[House Report 118-573]
[From the U.S. Government Publishing Office]
118th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 118-573
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PROTECTING STUDENT ATHLETES' ECONOMIC FREEDOM ACT OF 2024
_______
July 5, 2024.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Foxx, from the Committee on Education and the Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 8534]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 8534) to prohibit a student athlete
from being considered an employee of an institution, a
conference, or an association based on participation in certain
intercollegiate athletics, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Student Athletes' Economic
Freedom Act of 2024''.
SEC. 2. EMPLOYMENT STANDINGS.
Notwithstanding any other provision of Federal or State law, a
student athlete (or former student athlete) may not be considered an
employee of an institution, a conference, or an association under any
Federal or State law or regulation based on participation of the
student athlete (or former student athlete) in a varsity
intercollegiate athletics program or a varsity intercollegiate
athletics competition, or the existence of rules or requirements for
being a member of any varsity sports team.
SEC. 3. DEFINITIONS.
In this Act:
(1) Association.--The term ``association'' means an
organization that--
(A) has multiple conferences and institutions as
members;
(B) arranges championships for varsity
intercollegiate athletics programs;
(C) sets rules for varsity intercollegiate athletics
programs;
(D) sets rules for varsity intercollegiate athletics
competitions; and
(E) is not a conference.
(2) Conference.--The term ``conference'' means an
organization that--
(A) has multiple institutions as members;
(B) sets rules for varsity intercollegiate athletics
competitions;
(C) arranges championships for varsity
intercollegiate athletics programs; and
(D) is not an association.
(3) Institution.--The term ``institution'' means an
institution of higher education (as defined in section 101 of
the Higher Education Act of 1965 (20 U.S.C. 1001)) that
sponsors a varsity intercollegiate athletics program in the
United States.
(4) Student athlete.--The term ``student athlete'' means an
individual who participates in a varsity intercollegiate
athletics program.
(5) Varsity intercollegiate athletics competition.--The term
``varsity intercollegiate athletics competition'' means a
competition involving 2 or more varsity intercollegiate
athletics programs sponsored by different institutions.
(6) Varsity intercollegiate athletics program.--The term
``varsity intercollegiate athletics program'' means a team or
other program unit of an institution participating in a sport--
(A) played at the intercollegiate level;
(B) administered by an athletic department; and
(C) for which eligibility requirements for
participation by student athletes are established by an
association.
(7) Varsity sports team.--The term ``varsity sports team''--
(A) means a team of student athletes organized by a
varsity intercollegiate athletics program to
participate in a varsity intercollegiate athletics
competition; and
(B) does not include a team that is traditionally
characterized as an intramural or club team.
PURPOSE
H.R. 8534, the Protecting Student Athletes' Economic
Freedom Act, prevents the National Labor Relations Board (NLRB
or Board) from misclassifying student-athletes as employees.
The bill also clarifies that student-athletes are not
considered employees of a collegiate institution, conference,
or association under federal or state law or regulation based
on participation in varsity intercollegiate athletic programs
or competitions.
COMMITTEE ACTION
113TH CONGRESS
Full Committee Hearing on Unionizing Student-Athletes
On May 8, 2014, the Committee on Education and the
Workforce held a hearing titled ``Big Labor on College
Campuses: Examining the Consequences of Unionizing Athletes.''
Witnesses were Patrick Eilers, Managing Director, Madison
Dearborn Partners, Chicago, IL; Bradford Livingston, Partner,
Seyfarth Shaw LLP, Chicago, IL; Bernard Muir, Director of
Athletics, Stanford University, Stanford, CA; Andy Schwarz,
Partner, OSKR LLC, Emeryville, CA; and Ken Starr, President and
Chancellor, Baylor University, Waco, TX. Witnesses discussed
the NLRB's efforts to classify student-athletes as employees
under the National Labor Relations Act (NLRA).
114TH CONGRESS
Full Committee Hearing on Expanding Opportunity in Schools and
Workplaces
On February 2, 2015, the Committee on Education and the
Workforce held a hearing titled ``Expanding Opportunity in
America's Schools and Workplaces.'' Witnesses were Mike Pence,
Governor of Indiana, Indianapolis, IN; Michael Amiridis,
Provost, University of South Carolina, Columbia, SC; Drew
Greenblatt, President and CEO, Marlin Steel, Baltimore, MD; and
Lawrence Mishel, President, Economic Policy Institute,
Washington, D.C. Witnesses discussed, among other things,
attempts by the NLRB to misclassify student-athletes as
employees under the NLRA.
118TH CONGRESS
Joint Subcommittee Hearing on Student-Athletes
On March 12, 2024, the Subcommittee on Health, Employment,
Labor, and Pensions and the Subcommittee on Higher Education
and Workforce Development held a joint hearing titled
``Safeguarding Student-Athletes from NLRB Misclassification.''
Witnesses were Jill Bodensteiner, Vice President and Director
of Athletics, Saint Joseph's University, Philadelphia, PA;
Tylere Sims, Shareholder, Littler Mendelson, Tampa, FL; Matthew
Mitten, Professor of Law and Executive Director, National
Sports Law Institute, Marquette University Law School,
Milwaukee, WI; and Mark Gaston Pearce, Executive Director,
Workers' Rights Institute at Georgetown Law, Washington, D.C.
Witnesses discussed the negative implications of the
misclassification of student athletes as university employees
subject to unionization.
Legislative Action
On May 23, 2024, Representative Bob Good (R-VA) introduced
H.R. 8534, the Protecting Student Athletes' Economic Freedom
Act, with Committee Chairwoman Virginia Foxx (R-NC) and
Representatives Burgess Owens (R-UT), Eric Burlison (R-MO),
Andrew Ogles (R-TN), Tim Walberg (R-MI), Rick Allen (R-GA),
Mike Kelly (R-PA), Doug LaMalfa (R-CA), Mary E. Miller (R-IL),
and Robert B. Aderhold (R-AL) as original cosponsors. The bill
was referred solely to the Committee on Education and the
Workforce.
On June 13, 2024, the Committee considered H.R. 8534 in
legislative session and reported it favorably, as amended, to
the House of Representatives by a recorded vote of 23-16.
Representative Good offered an amendment in the nature of a
substitute making a technical change. The amendment was adopted
by voice vote.
COMMITTEE VIEWS
Introduction
President Biden promised to be the most pro-union President
in U.S. history, and his actions have met that promise. The
Biden administration has taken an all-of-government approach
that is steadily chipping away at workers' rights and
empowering unions to entrench themselves in workplaces in every
sector, regardless of worker preference.
At the epicenter of this coordinated approach by government
agencies to impose unionization on workers is the NLRB. Under
Chairman Lauren McFerran, the NLRB has issued decisions and
rules that overturned commonsense policies and tilted the
playing field in favor of labor unions at the expense of worker
free choice and commonsense workplace standards. Part of this
radical pro-union agenda is the NLRB's efforts to expand the
agency's jurisdiction over individuals who have never before
been considered employees under the National Labor Relations
Act (NLRA), including student-athletes.
Background on NLRB Actions Concerning Student-Athletes
In the face of declining union membership, labor unions
have sought to organize individuals traditionally not
considered employees under the NLRA. A recent target of this
effort has been student-athletes.
