private colleges and universities. Though it is impossible to predict how this battle over collegiate athletes will unfold, one thing is certain: It is not going away any time soon.

For More Information

If you have any questions about this Alert, please contact Elizabeth Mincer, Zev Grumet-Morris, Katherine Brodie, or any of the attorneys in our Education Industry Group or the attorney in the firm with whom you are regularly in contact.

January 14, 2021January 14, 2021 by Valentine A. Brown

University Hiring Season is Here: Immigration Questions and Strategies

Hiring season is fraught with questions and uncertainties; preparing employment applications; interviewing, drafting offer letters….. What questions can be asked? What questions should be asked? These concerns are even more pronounced when it comes to immigration status, and immigration sponsorship. Those tasked with the hiring process often ask, whether it is legal to ask applicants about their immigration status, how to ask that question, and even more important, “Do we have to sponsor for immigration status if the applicant needs it?” Continue reading “University Hiring Season is Here: Immigration Questions and Strategies”

October 12, 2020 by Deanna J. Lucci

COVID-Related College Tuition Refund Claims Dismissed

Since the global pandemic forced most college campuses to resort to online instruction in March 2020, college students across the country have filed more than 150 lawsuits against their schools seeking refunds of tuition and related fees.

This month, a federal judge in Boston made the first dispositive ruling in such a case against Northeastern University – tossing out most of the claims asserted by the students in a putative class-action matter. Judge Richard G. Stearns of the District of Massachusetts found in Chong v Northeastern University, 20-10844-RGS, that the contract between the university and its students (the Financial Responsibility Agreement, “FRA”) did not specifically include a right to in-person instruction. The Judge noted that the FRA ties the payment of tuition to the registration for courses, “not to the receipt of any particular method of course instruction.”

The Judge also dismissed the students’ claims seeking a refund of certain student fees, such as student activity fees, finding that they paid the fees to support certain campus facilities – not necessarily to gain access to them. Thus, the Court gave no credence to the students’ claims that they should receive a refund of activity fees because the school prevented them from accessing those facilities due to the pandemic.

However, the Court did allow the students’ claims seeking a refund of campus recreation fees to go forward, finding that the students’ payment of those fees may have implicitly created a right to attend home athletic events and use the campus gym and fitness facilities, which ceased on March 12.

Judge Stearns’ ruling may be a sign of things to come for the many similar lawsuits currently pending against colleges and universities throughout the country. However, as in this case or any breach of contract action, these rulings will likely turn on the specific language of the applicable contract between the institution and the student.

September 28, 2020September 27, 2020 by Valentine A. Brown

Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice

On September 25, Immigration and Customs Enforcement (ICE), the DHS agency with jurisdiction over F-1 foreign student visa holders, published new proposed regulations that would end the long time U.S. practice of issuing “Duration of Status” to F-1 students. Instead, F-1 visa holders would be limited to 2 or 4 year visa terms depending upon their country of origin, and be required to reapply for F-1 Status through USCIS to obtain extensions, or to leave the United States and apply for an extension . The proposed regulations were immediately criticized by the higher education community. The rules were called ill-conceived, misguided, unnecessary, and a burden to an industry that has already seen a steady decline in international student admissions. Continue reading “Proposed Student Visa Rules will Upend Decades of U.S. Policy and Practice”

April 3, 2020 by Katherine D. Brodie

U.S. Department of Education Posts Updated COVID-19 Guidance for Institutions Following Enactment of CARES Act

Late on Friday, April 3, the Department posted updated guidance for institutions that recognizes the regulatory flexibilities authorized by Congress in the CARES Act, but also addresses other areas including Clery Act, Distance Education, Foreign Schools and FERPA, among other issues relevant to the COVID-19 interruption. The guidance is effective through June 30, 2020 unless otherwise extended by the Department. The Higher Education Relief Fund portion of CARES ACT is not addressed and will be the subject of future guidance.

ELECTRONIC ANNOUNCEMENTS

– April 03, 2020
(OPE Announcements) Subject: UPDATED Guidance for interruptions of study related to Coronavirus (COVID-19)
https://ifap.ed.gov/electronic-announcements/040320UPDATEDGuidanceInterruptStudyRelCOVID19

November 19, 2019 by Katherine D. Brodie

Lease Points Colleges and Universities Should Not Miss

DO NOT BE FOOLED BY “STANDARD FORM LEASES” and
BEWARE OF CHANGING RULE ON TREATMENT OF LEASES IN TITLE IV COMPOSITE SCORE

There is no such thing as a “standard lease,” even if the document has that title at the top.

