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Tom Godar
Welcome once again to the Labor Law Insider podcast. This is your host, Tom Godar I've been practicing law in the labor area north of 40 years. Hard for me to admit that. But all of this began back in May of 2021, when it was the premise of my colleagues and I and Husch Blackwell, that elections have consequences. In the meantime, in those past three and a half, four years, the Husch Blackwell family of labor lawyers has doubled.
00;00;32;17 - 00;01;05;21
Tom Godar
We've got incredible insider experience throughout our offices from coast to coast. And we've invited others from outside of Husch Blackwell to join us on occasion as well. And so we are really excited to continue our Labor Law Insider podcast. And we promised you that it was a wild ride back in 2021. Well, folks, I just got off another call, read some more information on the Internet, looked at a few more articles, and I promise you that we're in for another wild ride in the world of labor law.
00;01;05;21 - 00;01;31;09
Tom Godar
So buckle up and join us for the Labor Law Insider podcast. It is January 21st, 2025, the first day of the Trump administration. And I'm Tom Godar your host of the Labor Law Insider. Welcome. It is wonderful to have you as we kick off our Labor Law Insiders for 2025. And there's lots to talk about, but we're going to start out with one of the most popular topics that we've seen.
00;01;31;09 - 00;01;55;11
Tom Godar
People liked it and moved it onto their friends. This was talking about what's happening to student athletes as employees on campus. We've talked about the Dartmouth basketball team trying to form a union and we'll talk some more about that. But generally speaking, with the new administration, we might see some changes in which we're going to determine who's an employee, how they're going to unionize if they have the right to unionize.
00;01;55;23 - 00;02;22;12
Tom Godar
And we've already seen huge changes with regard to name, image and likeness, the opportunity for universities and maybe the obligation for universities to pay athletes directly and lawsuits regarding that and all sorts of really wonderful stuff. And also, this is the first day of the Trump administration, as I mentioned. And already we're seeing some of the changes, appointment and hiring freezes in the federal government and so forth.
00;02;22;23 - 00;02;44;02
Tom Godar
So that's taking place even as we speak. So by the time you hear this, maybe we'll know some more. But at the moment, for instance, President Trump has reappointed Mr. Kaplan and now Chairman Kaplan of the National Labor Relations Board, a role he had before the Biden administration took over. And that's just a harbinger of what's to come, I believe.
00;02;44;12 - 00;03;08;11
Tom Godar
But to join me on this wonderful presentation, I've got a couple of my partners and colleagues who have helped us walk through this whole notion of student athlete employees in the past, and I'm really excited to welcome them again. First, we have Jason Montgomery, who practices basically university NCAA law, and he does this out of our Kansas City office.
00;03;08;11 - 00;03;21;04
Tom Godar
But this touches nationwide because the NCAA touches, gosh, hundreds of thousands, maybe millions of athletes and their families every year. Jason, welcome to the Labor Law Insider for 2025.
00;03;21;12 - 00;03;28;08
Jason Montgomery
Thank you, Tom. Pleasure to join you and talk about these interesting developments in college sports and and their interplay in labor law.
00;03;28;27 - 00;03;59;28
Tom Godar
Well, it's great to have you here. And joining us as well is one of my favorite guests. He comes from California in the Oakland area. Tyler Paetkau. Tyler has been practicing for a long time, recognized as is Jason, by so many of his peers as best lawyers and all that kind of good stuff. He loves college athletics, especially the fact that the national champion from last night, the national champion, Ohio State, lost one of its two games.
00;03;59;28 - 00;04;01;18
Tom Godar
To who who’d they lose to Tyler?
00;04;01;26 - 00;04;04;08
Tyler Paetkau
I believe that was Michigan. The rivalry.
00;04;04;08 - 00;04;19;27
Tom Godar
I believe, and Michigan's whole season was salvaged by that victory. And frankly, there were calls for the termination of this sort of world beater coach from Ohio State. Really, because he was this was the fourth game in a row.