In March 2014, in the Northwestern University case, the
NLRB Regional Director for Region 13 found that ``grant-in-aid
scholarship players for [Northwestern University's] football
team who have not exhausted their play eligibility are
`employees' under the NLRA.''\1\ The bargaining unit excluded
``walk-on'' players who do not receive an athletic scholarship.
The Regional Director ordered a representational election in
April 2014 to determine whether a majority of the scholarship
athletes supported the College Athletes Players Association
(CAPA) union.
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\1\Northwestern Univ., 13-RC-121359 (NLRB Mar. 6, 2014) (decision &
direction of election).
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Northwestern appealed the Regional Director's decision to
the full Board. In August 2015, the Board unanimously declined
to assert jurisdiction and dismissed the representation
petition filed by CAPA concerning Northwestern University
football players who receive grant-in-aid scholarships. The
Board found that ``it would not effectuate the policies of the
Act to assert jurisdiction in this case.''\2\ In large part,
the Board reasoned that asserting jurisdiction ``would not
serve to promote stability in labor relations'' because a
majority of schools that compete in college football and the
Big Ten Conference are public institutions not subject to the
NLRA.\3\ The Board declined to rule on whether or not student-
athletes are statutory employees.
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\2\Northwestern Univ., 362 NLRB No. 167, at 1 (2015).
\3\Id.
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Early in the Biden administration, NLRB General Counsel
(GC) Jennifer Abruzzo signaled she would bring the issue of
whether student-athletes are employees to the Board. In
September 2021, GC Abruzzo issued a memorandum providing
updated guidance to all NLRB field offices regarding her
position that certain student-athletes are employees under the
NLRA.\4\ The memo states that ``the law fully supports a
finding that scholarship football players at Division I
Football Bowl Subdivision (FBS) private colleges and
universities, and other similarly situated Players at Academic
Institutions, are employees under the NLRA.''\5\
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\4\https://www.nlrb.gov/news-outreach/news-story/nlrb-general-
counsel-jennifer-abruzzo-issues-memo-on-employee-status-of.
\5\Id.
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The memo relies on a common law definition of employee,
which includes a person ``who perform[s] services for another
and [is] subject to the other's control or right of control.''
The memo also argues that payment is ``strongly indicative of
employee status.'' The memo further claims that student-
athletes perform services for their respective academic
institutions and the National Collegiate Athletic Association
(NCAA) in return for compensation and are subject to their
control. In support of this position, the memo cites the
``significant developments in the law, NCAA regulations, and
the societal landscape.'' Specifically, the memo notes the
NCAA's suspension of name, image, and likeness (NIL) rules for
student-athletes and the collective action that is occurring at
``unprecedented levels'' by student-athletes.\6\
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\6\Id.
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Since this memo was issued, two cases involving the status
of student-athletes have reached NLRB regional offices. In May
2023, GC Abruzzo filed a complaint against the University of
Southern California (USC), the Pac-12 Conference, and the NCAA,
seeking that these entities ``cease and desist from
misclassifying'' players as student-athletes and instead label
them as employees.\7\ The complaint says misclassifying
student-athletes as non-employees intentionally discourages
student-athletes from exercising their rights to engage in
protected concerted activity under the NLRA. The complaint also
alleges that the three entities maintained illegal ``handbook
rules,'' and it highlights USC's social media and interview
policies that require student-athletes to ``be positive'' and
not ``do anything to embarrass yourself, the team, your family,
or the University.''\8\
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\7\https://www.law360.com/articles/1679404/attachments/0.
\8\Id.
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As a remedy, GC Abruzzo is seeking an order from the NLRB
directing USC, the Pac-12, and the NCAA to reclassify the
``student athletes'' as ``employees'' in their files,
handbooks, and rules.\9\ In December 2023 and January 2024,
NLRB Region 31 held hearings on the GC's unfair labor practice
charges against USC, the Pac-12, and the NCAA.\10\ Region 31
has not yet issued a decision.
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\9\University of S. Cal., 31-CA-290326, at 5-6 (NLRB May 18, 2023)
(complaint & notice of hearing) https://www.nlrb.gov/case/31-CA-290326.
\10\ https://apnews.com/article/usc-ncaa-nlrb-
b261dd0164b4bd17e00e4c7da5ca3f98.
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On February 5, 2024, in the Dartmouth College case
involving Dartmouth men's basketball players petitioning for a
union, the NLRB Region 1 Director found that because
``Dartmouth has the right to control the work performed by the
Dartmouth men's basketball team, and the players perform that
work in exchange for compensation, I find that the petitioned-
for basketball players are employees within the meaning of the
[NLRA].''\11\ The bargaining unit consists of all basketball
players on the men's varsity basketball team. The Regional
Director issued a direction of election on union representation
to allow the 15 members of the team to vote on whether a
majority support the Service Employees International Union
(SEIU), Local 560.
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\11\Trustees of Dartmouth Coll., 01-RC-325633, at 2 (NLRB Feb. 5,
2024) (decision & direction of election), https://www.nlrb.gov/case/01-
RC-325633.
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The Regional Director determined that the NLRA defines
``employee'' broadly to include ``any employee'' subject to
only a few enumerated exceptions that do include players at
academic institutions or students. She also found that the
basketball players at issue perform work that benefits
Dartmouth; that Dartmouth exercises significant control over
the players' work; that the players are required to provide
their basketball services to Dartmouth only; and that the
student-athlete handbook in many ways functions as an employee
handbook, detailing the tasks athletes must complete and the
regulations they may not break.
Finally, the Regional Director found that the Dartmouth
men's basketball team performs work in exchange for
compensation. She noted the basketball players receive the
benefits of ``early read'' for admission prior to graduating
high school. The players also receive equipment and apparel--
including basketball shoes valued in excess of $1,000 per
player per year--as well as tickets to games, lodging, meals,
and the benefits of Dartmouth's ``Peak Performance'' program.
On March 5, 2024, the Dartmouth men's basketball players
voted to form the first labor union in college sports. The 15-
player roster voted 13-2 in favor of joining SEIU Local 560.
Hours after the vote, Dartmouth administrators filed a formal
appeal to the full NLRB to challenge the vote.\12\
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\12\Trustees of Dartmouth Coll., 01-RC-325633 (NLRB Mar. 5, 2024)
(request for review of decision & direction of election), https://
www.nlrb.gov/case/01-RC-325633.
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Federal Courts and State Legislatures Have Not Considered Student-
Athletes To Be Employees
Federal courts have consistently recognized the difference
between professional and college athletes. Professional
athletes are full-time employees paid cash compensation by for-
profit leagues. Student-athletes are full-time students at
nonprofit institutions of higher education with limits on how
much time can be dedicated to athletic pursuits and with
educational standards that must be met to remain eligible to
compete in athletics.
On March 12, 2024, Matthew Mitten, Professor and Executive
Director of the National Sports Law Institute at Marquette
University Law School, testified before joint subcommittees of
the Committee about how federal courts and state legislatures
have consistently held that student-athletes are not employees:
Federal and state appellate courts have rejected
assertions that college athletes are university
employees under the federal Fair Labor Standards Act,
Berger v. NCAA, 843 F.3d 285, 293 (7th Cir. 2016), or
state worker's compensation laws. See, e.g., Rensing v.
