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The Labor Law Insider - Dartmouth Basketball Team Unionizes: The NLRB Sets a Pick for Unions

 
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Legendary basketball player Magic Johnson said, “The only thing that matters is the score.”

Well, the score is 13 to 2, considering the votes for a union representing the Dartmouth College men’s basketball team. For college basketball hounds, it’s tournament time, but for the NCAA, it is a strange turn of events. Dartmouth, an Ivy League bench warmer in men’s basketball, has not played an NCAA Tournament game since 1959; however, it is now a leader in organized labor, choosing to become represented by the Service Employees International Union, since the National Labor Relations Board (NLRB) found that the institution exercises control and provides compensation—in the form of shoes—but not athletic scholarships. In its decision, the NLRB cited the players’ estimate that team members receive equipment valued at over $44,000 per year.

Husch Blackwell partners Tyler Paetkau and Jason Montgomery join Labor Law Insider host Tom Godar to explore this development, as organized labor continues to apply a full-court press to institutions of higher education.

Listen to part two >

Read the Transcript

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

0:08:01.320,0:08:07.040
sense of where does fairness come out it seems 
odd to me I'll be honest with you that it's the

0:08:07.040,0:08:14.280
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

0:08:48.760,0:08:55.960
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

0:10:02.800,0:10:09.680
be subject to potentially this organizing and 
it really takes us to you know that step of why

0:10:09.680,0:10:15.160
is it that the board and they used IR rationale 
and while I agree or disagree with it um their

0:10:15.160,0:10:20.760
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

0:10:43.600,0:10:48.160
at least that one piece of it that is the control 
aspect that an employer might have over employees

0:10:48.160,0:10:53.240
or in this case a program over its athletes yeah 
it's really interesting because you know kind of

0:10:53.240,0:10:58.800
the nature of Athletics requires some scheduling 
the nature of extracurricular activities requires

0:10:58.800,0:11:04.880
some level of of scheduling and the nlrb said that 
was you know equivalent to control because you

0:11:04.880,0:11:10.520
controlled the movements and the time frame within 
which were athletes were going to participate you

0:11:10.520,0:11:14.960
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

0:11:26.320,0:11:32.960
has what your requirements are to be an ath that 
the NDA has set for those being academic and and

0:11:32.960,0:11:39.960
so forth liking that to an employee handbook and 
saying many of the things in here uh we would see

0:11:39.960,0:11:46.040
an employee handbook where you know there are you 
know certain requirements of employees and times

0:11:46.040,0:11:53.360
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

0:11:58.600,0:12:04.560
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

0:12:10.880,0:12:17.320
that we would practice you know seven days a week 
at at one point the ni had no rules related to uh

0:12:17.320,0:12:22.920
you know 20 hours is what the the NCA has and so 
it's really interesting looking at and kind of

0:12:22.920,0:12:31.000
comparing individual experiences because you could 
see that if if this logic is app in the way it's

0:12:31.000,0:12:36.520
written without this idea of economic fairness 
because men's basketball makes a lot of money

0:12:36.520,0:12:42.960
then it does apply to niia schools it applies 
to division 3 schools and and I'm not certain

0:12:42.960,0:12:48.600
that institutions are are ready for that yeah the 
the athletes have to sign all sorts of documents

0:12:48.600,0:12:52.720
and promise that they're going to practice or not 
practice that they can practice with coaches and

0:12:52.720,0:12:56.920
without coaches where their training table is 
what they're going to eat or not eat when when

0:12:56.920,0:13:03.080
they're going to be available to come to um all 
of the events as you said scheduling is is primary

0:13:03.080,0:13:07.200
and don't take these classes because if you take 
those classes you're not going to be able to make

0:13:07.200,0:13:12.720
the practice or or to the film room and all that 
sort of thing so when I've talked to parents and

0:13:12.720,0:13:16.960
that's I've not had these these kinds of kids but 
when I've talked to parents with D1 athletes my

0:13:16.960,0:13:23.440
gosh they tell me how crushing um some of these 
things are it really is full-time plus isn't it

0:13:23.440,0:13:27.880
yeah you can see that Tom in the decision you 
know there's a a couple of lines I just read

0:13:27.880,0:13:33.160
that illustrate that the control that the board 
is relying on in these cases quote when players

0:13:33.160,0:13:38.720
travel to away away games the coaching staff 
requires players to travel eat and sleep as a

0:13:38.720,0:13:45.560
group The Players also attend meetings review film 
interact with alumni conduct media interviews and

0:13:45.560,0:13:52.240
sign autographs as directed the coaching staff 
shapes the itinerary for departure time travel

0:13:52.240,0:13:59.120
time Hotel checkin meals and lights out and then 
they provide an example of a practice I think in

0:13:59.120,0:14:03.760
exhibition game against Princeton actually it 
was a real game against Princeton in January

0:14:03.760,0:14:09.920
2023 where it's down to the minute what these 
student athletes are supposed to do including

0:14:09.920,0:14:16.720
spending time with alumni signing autographs and 
presumably getting those donations so you know I I

0:14:16.720,0:14:23.400
think this started really with the nil decision 
by the Supreme Court uh subjecting the NCA to

0:14:23.400,0:14:30.400
potential antitrust liability and freeing up the 
money for the athletes to J Jason's point about

0:14:30.400,0:14:37.760
the fairness not so much you know I'm surprised 
they picked Dartmouth minc basketball but at some

0:14:37.760,0:14:44.720
schools football and basketball generate enormous 
amounts of money for the University and you can

0:14:44.720,0:14:51.160
see an argument there where they're really you 
know leading to the professional athlete um it's

0:14:51.160,0:14:57.560
more regimented and they're actually producing 
substantial revenue for the school yeah I read

0:14:57.560,0:15:04.560
before and preparing for this that the income 
for Ohio State University again not in this

0:15:04.560,0:15:10.440
discussion exactly because they are public sector 
University number one so I am also going to the

0:15:10.440,0:15:17.520
outlier on the high end a quarter of a billion 
dollars $251 million and I don't know if that

0:15:17.520,0:15:22.800
states every nickel or if that just States the 
direct lines that you can read from the athletic

0:15:22.800,0:15:27.680
department as opposed to some of the other 
sort of alumni engagement so it it is a it's

0:15:27.680,0:15:33.600
a it's a startling number and there's a startling 
control but let's talk about much smaller numbers

0:15:33.600,0:15:40.560
that at least in this Dartmouth case talk about 
compensation because under the traditional test

0:15:40.560,0:15:48.560
for employment you had control and compensation 
so what's the compensation piece which I found

0:15:48.560,0:15:55.920
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

0:16:01.840,0:16:06.720
sufficient for Dartmouth either of you can jump 
in yeah so you know I thought it was interesting

0:16:06.720,0:16:10.880
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

Professionals:

Thomas P. Godar

Of Counsel