00;04;19;27 - 00;04;28;05
Tyler Paetkau
Tyler fourth came to Michigan. Yeah he's congratulations Ohio. But as we talked about before, it will be forever tainted.
00;04;29;29 - 00;04;37;04
Tom Godar
And I said it will be forever tainted in a group of alumni which doesn't cover coast to coast, but welcome, Tyler. It's great to have you.
00;04;37;06 - 00;04;38;07
Tyler Paetkau
Thanks. Thanks, Tom.
00;04;38;11 - 00;05;03;14
Tom Godar
A couple of things that we wanted to kick off. First as a personal story. I read today that President Trump has frozen all employment in the federal sector. Well, I'm old enough that I was going to join the federal sector as a lawyer in 1981 when another president on inauguration day that was January 20, 1981, froze all federal employment.
00;05;03;14 - 00;05;31;02
Tom Godar
That was President Reagan. And that altered my life course, perhaps forever. I never took that federal job. I jumped right into the private sector. And here I am now, 40 some years later, the host of the Labor Law Insider elections have consequences. So we're here right now. But why don't you tell us very briefly and this is not really a show on what's going to take place because of the election of President Trump.
00;05;31;11 - 00;05;41;20
Tom Godar
But just give us two or three minutes Tyler, on some of the things that we're going to see and then we're going to tie some of that in to student athletes as employees on campus.
00;05;41;29 - 00;06;08;11
Tyler Paetkau
Sure. So I'll start with the Dartmouth case that everybody's read about. I've been following for a while now. You know, Dartmouth challenged a decision by an ALJ that these student athletes, the men's basketball team, could organize and form a union. They're essentially employees. And just recently, December 31st, 2020, for the SEIU, which represents the men's basketball team, withdrew their petition for recognition.
00;06;08;21 - 00;06;37;16
Tyler Paetkau
So practically what that means is we won't get a ruling by the fall National Labor Relations Board as to the status of these student athletes and whether they are in fact employees and entitled to unionize. We still have some older law, including a Northwestern case, that addresses that. And around the same time there was a petition filed against USC, the PAC 12 and the NCAA, as joint employers, and that petition has also been withdrawn.
00;06;37;27 - 00;06;58;09
Tyler Paetkau
So in some ways, we have a blank slate now to write on. And in terms of what to expect in the future, I think we're all rolling out our crystal balls here. And I think a couple of things that we're going to see more changes in leadership at the various agencies, including the NLRB. We heard about some yesterday and I just read more to come.
00;06;58;18 - 00;07;20;11
Tyler Paetkau
You're fired. So I think that some people in the NLRB, one of my favorite agencies, might be on the short list there. So what does that mean for employers? You know, I feel like the last four years have been in hibernation representing employers every ruling that came out, every advice, memo, everything published by the NLRB was in favor of unions just across the board.
00;07;20;11 - 00;07;48;02
Tyler Paetkau
And now we're seeing a little more life, a little more renewal of optimism among employer community. So joint employer is a big issue. Captive audience speeches Section seven Rights and how far they expand. Recently, the NLRB, Jennifer Abruzzo has been focused on restrictive covenants. I think that's on the agenda of the new Trump administration. Stay or pay provisions, bonuses and having employers requiring employees to pay those back.
00;07;48;13 - 00;07;53;03
Tyler Paetkau
So there's a whole host of issues that I think we'll see changes. You know, in the next year or two.
00;07;53;22 - 00;08;12;21
Tom Godar
That's a great initial summary. Give me a ring. Why would the SEIU withdraw from the role of representing the student athletes at Dartmouth, or why would the case get withdrawn or dismissed? What's the strategic reason that those who seem to be in the driver's seat would withdraw those cases?
00;08;12;28 - 00;08;33;14
Tyler Paetkau
Yeah, it's a good question. I mean, my conclusion or opinion is that they were worried about what the Trump administration was going to bring to the board in terms of new appointments, just overall philosophy on these cases. They could see the writing on the wall and wanted to not create a bad precedent, you know, from the board, from the Trump board.