Indiana State Univ. Bd. of Trustees, 444 N.E.2d 1170
(Ind. 1983); Waldrep v. Texas Employers Insurance
Ass'n, 21 S.W.3d 692 (Tex. Ct. App. 2000).
For purposes of worker's compensation insurance
coverage, no state legislatures have characterized
college athletes as university employees. Some states
expressly exclude intercollegiate athletes from
coverage under their worker's compensation laws. See,
e.g., Cal. Labor Code Sec. 3352(a)(7) (``employee''
excludes ``[a] person, other than a regular employee,
participating in sports or athletics who does not
receive compensation for the participation other than
the use of athletic equipment, uniforms,
transportation, travel, meals, lodgings, or other
expenses incidental thereto'').; N.Y. Workers' Comp.
Law Sec. 2(4) (McKinney 2022) (```employee' shall not
include persons who are members of a supervised amateur
athletic activity operated on a non-profit basis'').
Notably, without characterizing intercollegiate
athletes as ``employees,'' Nebraska has legislatively
mandated that the University of Nebraska ``establish an
insurance program which provides coverage to student
athletes for personal injuries or accidental death
while participating in university-organized play or
practice in an intercollegiate athletic event.'' Neb.
Rev. St. Sec. 85-106.05 (West's 2024).\13\
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\13\Safeguarding Student-Athletes from NLRB Misclassification:
Hearing Before the Subcomm. on Health, Emp't, Lab. & Pensions and the
Subcomm. on Higher Educ. & Workforce Development of the H. Comm. on
Educ. & the Workforce, 118th Cong. (2024) (statement of Matthew Mitten,
Exec. Dir. of the Nat'l Sports Law Inst., Marquette Univ. Law Sch., at
5), https://edworkforce.house.gov/uploadedfiles/mitten_testimony.pdf.
Tyler Sims, a shareholder at Littler Mendelson, testified
at the same hearing that states have enacted various laws
limiting public employees' right to bargain collectively and
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classifying student-athletes to not be employees:
Ohio and Michigan have laws stating that student-
athletes at public universities are not employees. See
Ohio Rev. Code Sec. 3345.56; Mich. Comp. Laws Sec.
423.201(1)(e)(iii). Wisconsin and several other states
have laws limiting public sector union collective
bargaining. See Wis. Stat. Sec. 111.91(3)(a) (wages
only). And other states like North Carolina, Texas, and
Georgia prohibit public sector collective bargaining
all together. See N.C. Gen. Stat. Ann. Sec. 95-98; Tex.
Gov't Code Sec. 617.002(a); Ga. Code Ann. 20-2-
09989.10.\14\
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\14\Id. (statement of Tyler Sims, Shareholder, Littler Mendelson,
at 8), https://edworkforce.house.gov/uploadedfiles/sims_testimony.pdf.
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College Athletes Are Not Employees Under the NLRA
As stated in the Northwestern decision, Congress did not
explicitly address ``whether the Board should exercise
jurisdiction'' over student-athletes.\15\ Without any clear
direction from Congress, it is important to note that the
NLRA's overall statutory scheme's purpose and focus is to
address economic relationships between employers and employees
in an industrial setting, not an academic one.
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\15\Northwestern Univ., 362 NLRB No. 167, at 1 (2015).
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In 2014, Bradford Livingston, partner at Seyfarth Shaw,
testified before the Committee about why student-athletes are
not employees under the NLRA:
Students who participate in intercollegiate athletics
are not ``employees,'' regardless of whether the
program generates revenue for the university. The term
``employee'' in Section 2(3) of the NLRA is not defined
in any meaningful way, and as a result, its parameters
must be examined based on the Act's purpose and focus,
which is to address economic relationships between
employer and employees. But ``principles developed for
the industrial setting cannot be imposed blindly on the
academic world.'' Yet claiming that college student-
athletes are employees begets ``the problem of
attempting to force the student-university relationship
into the traditional employer-employee framework.'' An
analysis of the relationship between the academic
institution and its student-athletes can only lead to
the conclusion that the NLRA's fundamental purpose does
not cover such a relationship, nor should it.\16\
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\16\Big Labor on College Campuses: Examining the Consequences of
Unionizing Student Athletes: Hearing Before the H. Comm. on Educ. & the
Workforce, 113th Cong. 25-26 (2014) (statement of Bradford Livingston,
Partner, Seyfarth Shaw, LLP).
Another reason why treating student-athletes as employees
under the NLRA is unworkable is that it would undermine a key
goal of the NLRA to limit industrial strife and create labor
stability. Mr. Sims testified on March 12, 2024, about how
treating student-athletes as employees would undermine the goal
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of the NLRA to improve labor stability:
Union representation and bargaining will be
complicated for student-athletes because of the rapid
turnover of college sports teams. At most, a student-
athlete will graduate and leave the school every 4-5
years. However, there are new rules related to the
transfer portal, which make it more likely that
student-athletes will transfer to a new school before
their four years of athletic eligibility are over. In
short, students who transfer schools are no longer
required to sit out for a year, which was the case when
I played at P[rovidence]C[ollege], and students who
transfer multiple times can play immediately as well.
There are also student-athletes who will choose to
leave the team or leave school to turn pro or for other
reasons. The Board has recognized the serious
administrative issues involved in conducting elections
and effectively remedying alleged violations of the
NLRA within industries with this type of employee
turnover. It is possible that at the end of the CBA
[collective bargaining agreement], there will be an
entirely new bargaining unit that never voted on
unionization. As such, the instability of the potential
bargaining unit comprised of student-athletes does not
promote stability in labor relations and is
inconsistent with the purpose of the Act.\17\
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\17\Statement of Tyler Sims, supra note 16, at 4-5, https://
edworkforce.house.gov/uploadedfiles/sims_testimony.pdf.
Recent NLRB decisions make treating student-athletes as
employees under the NLRA unworkable. Nearly all institutions of
higher learning impose a number of commonsense rules on student
behavior that student-athletes must follow, including basic
standards of decorum that students and collegiate athletes must
follow. However, under the current Board doctrine, employers
are limited in their ability to maintain rules requiring
civility in the workplace.\18\
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\18\See Stericycle, Inc., 372 NLRB No. 113 (2023) (broadening the
standard for evaluating employer worker rules that are challenged as
facially unlawful).
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Negative Impact of Employee Status on College Athletics
Classifying student-athletes as employees with the ability
to unionize will cause immense legal uncertainty and will harm
athletes participating in intercollegiate sports as well as
academic institutions sponsoring intercollegiate athletics. In
recent years, the NCAA has undergone transformational change
and has improved conditions for student-athletes. Treating
student-athletes as employees would undermine recent NCAA rule
changes that have been beneficial to intercollegiate athletes.
Mr. Sims testified about some of the potential consequences
of classifying student-athletes as employees:
In a typical workplace (or in professional sports),
employees must perform well, or they risk losing their
job. If student-athletes were to unionize and be
subject to the typical terms of a collective bargaining
agreement (``CBA''), would schools insist on a clause
allowing them to terminate or ``cut'' a student-athlete
for poor performance, which is what happens in
professional sports?