Julie Mebane, Partner (Real Estate), Duane Morris LLP

If your institution is reviewing a lease form and you are considering signing it for the tenant, make sure that you don’t gloss over it in the belief that its terms cannot be negotiated. Usually, many lease terms can be modified and the tenant’s position can be enhanced if you pay attention to its language, especially a few important provisions:

Consider starting out by having both landlord and tenant sign a term sheet with the key business points summarized. This can avoid confusion and disagreements later when the lease is reduced to writing.
Pay close attention to the description of the leased premises. Make sure that the location and the number of rentable square feet are included and accurate, and consider including a space plan as an exhibit.
Double-check the rent calculations in the lease. With regard to periodic rent increases, you may want to include a chart that summarizes the timing and amount of rent increases, rather than just a description like “3% rent escalations per year.”
If the tenant will be paying operating expenses as part of its rent, consider negotiating a cap on the amount of annual increases that can be passed through to the tenant.
Ask the landlord to pre-approve and describe in the lease any up-front alterations or other work of improvements the tenant needs to do on the premises.
In the use clause, more general language benefits the tenant. Try to include the right to conduct “office and other administrative uses” or possibly “all other lawful uses.” You may enhance the tenant’s right to assign and sublet in the future by broadening the use clause.
With regard to the parties’ respective maintenance and repair obligations, be sure there is a complete description of the landlord’s duties. Try to include structural maintenance and repairs, floors, ceilings, roofs, windows, HVAC and building systems, interior plumbing and wiring in the landlord’s list.
Get a representation from the landlord that the premises and the property are in compliance with applicable laws and in good operating condition and repair as of the commencement date.
Try to negotiate the surrender language so the tenant does not need to remove all of the tenant improvements, cabling and furniture, fixtures and equipment at the end of the term.
Beware of leased spaces formerly occupied by Title IV institutions. See our [date] blog post on that subject.

These provisions of a lease, and many others, can usually be negotiated and improved for the tenant. Don’t consider any lease, even a pre-printed form that says it’s “standard,” to be carved in stone.

New and Extended Lease Rules Are Changing for Title IV Composite Score Purposes

Katherine Brodie, Partner (Education), Duane Morris LLP

On September 23, 2019, the U.S. Department of Education published a Final Rule that applies to all higher education institutions that participate in the federal student financial aid programs under Title IV of the Higher Education Act (“Title IV programs”).

Specifically, the Final Rule amends the annual Title IV financial responsibility composite score to take into account the Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-2, which requires that leases be treated as both right-of-use assets and liabilities. Public entities must adopt 2016-2 for leases entered into after fiscal years starting on or after December 15, 2018. Private entities must adopt the new standard starting January 1, 2020. FASB, however, has proposed delaying the private entity implementation date to January 1, 2021.

The Department of Education’s Final Rule exempts all leases entered into before December 15, 2018 from application of 2016-2 for composite score purposes. For leases entered into on or after December 15, 2018 (which the Department states can include extensions or modifications of pre-December 15, 2018 leases), auditors must apply FASB ASU 2016-2 and, as a result, some institutions’ composite scores may be adversely impacted. Since FASB ASU 2016-2 does not subject private entities to the new standard until at least January 1, 2020, there is an argument that the Department should not have an institution’s official composite score calculation reflect the new lease accounting standards until such time as the new standard is required under GAAP, but the Department has not yet clarified its position on this point (despite several pending requests for clarity on that point). Bottom line, as institutions negotiate new leases or seek to extend or modify current leases, they should consult Title IV counsel and their auditors for guidance because certain lease terms may significantly impact the carrying value of a leased asset under the new FASB standard as applied by the Department of Education.

June 12, 2019July 30, 2019 by Duane Morris

U.S. Department of Education Confirms New Reporting Requirements Apply to Public Colleges and Universities

On June 3, 2019, the U.S. Department of Education issued a Q&A document regarding compliance with the BDR Rule that confirmed that the reporting requirements for certain “triggering” events will be enforced at all institutions, including public colleges and universities. This information supplements the Department’s March 15, 2019, guidance regarding the 2016 BDR Rule.

The Department’s Q&A makes clear that public institutions are required to report, pursuant to 34 C.F.R. 668.171(h), the following events within the stated time periods:

Borrower-defense-related lawsuits brought by a federal or state authority: within 10 days after the institution is served with the complaint and then again within 10 days after the suit has been pending for 120 days.
All other lawsuits: within 10 days after the institution is served with a complaint, then again within 10 days after the court sets certain deadlines relating to motions for summary judgment (MSJ) or disposition, and then a third time within 10 days after certain events relating to an MSJ or dispositive motion occur.
Any debt or liability arising from a final judgment in a judicial or administrative proceeding: within 10 days after a payment was required or the liability was incurred.
Any settlement, including settlements reached prior to the initiation of a formal legal proceeding: within 10 days after a payment was required or a liability was incurred.

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To read the full text of this Alert, please visit the Duane Morris website.