00;08;33;26 - 00;08;48;13
Tyler Paetkau
So that's my read on it. You know, I'm interested in what you think, but it was odd timing. I mean, literally Christmas Eve is when this was withdrawn. We're not interested in unionizing any longer. We're withdrawing our petition, end of story and of case.
00;08;48;23 - 00;09;16;01
Tom Godar
And they threw out some stuff about, well, there's not going to be any money and we don't need a union anymore because there's going to be some regulations and some of that. But yeah, I guess I'd be watching that same strategic line is that, you know, you don't want to create bad law. If you think that by being patient for some years, you might get a more sympathetic tribunal and you think that that sympathetic tribunal might be affected by maybe an election in four years from now.
00;09;16;10 - 00;09;41;07
Tom Godar
Interesting stuff, though, for sure, that these things that we were watching so carefully just get withdrawn to try to miss a news cycle. Maybe you take it out on December 24 so people aren't talking too much about it. It's interesting stuff. So what's going on in your world, Jason? To start discussion, we're seeing student athletes and how their role as employees is now maturing.
00;09;41;08 - 00;09;52;00
Tom Godar
Since we've got well, we've got payment to these student athletes in the form of payment for a name, image and likeness. We see more and more of them on commercials and boosting brands and so forth.
00;09;52;17 - 00;10;20;13
Jason Montgomery
Yeah, it's it's really been a seismic shift since 2021 when the NCAA deregulated the rules to allow for third party payments under the heading of no good deed goes unpunished. When they deregulated, they then were sued again on the antitrust claims in separate lawsuits that were consolidated, really requesting back damages for the years that the athletes prior to the deregulation were not allowed to receive compensation from third parties.
00;10;21;01 - 00;10;48;10
Jason Montgomery
And in addition to that, the plaintiffs attorneys threw in the television contracts and the fact that the athletes weren't allowed to share in the the proceeds from the revenue generated from television, in particular in football, men's basketball. So what happened last year, among many other things, in college sports, was a proposed settlement of three consolidated anti-trust cases. House Hubbard and Carter are the three cases, and the settlement would permit.
00;10;48;10 - 00;11;16;23
Jason Montgomery
Then prospectively for colleges and universities to pay athletes directly. Either they can pay them a direct revenue share benefit or they can purchase their nil directly from the athlete. And most schools are choosing to purchase, or at least contemplating purchasing the nil from athletes. The settlement itself is set to be approved in April with there's numerous objections that have occurred.
00;11;16;23 - 00;11;36;12
Jason Montgomery
I think that the standard thought is that it will ultimately be approved, but that remains to be seen. But regardless, what likely will happen is a shift into direct payments of athletes from the colleges, universities. And right now there's currently a cap set at $20.5 million.
00;11;37;13 - 00;11;39;09
Tom Godar
To set such a cap. Where's that come from?
00;11;39;12 - 00;12;12;09
Jason Montgomery
So the way this was structured is that the NCAA and the five Autonomy conferences was the now. Now there's just four. The PAC 12 went away, but they're still part of this lawsuit, so they're still decided to grab the bull by the horns. And they don't have a union to collectively bargain with. So we're going to create a structure within which we are able to manage this operation through an injunctive settlement agreement with the plaintiffs attorneys for this class of student athletes.
00;12;12;26 - 00;12;34;15
Jason Montgomery
And by doing so, they are attempting to have some sort of stability in this marketplace for at least a period of ten years. So the cap is set through that arrangement. The cap will go up period weekly, and it's basically the average revenue generated by the Autonomy conferences plus Notre Dame.
00;12;34;26 - 00;12;57;17
Tom Godar
You know, sometime we might put this podcast where we can actually watch each other live. I mean, I can see you you can see me smiling, thinking, where did 20.5 million come from? Which universities can affect that? I'm just smiling to think of which deeply pocketed alumni are sending those checks out. And I hear about a such a check going to, by the way, Michigan from one of our friends.