The federal tax code exempts certain scholarships
from gross income, including those given to student-
athletes. However, if scholarships are provided as
compensation in exchange for their athletic services,
those scholarships are not tax-exempt. The tax code
specifically states that the exemptions for a
``qualified scholarship'' do not apply to any ``portion
of any amount received which represents payment for
teaching, research, or other services by the student
required as a condition for receiving the qualified
scholarship.'' Athletic scholarships can cover the
traditional tuition, room, board, books, meals, and
fees, but also may include the incidental costs of
attending college like transportation and miscellaneous
personal expenses. If all of this is classified as
``compensation'' to employees, that compensation would
be in exchange for a service, i.e. playing college
sports, and would be taxable.\19\
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\19\Statement of Tyler Sims, supra note 16, at 9, https://
edworkforce.house.gov/uploadedfiles/sims_testimony.pdf.
Jill Bodensteiner, Vice President and Director of Athletics
at Saint Joseph's University, testified before joint
subcommittees of the Committee on March 12, 2024, about how
universities would not be able to afford the increased costs of
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treating student-athletes as employees:
Current NCAA rules require institutions to sponsor a
minimum number of sports to compete in Division I.
Several institutions (including Saint Joseph's) exceed
the minimum required sports, so they can maximize the
benefits of intercollegiate athletics for the student-
athletes who participate. Those additional sports most
often do not generate revenue for institutions. If
colleges and universities are required to deploy the
resources necessary to support an athlete workforce,
such as human resources personnel to manage hundreds
(or thousands, at some institutions) of student-athlete
job postings; compensable time; hiring, termination and
discipline; union negotiations; workers' compensation;
and more, those institutions likely will not be able to
support many sports that do not generate revenue for
the institution. The outcome, therefore, could be many
fewer opportunities for student-athletes to participate
in collegiate athletics at all.\20\
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\20\Safeguarding Student-Athletes from NLRB Misclassification:
Hearing Before the Subcomm. on Health, Emp't, Lab. & Pensions and the
Subcomm. on Higher Educ. & Workforce Development of the H. Comm. on
Educ. & the Workforce, 118th Cong. (2024) (statement of Jill
Bodensteiner, Vice President & Dir. of Athletics, Saint Joseph's Univ.,
at 4), https://edworkforce.house.gov/uploadedfiles/
bodensteiner_testimony.pdf.
Professor Mitten also discussed the potential negative
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consequences of classifying student-athletes as employees:
The broad scope of mandatory subjects of collective
bargaining (i.e., ``wages, hours, and other terms and
conditions of employment'') between a union
representing intercollegiate athletes and their
respective educational institutions and possibly others
(e.g., athletic conference and/or national governing
body) potentially includes: a) a sport-specific player
draft, which would result in the loss of or
restrictions on intercollegiate student-athletes'
current individual freedom to initially chose to attend
a particular educational institution; b) collectively
bargained wages, which are less than the value of a
full costs of attendance scholarship and other cash and
in-kind educational benefits permitted under current
NCAA rules; c) more restrictive limits on student-
athletes' NIL earning capacity; for example, the
collectively bargained NBA Uniform Player Contract
13(a)(b) prohibits all players from ``sponsor[ing]
commercial products without the written consent of the
Team, which shall not be withheld except in the
reasonable interests of the Team or the NBA; d) reduced
team size limits (e.g., the current maximum of 85
football scholarships for each Division I FBS team is
30 more than the maximum 55 players for NFL team
rosters); and e) contract and free agency restrictions
resulting in student-athletes'' lost or limited current
freedom to transfer schools.
Absent applicable CBA protections, intercollegiate
athletes legally characterized as unionized employees
who are de facto professional athletes generally could
be fired with resulting loss of wages and/or other
adverse economic consequences for unsatisfactory
athletic performance or simply the coach's desire for
replacements who will play better.
The legal characterization of private university
student-athletes as ``employees'' and their
unionization under the NLRA results in adverse economic
consequences to them under federal intellectual
property law. Most courts have ruled that the Copyright
Act preempts professional athletes' claims that media
broadcasts of games or athletic competitions in which
they participate violate their state law NIL or
publicity rights.\21\
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\21\Id. (statement of Matthew Mitten, Exec. Dir. of the Nat'l
Sports Law Inst., Marquette Univ. Law Sch., at 15-16), https://
edworkforce.house.gov/uploadedfiles/mitten_testimony.pdf.
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Conclusion
Classifying collegiate athletes as employees does far more
harm than good. Student-athletes receive considerable
benefits--predominantly free or reduced tuition--from competing
in the sports they love. Treating student-athletes as employees
would put these benefits at risk and strip many future
collegiate athletes of the opportunity to compete. There are
more than 20,000 intercollegiate sports teams with
approximately 530,000 student-athletes. Without preserving
collegiate athletes' status as students, the current
intercollegiate sports model will be destroyed to the detriment
of most current and future intercollegiate athletes.
SUMMARY
H.R. 8534 SECTION-BY-SECTION SUMMARY
Section 1 provides that the short title is the ``Protecting
Student Athletes' Economic Freedom Act.''
Section 2 clarifies that student-athletes are not employees
of an institution, a conference, or an association based on
participation in a varsity intercollegiate athletics program or
competition under any federal or state law or regulation.
Section 3 defines the following terms related to student-
athletes and intercollegiate athletics programs and
competitions: ``association,'' ``conference,'' ``institution,''
``student athlete,'' ``varsity intercollegiate athletics
competition,'' ``varsity intercollegiate athletics program,''
and ``varsity sports team.''
EXPLANATION OF AMENDMENTS
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
APPLICATION OF LAW TO THE LEGISLATIVE BRANCH
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 8534 prohibits student athletes from being
considered employees of an institution, a conference, or an
association under any federal or state law. H.R. 8534 is
applicable to student-athletes who participate in a varsity
intercollegiate athletics program or competition and therefore
does not apply to the Legislative Branch.
UNFUNDED MANDATE STATEMENT
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee adopts as its own the
estimate of mandates prepared by the Director of the
Congressional Budget Office (CBO).
EARMARK STATEMENT
H.R. 8534 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the Rules of the House of
Representatives.
ROLL CALL VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
In accordance with clause (3)(c) of House rule XIII, the
goal of H.R. 8534 is to provide that student-athletes are not
employees under federal or state law.
DUPLICATION OF FEDERAL PROGRAMS
No provision of H.R. 8534 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF THE COMMITTEE
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the committee's oversight findings and recommendations are
reflected in the body of this report.
REQUIRED COMMITTEE HEARING
In compliance with clause 3(c)(6) of rule XIII the
following hearing held during the 118th Congress was used to
develop or consider H.R. 8534: On March 12, 2024, the
Subcommittee on Health, Employment, Labor, and Pensions and the
Subcommittee on Higher Education and Workforce Development held
a joint hearing on ``Safeguarding Student-Athletes from NLRB
Misclassification.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee adopts as its
own the cost estimate prepared by the Director of the
Congressional Budget Act of 1974, the Committee adopts as its
own the cost estimate prepared by the Director of the
Congressional Budget Office.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Legislation summary: On June 13, 2024, the House Committee
on Education and the Workforce ordered to be reported eight
bills and one joint resolution. This document provides
estimates for seven of those bills and the resolution.