00;12;57;17 - 00;13;04;20
Tom Godar
And like you, California actually kind of in your neighborhood, Tyler, to make sure that they had enough and I owe money to go around.
00;13;04;22 - 00;13;29;29
Tyler Paetkau
I did see that. Yeah, it's a new world. And I mean, just my personal opinion. I'm not a fan of making a little semi-pro league now. That's essentially what we have, but that's the world we're living in. And I think there's a lot, as Jason just pointed out, unanswered issues and questions. And my own view is that we need I don't normally advocate for legislative action.
00;13;30;06 - 00;13;58;21
Tyler Paetkau
Usually it makes things worst for everyone. But here I think we need comprehensive federal legislation to address animal unionization, whether student athletes are employees. And without that, we're going to have two decades, if not more, of contentious litigation, expensive, time consuming. I'm a fan of college sports in general and college football, of course, and I think it would be bad for the athletes to have this just morph into just never ending litigation.
00;13;59;01 - 00;14;26;03
Tom Godar
Yeah, it's fascinating. There are those who accused people like you, Tyler and me or engaged in litigation of always being in favor of whatever sort of dispute of world there is out there, because we might get our piece of it, but it is confusing and I go back to this balance is there some sort of a solution that comes because of Neil money and agreements in a lawsuit that settle it that makes unions irrelevant?
00;14;26;03 - 00;14;45;22
Tom Godar
Or does this, Tyler, suggest even more so that these student athletes are indeed employees of a certain amount of money for a certain amount of performance and gives even greater opportunity for those who want to make the argument that they should be subject to the National Labor Relations Act as employees and the universities, as employers.
00;14;45;22 - 00;15;05;09
Tyler Paetkau
Yeah, I think the jury's still out on that. I read the new terms of the proposed terms of the House settlement, and there are questions, you know, I don't know if the parties can just say they're not employees. See, it's in our agreement. Labels are not always determinative. And so I wonder about that. I mean, I went back and read the Northwestern case.
00;15;05;09 - 00;15;35;13
Tyler Paetkau
There's a January 2021 guidance memorandum filed by Ms. Abruzzo, you know, and it's very if you go back and read it, it's very detailed in terms of especially the amount of control exercised by these universities towards do you want athletes? Everything from practice schedules to training tables and study time, you know, film room. It's very detailed. And if it walks like a duck and talks like a duck, well, at least Ms. Abruzzo says it's a duck.
00;15;35;13 - 00;15;36;06
Tyler Paetkau
It's an employee.
00;15;36;17 - 00;16;00;20
Tom Godar
Well, I'm sure you're going to swear off having agreed with all of that analysis, but that's what the analysis suggested. Going back to you a little bit, Jason, tell us a little bit more about what this settlement might mean in the long run, but will it affect only D1 athletes? Will it affect athletes at all universities, or is this a relatively limited set, though, a large set, you know, of the power four conferences?
00;16;00;20 - 00;16;02;11
Tom Godar
Tell us a little bit more about the impact.
00;16;02;20 - 00;16;42;28
Jason Montgomery
So it can't apply to all division one athletes. Really, the class are our Division one athletes in the power for conferences, the autonomy for conferences in men's basketball and women's basketball athletes in all Division one. But the terms of the settlement allow for other institutions that were not in those conferences or named as parties to opt in to the settlement and be bound by the terms of the settlement, which ultimately how this nil structure as they're contemplating it and, you know, salary cap, so to speak, or quasi salary cap will be operated, is at the discretion of the the conferences that are making the settlement and the NCAA.
00;16;42;28 - 00;17;19;25
Jason Montgomery
But really, the conferences are driving the bus here. I think to Tyler's point, I've made this comment several times, the last great partizan issue or bipartisan issue excuse me is everyone can agree we hate the NCAA. Ohio State had tattoo gate. Michigan had harbaugh gate. They are both hated. The ncaa equally in that time period. And so what has happened is you also in addition to the settlement, you have a patchwork of legislation in different states that try to individually address nil opportunities for athletes in those states.