Generally, the legislation would:
Repeal a rule submitted by the Department of
Education relating to ``Nondiscrimination on the Basis
of Sex in Education Programs or Activities Receiving
Federal Financial Assistance;''
Allow nurse practitioners and physician
assistants to diagnose, treat, and certify an injury
and extent of disability for the purposes of federal
workers' compensation;
Require elementary and secondary schools and
institutions of higher education to meet new
requirements in order to maintain eligibility for
funding from the Department of Education;
Prevent student athletes from being
considered the employees of an institution of higher
education; and
Authorize appropriations for the educational
activities of the United States Holocaust Memorial
Museum.
Estimated Federal cost: The estimated costs of the
legislation fall within budget function 500 (education,
training, employment, and social services).
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted near the end of fiscal year 2024.
The estimated costs do not include any interaction effects
among the pieces of legislation. If all seven bills and the
resolution were combined and enacted as a single piece of
legislation, the estimated costs could be different than the
sum of the separated estimates, although CBO expects that any
difference would be small.
CBO estimates that implementing H.R. 8606 would cost $8
million over the 2024-2029 period. Implementing the remaining
bills and the joint resolution would each cost less than
$500,000 over the same period. Any related spending would be
subject to the availability of appropriated funds.
H.J. Res. 165, a joint resolution providing for
Congressional disapproval under chapter 8 of title 5, United
States Code, of the rule submitted by the Department of
Education relating to ``Nondiscrimination on the Basis of Sex
in Education Programs or Activities Receiving Federal Financial
Assistance:'' H.J. Res 165 would disapprove the rule submitted
by the Department of Education relating to ``Nondiscrimination
on the Basis of Sex in Education Programs or Activities
Receiving Federal Financial Assistance,'' as published in the
Federal Register on April 29, 2024.
The rule amends title IX of the Education Amendments of
1972 (title IX), which prohibits discrimination on the basis of
sex in any education program or activity receiving federal
financial assistance. The rule clarifies definitions related to
sex-based discrimination and harassment and specifies the
requirements for grievance procedures, and requirements for
preventing sexual discrimination and remedying its effects.
Institutions that fail to comply with title IX, as amended
by the rule, could lose federal funding. However, CBO expects
that institutions will comply with the regulations to avoid
doing so. On that basis, CBO estimates that disapproving the
rule would not affect institutions' eligibility for federal
student aid.
Based on the costs of similar activities, CBO estimates
that implementing the resolution would cost less than $500,000
over the 2024-2029 period. Any related spending would be
subject to the availability of appropriated funds.
H.R. 618, Improving Access to Workers' Compensation for
Injured Federal Workers Act: H.R. 618 would allow nurse
practitioners and physician assistants to diagnose, prescribe
treatment, and certify an injury and the extent of disability
for the purpose of compensating federal workers under the
Federal Employees' Compensation Act (FECA). Using information
from the Department of Labor, CBO expects that nonphysician
providers would be compensated at the same rate as physicians
and that total benefits provided to injured federal workers
would not significantly change. Some people may receive
treatment more quickly under the bill, which could increase
costs over the 10-year period because some payments to medical
providers that would have occurred in 2035 under current law
could be paid in 2034. On the other hand, if injured workers
receive treatment faster, some may return to work more quickly,
which could reduce costs. CBO has no basis to estimate which
effect would predominate, but we expect that those effects
would roughly offset each other. Thus, CBO estimates that
enacting H.R. 618 would affect net direct spending by an
insignificant amount.
The FECA payments are mandatory. The costs of those
payments are charged to a claimant's employing agency, which
reimburses the Department of Labor out of its salaries and
expense accounts. Any effect on discretionary spending would be
subject to future appropriation actions.
H.R. 5567, CLASS Act: H.R. 5567 would require public
elementary and secondary schools that receive funding from the
Department of Education to disclose to the department funds
received or contracts signed with foreign sources that are more
than $10,000.
CBO expects schools would comply with the new requirements;
thus, enacting the bill would not affect their eligibility to
receive federal funds. Based on the costs of similar
activities, CBO estimates that implementing the bill would cost
the Department of Education less than $500,000 over the 2024-
2029 period. Any related spending would be subject to the
availability of appropriated funds.
H.R. 6816, PROTECT Our Kids Act: H.R. 6816 would prohibit
elementary and secondary schools that receive direct or
indirect support from the government of the People's Republic
of China (including Confucius Institutes), from receiving funds
from the Department of Education.
The 2018 National Defense Authorization Act prohibited
institutions of higher education from using federal funding for
Chinese language programs at Confucius Institutes. As a result,
nearly all Confucius Institutes at postsecondary institutions
have closed, according to a Government Accountability Office
report released in 2023.\1\ On that basis, CBO expects schools
would comply with the new requirements; thus, enacting the bill
would not affect their eligibility to receive federal funds.
---------------------------------------------------------------------------
\1\Government Accountability Office, China: With Nearly All U.S.
Confucius Institutes Closed, Some Schools Sought Alternative Language
Support, GAO-20-105981 (October 2023), www.gao.gov/products/gao-24-
105981.
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Based on the costs of similar activities, CBO estimates
that implementing the bill would cost the Department of
Education less than $500,000 over the 2024-2029 period. Any
related spending would be subject to the availability of
appropriated funds.
H.R. 8534, Protecting Student Athletes' Economic Freedom
Act: The bill would prohibit student athletes from being
considered an employee of an institution based on the athletes'
participation in a varsity intercollegiate athletic program or
competition. Based on the costs of similar activities, CBO
estimates that implementing the bill would cost the Department
of Education less than $500,000 over the 2024-2029 period. Any
related spending would be subject to the availability of
appropriated funds.
H.R. 8606, Never Again Education Reauthorization and Study
Act of 2024: H.R. 8606 would authorize the appropriation of $2
million each year from 2026 through 2030 for the Director of
the United States Holocaust Memorial Museum to support
education and training related to the lessons of the Holocaust.
Under current law, the authorization of appropriations for
those activities expires at the end of 2025. The bill also
would require the Director to conduct a study on the
educational activities being carried out at the state and local
level. Assuming appropriation of the authorized amounts and
using historical spending patterns for those activities, CBO
estimates that implementing H.R. 8606 would cost $8 million
over the 2024-2029 period and $2 million after 2029.
H.R 8648, Civil Rights Protection Act of 2024: H.R. 8648
would require any institution of higher education that receives
federal student aid to make publicly available its process for
addressing violations of title VI of the Civil Rights Act and
any complaints received regarding alleged violations. The bill
also would require the Assistant Secretary for Civil Rights at
the Department of Education to give monthly briefings on
violations specific to race, color, or national origin, and
report the findings of institutional complaints.
CBO expects institutions would comply with the new
requirements; thus, enacting the bill would not affect their
eligibility for federal student aid. Based on the costs of
similar activities, CBO estimates that implementing the bill
would cost the Department of Education less than $500,000 over
the 2024-2029 period. Any related spending would be subject to
the availability of appropriated funds.
H.R. 8649, Transparency in Reporting Adversarial
Contributions to Education Act: The bill would require
elementary and secondary schools that receive funding from the
Department of Education to disclose to parents and the public
any contributions received from foreign countries and the terms
or conditions of such contributions.
CBO expects schools would comply with the new requirements;
thus, enacting the bill would not affect their eligibility to
receive federal funds. Based on the costs of similar
activities, CBO estimates that implementing the bill would cost
the Department of Education less than $500,000 over the 2024-
2029 period. Any related spending would be subject to the
availability of appropriated funds.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. CBO estimates that enacting H.R. 618 would affect net
direct spending by less than $500,000 over the 2024-2034
period.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting the joint resolution or any of the
seven bills in this estimate would not increase net direct
spending or deficits in any of the four consecutive 10-year
periods beginning in 2035.
Mandates: H.R. 8534 would impose an intergovernmental
mandate as defined in the Unfunded Mandates Reform Act (UMRA)
by prohibiting states from designating varsity athletes of a
school, conference, or association as employees of that entity.
CBO estimates that the net costs of the direct effects of the
legislation would not result in additional expenditures or
losses in revenue; therefore, the cost of the preemption would
not exceed the threshold established in UMRA for
intergovernmental mandates ($100 million in 2024, adjusted
annually for inflation).
The bill would not impose a private-sector mandate as
defined in UMRA.
Enacting the legislation may result in other secondary
effects on private entities by denying employment-related
benefits to varsity athletes that they may otherwise have
qualified for as an employee. However, CBO's estimate of those
effects is subject to uncertainty because the question of
whether athletes affected by the bill should be recategorized
as employees of their institutions remains unsettled as court
rulings, administrative decisions, and changes in policies of
the National Collegiate Athletics Association are announced.
What effect, if any, the bill would have on private entities
would depend on the final adjudication of the matter.
None of the remaining pieces of legislation contained in
this estimate would impose intergovernmental or private-sector
mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Meredith Decker
(Department of Labor); Leah Koestner (Department of Education);
Susanne Mehlman (United States Holocaust Memorial Museum);
Garrett Quenneville (Department of Education). Mandates: Erich
Dvorak, Brandon Lever, and Grace Watson.
Estimate reviewed by: Elizabeth Cove Delisle, Chief, Income
Security Cost Estimates Unit; Justin Humphrey, Chief, Finance,
Housing, and Education Cost Estimates Unit; Kathleen
FitzGerald, Chief, Public and Private Mandates Unit; H. Samuel
Papenfuss, Deputy Director of Budget Analysis.
Estimate approved by: Phillip L. Swagel, Director,
Congressional Budget Office.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 8534.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee adopts as its own the cost estimate for the bill
prepared by the Director of the Congressional Budget Office.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
As reported by the Committee, H.R. 8534 makes no changes to
existing law.
MINORITY VIEWS
INTRODUCTION
H.R. 8534, the Protecting Student Athletes' Economic
Freedom Act (Student Athletes Act), would exclude current or
former ``student athletes'' from being determined under any
federal or state law to be employees of their school or any
collegiate athletics body on the basis of their participation
in covered varsity sports or any control exerted over them as a
condition of athletics participation.
Putative employers who would be shielded from any
employment-related liability under this bill are institutions
of higher education that sponsor varsity intercollegiate
athletics; varsity intercollegiate athletic conferences; and
the NCAA and any other associations that serve as governing
bodies for varsity sports.
H.R. 8534 is opposed by the AFL-CIO, American Association
for Justice, College Football Players Association, National
College Players Association, and the Service Employees
International Union. Additionally, individual college athletes
have submitted letters in opposition to the bill.
BACKGROUND
The Business of College Sports
The National Collegiate Athletic Association (NCAA) is an
association that regulates college athletics among nearly 1,100
member colleges and universities across 102 athletic
conferences in North America.\1\ NCAA member institutions are
divided into three divisions: Division I (DI), Division II
(DII), and Division III (DIII).\2\ DI is the most competitive
level of college athletics and is primarily populated by
sizeable institutions with large athletic budgets, meanwhile
DIII is not associated with the same intensity as DI and
DII.\3\ Each division is governed by the member schools in the
division through committees.\4\ In the 2021-2022 season,
approximately 190,000 athletes participated in DI, 130,000 in
DII, and over 200,000 in DIII.\5\
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\1\Overview, NCAA, https://www.ncaa.org/sports/2021/2/16/
overview.aspx (last viewed Mar. 4, 2024); What is the NCAA?, NCAA,
https://www.ncaa.org/sports/2021/2/10/about-resources-media-center-
ncaa-101-what-ncaa.aspx (last viewed Mar. 4, 2024).
\2\What is the NCAA?, NCAA, https://www.ncaa.org/sports/2021/2/10/
about-resources-media-center-ncaa-101-what-ncaa.aspx (last viewed Mar.
4, 2024). (Of the 1,098 members schools in the NCAA, 350 are in DI, 310
in DII, and 438 in DIII.)
\3\The Differences Between NCAA Divisions, NCSA College Recruiting,
https://www.ncsasports.org/recruiting/how-to-get-recruited/college-
divisions (last viewed Mar. 4, 2024).
\4\Our Three Divisions, NCAA, https://www.ncaa.org/sports/2016/1/7/
about-resources-media-center-ncaa-101-our-three-divisions.aspx (last
viewed Mar. 4, 2024).
\5\NCAA Sports Sponsorship and Participation Rates Report, NCAA
(Oct. 27, 2022), https://ncaaorg.s3.amazonaws.com/research/sportpart/
2022RES_SportsSponsorshipParticipationRates
Report.pdf at 87 & 88.
---------------------------------------------------------------------------
The NCAA has long asserted that the draw of collegiate
sports is amateurism.\6\ Meanwhile, college sports have become
a multi-billion-dollar industry.\7\ In the 2022-2023 fiscal
year, the NCAA brought in almost $1.3 billion in revenue, a
$140 million increase from the prior fiscal year.\8\ The NCAA's
Power Five conferences--the most prominent athletic
conferences--collectively reported ``more than $3.3 billion in
revenue during their 2022 fiscal years.''\9\ In 2019, NCAA
member institutions across the three divisions generated more
than $18.9 billion in revenue from athletics, with DI schools
accounting for $15.8 billion.\10\
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\6\Safeguarding Student-Athletes from NLRB Misclassification:
Hearing Before the Subcomm. on H, Employ., Lab., & Pensions of the H.
Comm. on Educ. & the Wrkf., 118th Cong. (2024) (statement of Mark
Gaston Pearce, Exec. Dir., Workers' Rights Inst. at Geo. L. Ctr.)
(accessible at https://democrats-edworkforce.house.gov/imo/media/doc/
31424pearcetestimony.pdf) [hereinafter Pearce Testimony].
\7\Andrew Zimbalist, Analysis: Who is Winning in the High-Revenue
World of College Sports?, PBS (Mar. 18, 2023), https://www.pbs.org/
newshour/economy/analysis-who-is-winning-in-the-high-revenue-world-of-
college-sports.
\8\NCAA Generates Nearly $1.3 Billion in Revenue for 2022-23, ESPN
(Feb. 1, 2024), https://www.espn.com/college-sports/story/_/id/
39439274/ncaa-generates-nearly-13-billion-revenue-2022-23.
\9\Steve Berkowitz, NCAA's Power Five Conferences Are Cash Cows.
Here's How Much Schools Made in Fiscal 2022, USA Today (May 19, 2023),
https://www.usatoday.com/story/sports/college/2023/05/19/power-5-
conferences-earnings-billions-2022/70235450007/.
\10\15-Year Trends in Division I Athletics Finances, NCAA Research,
https://ncaaorg.s3.amazonaws.com/research/Finances/2020RES_D1-
RevExp_Report.pdf (last viewed Mar. 5, 2024).