00;17;20;06 - 00;17;43;10
Jason Montgomery
That still hasn't been fully vetted in terms of this particular settlement or how those rules might affect the settlement. I think the the reality is those rules were put in place to be permissive and to allow for opportunities for athletes in the state and promote that individual college or institution within that state. So the thought is that they'll be amended to address this.
00;17;43;10 - 00;18;21;27
Jason Montgomery
But the bottom line is the autonomy for has kind of stuck a flag in the ground and said we are operate differently than other Division one schools. We are not Saint Joseph's, we are not a smaller we have large businesses and we need to try to manage those in a sustainable way. What they still don't want to do is call their athletes employees and they don't want them to have the full range of benefits either that would come with in LRE or with an FLSA situation, which is a separate issue that's being currently being litigated.
00;18;21;27 - 00;18;23;15
Jason Montgomery
And I think in the third Circuit.
00;18;24;09 - 00;19;01;03
Tom Godar
Jason, out of that comes this concern that there will be or has already begun to be a patchwork of responses to student athletes as potential employees. If the NLRB says, we don't have jurisdiction over these folks because they're not employees, under our definition, might states step in? And if the NLRB says we don't have jurisdiction over public sector employees, might again the state just step in with its own set of responses for these student athletes, who, at least according to some, look a lot like employees.
00;19;01;18 - 00;19;37;09
Jason Montgomery
Yeah, I think that's absolutely the case. And that's what we've seen happen with this, you know, name, image, likeness, legislation in different states tailored to that particular state school and what the NCAA and these other committees are trying to do is to manage this national issue through this settlement agreement. Right. So this is their last attempt to maintain some control in order over this by saying we've all agreed to this, we're all agreeing to this arbitration, we're going to change the rules and we're going to work collectively to address whatever legislative issues we have to on a state by state basis.
00;19;37;18 - 00;19;52;14
Jason Montgomery
And in fact, in part of the agreement suggests that the plaintiffs attorneys will assist in lobbying Congress for more comprehensive legislation that will address some long term antitrust issues that NCAA rules could create.
00;19;52;16 - 00;19;57;27
Tom Godar
All right. Here's your quiz. Tyler, when's the last time Congress passed any labor legislation?
00;19;59;01 - 00;20;07;05
Tyler Paetkau
Labor, traditional labor? I'm going to say like 1947, passed Taft-Hartley.
00;20;07;05 - 00;20;48;09
Tom Godar
Which we can argue together as to what was labor legislation. But the truth is, nothing comprehensive has been passed since before any of us were born. And whether it was the Pro Act which had been sort of bouncing along for five or six years or something else, so I guess I'm not going to hold my breath, but I certainly understand where comprehensive legislation would be helpful, especially since right now there are a number of voices suggesting whether it's the Dartmouth basketball team or name any other or name image and likeness and the opportunities for athletes to receive compensation from admittedly very large businesses, which happen to be housed within university athletic departments.
00;20;48;17 - 00;21;09;26
Tom Godar
But there's a lot of people who want to throw their own sort of piece into this. I think. Jason, you were mentioning just in the last couple of days as a last gasp effort from the Biden administration, the Department of Justice was saying, we're going to object to some of the proposed settlement. Tell me about tell us about some of those objections that are being raised right now.
00;21;10;01 - 00;21;35;11
Jason Montgomery
Yeah, there's been other groups that have objected. The two big pieces of this just so we're understanding the context of this, is it's a $2.8 billion settlement of damages, and that damages is going to be distributed primarily to men in football and men's basketball. So 75% of the money is going to football, 15% is going to men's basketball, five 4% to women's basketball, 5% to other.
00;21;35;11 - 00;22;08;00
Jason Montgomery
So that represents, to a large extent, how the revenue has gone from the television contracts. Now, in response to that, just on Thursday, as a matter of fact, OCR for the first time commented on the Department of Education, Office of Civil Rights, commented on the application of Title nine to Denial, and suggested that this type of additional benefits, compensation, whatever you want to call it, in direct denial, should be provided proportionately to men and women under Title nine.