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Students who participate in varsity intercollegiate
athletics report significant time demands, being subject to
substantial control by colleges over their time and activities,
and constraints on their ability to pursue their studies. One
NCAA survey found that,``[o]n average, football, men's
basketball, women's basketball, and baseball players in [DI]
spend about 40 hours a week on athletic activities.''\11\ The
issue persists in the offseason, with a majority of DI and DII
college athletes engaging in athletic related activities for
the same or greater number of hours as their regular
season.\12\ Beyond the hours spent on the activity, college
athletes have also spoken out about the control institutions
have on their lives off the field. As noted in Mark Gaston
Pearce's testimony before the Committee in March 2024:
---------------------------------------------------------------------------
\11\Jake New, What Off-Season?, Inside Higher Ed. (May 7, 2015),
https://www.insidehighered.com/news/2015/05/08/college-athletes-say-
they-devote-too-much-time-sports-year-round.
\12\Id.
Former University of Southern California football
players testified that USC officials retained rigid
control over their lives almost year-round including
fingerprint scanning players to mark their presence at
daily meals and conducting hydration testing and weigh-
ins multiple times a week. USC hired other students to
check that the athletes went to class. One former
football player testified that there was so much
pressure to attend practices that he would rather study
into the wee hours of the night than miss practice.\13\
---------------------------------------------------------------------------
\13\Pearce Testimony, supra note 6, at 10.
Moreover, the demands of sports reportedly impinge on
---------------------------------------------------------------------------
students' ability to pursue the academic path of their choice:
Student athletes at NCAA [DI] schools must schedule
classes around their required NCAA athletic activities
and cannot reschedule their NCAA athletic activities
around their academic programs. As a result, Villanova
University only excuses a student athlete from
participating in required athletic activities if there
is a conflict between practice and a mandatory core
class. For example, when [one student] played football
at Villanova University he was required to participate
in NCAA athletically related activities on weekdays
between 5:45 a.m. and 11:30 a.m. and could not enroll
in a non-core class during that time, including classes
that were prerequisites for academic degree programs. .
. . Because student athletes have to schedule their
classes around their required athletic activities, many
student athletes have reported that participation in
NCAA [DI] sports have prevented them from taking
classes that they wanted to take. Many student athletes
have also reported that their participation in NCAA
[DI] sports has prevented them from majoring in their
preferred major.\14\
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\14\Johnson v. NCAA, 556 F. Supp. 3d 491, 496-97 (E.D. Pa. 2021).
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Workplace Laws
Many laws afford protections or allot responsibilities
based on an employment relationship.\15\ These laws differ in
their definitions and the tests used to determine the existence
of an employment relationship, but the relevant factors tend to
include the nature of the enterprise, the distribution of
capacity to control the nature of the work performed, and the
economic relationship between the putative employer and
putative employee. Two laws of particular relevance for this
bill are the Fair Labor Standards Act of 1938 (FLSA)\16\ and
the National Labor Relations Act (NLRA).\17\
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\15\See generally Mitchell H. Rubinstein, Employees, Employers, and
Quasi-Employers: An Analysis of Employees and Employers Who Operate in
the Borderland Between an Employer-and-Employee Relationship, 14 U.
Penn. J. Bus. L. 605 (2012); Noah D. Zatz, Working Beyond the Reach or
Grasp of Employment Law, in The Gloves-Off Economy: Workplace Standards
at the Bottom of America's Labor Market 31 (Annette Bernhardt et al.
eds. 2008).
\16\Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified at 29 U.S.C.
Sec. 201 et seq.).
\17\Pub. L. No. 74-198, 49 Stat. 449 (1935) (codified at 29 U.S.C.
Sec. 151 et seq.).
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FLSA is the core federal workplace standards law governing
the minimum wage,\18\ overtime,\19\ oppressive child labor,\20\
discrimination in pay on the basis of sex,\21\ and the right of
nursing mothers to take paid breaks at work for the purpose of
expressing breast milk.\22\ FLSA is enforced by both the U.S.
Department of Labor and private litigants.\23\ In FLSA, the
term ``employ'' includes ``to suffer or permit to work.''\24\
When establishing this broad definition of employment, Congress
consciously rejected the narrower common law standard of
employment, which turns on the degree to which the employer has
control over an employee. Congress instead sought to expand the
employment relationship to hold accountable employers who would
not be liable for violations under a control test.\25\ Courts
test the applicability of this definition using the ``economic
realities'' test, which looks underneath whatever terms the
parties to a relationship use to describe it and focuses
instead on the reality of the relationship based on the
totality of the circumstances to determine whether the putative
employee is economically dependent on the potential
employer.\26\ Ultimately, the application of the economic
realities factors is guided by the overarching principle that
the FLSA should be ``construed liberally to apply to the
furthest reaches consistent with congressional direction.''\27\
The FLSA definition of employment is the ``broadest definition
that has ever been included in any one act.''\28\
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\18\Id. Sec. 6.
\19\Id. Sec. 7.
\20\Id. Sec. 12.
\21\Id. Sec. 6(d).
\22\Id. Sec. 18D.
\23\Id. Sec. 16.
\24\Id. Sec. 3(g).
\25\Bruce Goldstein et al., Enforcing Fair Labor Standards in the
Modern American Sweatshop: Rediscovering the Statutory Definition of
Employment, 46 UCLA L. Rev. 983, 991 (1999).
\26\Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290, 301
(1985) (reiterating that the test of employment under the FLSA is
economic reality); Goldberg v. Whitaker House Co-op, Inc., 366 U.S. 28,
33 (1961).
\27\Mitchell v. Lublin, McGaughy & Assocs., 358 U.S. 207 (1959).
\28\United States v. Rosenwasser, 323 U.S. 360, 363 (1945) (quoting
81 Cong. Rec. 7,657 (1938) (remarks of Sen. Hugo Black)). The FLSA's
definition of ``employ'' is a standard of ``striking breadth'' that
``stretches the meaning of `employee' to cover some parties who might
not qualify as such under a strict application of traditional agency
law principles.'' Nationwide Mut. Ins. Co v. Darden, 503 U.S. 318, 323
(1992).
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The NLRA is the foundational federal law governing labor
relations. Administered by the National Labor Relations Board
(NLRB), the NLRA protects the rights of employees to organize
and collectively bargain with their employers for improved
working conditions and benefits, among other things. Under the
NLRA, the question of whether a worker is an employee or an
independent contractor is governed by a common law test of
control.\29\ Among the factors courts and the NLRB apply when
examining whether workers are employees within the meaning of
the NLRA are ``the extent of control the employer has over the
work; . . . whether the worker is engaged in a distinct
occupation or business . . . ; whether the kind of occupation
is usually done under the direction of the employer or by a
specialist without supervision; [and] whether the employer is
or is not in business.''\30\
---------------------------------------------------------------------------
\29\See FedEx Home Delivery v. NLRB, 849 F.3d 1123, 1125 (D.C. Cir.
2017).
\30\Id. (internal citations omitted).
---------------------------------------------------------------------------
Workplace Law and College Sports Before 2021
Challenges around student athletes and labor and employment
law date back decades. In fact, the term ``student-athlete''
was originally concocted by ``the NCAA's president and legal
team in the 1950s as part of a legal strategy designed to avoid
paying a worker's compensation claim.''\31\ Student athletes
also attempted, generally unsuccessfully in the past, to bring
wage theft claims under FLSA.\32\
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\31\Pearce Testimony, supra note 6, at 3.