00;22;08;16 - 00;22;32;17
Jason Montgomery
Questionable whether that is, you know, solely, you know, fully accurate. There certainly are arguments for or against that as part of the higher education process and whether Title nine applies in that way. But they issued this, you know, guidance opinion, which really is a document that doesn't have any necessary rulemaking or legal authority behind it, but is a position of an agency that could enforce the rule so that happened.
00;22;33;00 - 00;23;05;01
Jason Montgomery
And then the DOJ on Friday suggested that the judge should evaluate whether they she should permit an injunctive settlement agreement for ten years that would that would provide an artificial cap on nil payments to athletes, and that doing so would create additional antitrust concerns from from the DOJ's perspective. So those are among two of of probably the more significant developments in terms of objections in the back and forth that have occurred in this case.
00;23;05;01 - 00;23;18;02
Jason Montgomery
And it'll be interesting to see how the judge addresses that particular question and whether there is further comment or draw from the Trump administration in terms of their position on either of these topics.
00;23;18;12 - 00;23;42;10
Tom Godar
Jason, that helps us get a little bit of clarity as to how the evolving issues are affecting student athletes. But in terms of labor issues, this is more than student athletes that are being affected. Tyler, aren't the graduates, students and other students on campus also looking at the possibility of being identified as employees under the National Labor Relations Act?
00;23;42;26 - 00;23;58;28
Tyler Paetkau
Yeah, that's correct. Just recently, a group of graduate students at Vanderbilt University withdrew their petition as well. But that's still a live issue. There's ongoing efforts to organize teaching assistants and graduate student graduate students who are also teaching.
00;23;59;09 - 00;24;26;23
Tom Godar
Well, I think that the caution from us is keep your eyes open. We're going to see changes. It's obviously interesting for those of us who are watching to see that Donald Trump announced a firing of really important individuals in a public note on his ex. I guess this one was on actually I'm looking at so I don't recommend that you employers do that to announce your firings publicly on action.
00;24;26;23 - 00;24;43;20
Tom Godar
Then tell the employees down the line that that's what you've done. But the Trump administration will indeed continue to take some steps that will make our world interesting. Gentlemen, thank you so much for joining us on the Labor Law Insider. Any final thoughts? I'll let you go first, Tyler.
00;24;44;03 - 00;25;10;08
Tyler Paetkau
Yeah, I mean, I think stay tuned, especially in the next two weeks, not just with the NLRB, EEOC, DOJ, a lot of these agencies are already under fire. You know, we know about the Loper Bright decision overturning or calling into question a lot of administrative decisions that were not properly vetted, not subject to public comment. So I think we're in store for some massive changes, you know, just here in the next month.
00;25;10;08 - 00;25;11;06
Tyler Paetkau
So stay tuned.
00;25;11;14 - 00;25;16;27
Tom Godar
And what should we look for on university and college campuses in the next months and years, Jason?
00;25;16;27 - 00;25;50;25
Jason Montgomery
Well, I will say that it does appear to me that the Donald Trump is interested in college athletics and has been to many events. The Army-Navy game he went to, I think an Alabama football game. I think that he will be paying attention to what's going on in college athletics and if he can take a win, so to speak, for assisting in any way with resolution and maintaining some level of the traditional college athlete environment, that might be something that occurs.
00;25;50;25 - 00;25;55;00
Jason Montgomery
His intervention is is something that that could happen and it could happen publicly.
00;25;55;08 - 00;26;19;00
Tom Godar
Well, thoughts and things to watch for. Fellows, I appreciate it so much. Enjoy the rest of your inauguration one day after and we'll be back at you soon for more discussion on the labor law insider. Thank you for joining us. Our guests, our listeners, please, if you enjoy the Labor Law Insider, share it with your friends. Like it and we'll be talking to you soon.
00;26;19;12 - 00;26;23;26
Tom Godar
Thanks again for joining us on the Labor Law Insider.