\32\See, e.g., Dawson v. Nat'l Collegiate Athletic Ass'n, 932 F.3d
905 (9th Cir. 2019) (holding that a student athlete was not an
``employee'' of either NCAA or conference under FLSA or under
California Labor Code); Berger v. Nat'l Collegiate Athletic Ass'n, 843
F.3d 285 (7th Cir. 2016) (holding that former student athletes had not
been employees of university).
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College athletes attempted in 2014 to unionize. The College
Athletes Players Association filed an election petition seeking
to represent football players at Northwestern University who
received grant-in-aid scholarships.\33\ An NLRB Regional
Director determined that players on Northwestern University's
football team who received grant-in-aid scholarships were
employees within the meaning of section 2(3) of the NLRA\34\
and directed that a representation election be conducted. On
review, the NLRB explicitly did not decide whether the
scholarship football players were employees. Instead, the NLRB
determined that, even if the players were statutory employees,
asserting jurisdiction in the case would not effectuate the
policies of the NLRA. Essentially, the NLRB was concerned that
if Northwestern University players were determined to be
statutory employees there would be a risk of unionized, non-
unionized, and non-employee teams all in the same conference.
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\33\Northwestern University, 362 NLRB 1350 (2015) (docket
accessible at https://www.nlrb.gov/case/13-RC-121359).
\34\See 29 U.S.C. Sec. 151(2)(3).
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The Turning Point: NCAA v. Alston
The distinctive nature of amateurism in college sports and
the student athlete was questioned in a 2021 U.S. Supreme Court
case applying antitrust law. In NCAA v. Alston, the Court
considered claims by college athletes that the NCAA system's
limits on education-related compensation amounted to an undue
restraint of trade. A unanimous Court recognized that college
sports are a profit-making enterprise and rejected the NCAA's
antitrust defense based on the supposed distinctiveness of
amateurism in college athletics.\35\
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\35\NCAA v. Alston, 141 S. Ct. 2141, 2158 (2021).
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The Alston Court did not explicitly address employment
status of college athletes, but Justice Kavanaugh's concurrence
suggested a direct line from that case to the applicability of
workplace laws. ``[T]he NCAA['s argument] that colleges may
decline to pay student athletes because the defining feature of
college sports . . . is that the student athletes are not paid
. . . is circular and unpersuasive,'' wrote Justice Kavanaugh.
``[I]t is highly questionable whether the NCAA and its member
colleges can justify not paying student athletes a fair share
of the revenues on the circular theory that the defining
characteristic of college sports is that the colleges do not
pay student athletes. . . . Nowhere else in America can
businesses get away with agreeing not to pay their workers a
fair market rate on a theory that their product is defined by
not paying their workers a fair market rate.''\36\
---------------------------------------------------------------------------
\36\Id. at 2168-2169.
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Workplace Law Challenges in the Wake of Alston
A FLSA case brought by student athletes is now moving in
the federal courts. Johnson v. NCAA, a post-Alston case raising
FLSA and state wage and hour claims in addition to common law
unjust enrichment claims, survived a motion to dismiss in 2021,
with the federal district court extensively quoting Justice
Kavanaugh's Alston concurrence.\37\ The court certified that
decision for interlocutory appeal,\38\ which was recently
argued before a three-judge panel of the Third Circuit Court of
Appeals.\39\
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\37\Johnson, 556 F. Supp. 3d at 501.
\38\Johnson v. NCAA, No. 19-5230, 2021 U.S. Dist. LEXIS 246324
(E.D. Pa. Dec. 28, 2021).
\39\Maryclaire Dale, NCAA Asks US Appeals Court to Block Pay for
Student-Athletes, Assoc. Press (Feb. 15, 2023), https://apnews.com/
article/sports-compensation-in-education-college-
6f6feb3a3973dee785ad2b778a490e0e.
---------------------------------------------------------------------------
Players on Dartmouth College's men's varsity basketball
team voted March 2024 by a margin of 13 to 2 in favor of
representation by the Service Employees International Union
(SEIU), Local 560--becoming the first ever bargaining unit
comprised of college athletes.\40\ The union election came
after a NLRB Regional Director concluded that the players were
employees for the purposes of the NLRA.\41\ The school has
filed a Request for Review of the Regional Director's decision,
and the NLRB's decision is pending on the matter.\42\
---------------------------------------------------------------------------
\40\Jimmy Golen, Dartmouth Men's Basketball Team Votes to Unionize,
Though Steps Remain Before Forming Labor Union, AP News (Mar. 5, 2024),
https://apnews.com/article/dartmouth-union-ncaa-basketball-players-
2fd912fade62ffd81218a6dc91461962; NLRB Certifies Union to Represent
Dartmouth Basketball Players, AP News (Mar. 14, 2024), https://
apnews.com/article/dartmouth-basketball-union-
b27e5702df9a92d0f2ec0ae791ca1916.
\41\Decision and Direction of Elections, Trustees of Dartmouth
College (No. 01-RC-325633 Feb. 5, 2024), https://apps.nlrb.gov/link/
document.aspx/09031d4583c5ebe4.
\42\Trustees of Dartmouth College, 01-RC-325633, https://
www.nlrb.gov/case/01-RC-325633.
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Neither the Johnson litigation nor the Darthmouth College
basketball unionization effort has reached a final disposition.
DISCUSSION
Open Door for Abuse
With its broad carve-out from state and federal laws, the
Student Athletes Act appears to exclude varsity athletes from
any and all laws protecting employees in any way--including
labor rights, wage and hour protections, occupational safety
standards, and workers' compensation programs. It is a
categorical exclusion no matter what facts on the ground exist
that might demonstrate arrangements of compensation, control
over students' time and conditions, or limitations on their
educational opportunities belying the ``student-athlete''
ideal. It would preempt any contrary state law.\43\
---------------------------------------------------------------------------
\43\See, e.g., Rick Maese, Proposed Legislation Would Give Maryland
College Athletes the Right to Organize, Wash. Post (Feb. 8, 2019),
https://www.washingtonpost.com/sports/colleges/proposed-legislation-
would-give-maryland-college-athletes-the-right-to-unionize/2019/02/07/
d3f80368-2b0c-11e9-984d-9b8fba003e81_story.html.
---------------------------------------------------------------------------
Oddly, the Student Athletes Act does not explicitly limit
its applicability to actual students. Section 3(4) of the bill
defines student athlete as ``an individual who participates in
a varsity intercollegiate athletics program.'' Neither that
definition nor the interrelated definitions in the bill of
varsity intercollegiate athletics program and competition limit
the coverage to athletes who are students enrolled in
institutions of higher education. The only limiting factor
beyond athletics participation is any rule of eligibility set
by intercollegiate sports governing bodies (although, even
then, the bill does not restrict the exclusion to student
athletes who actually comply with an association's eligibility
rules).
Moreover, the Student Athletes Act does not explicitly
limit the employment and labor law exclusion to involvement in
athletics. It declares that employment status cannot be
established under any law ``based on participation . . . in
[varsity sports] or the existence of rules or requirements for
being a member of any varsity sports team.'' Students in the
Johnson v. NAACP lawsuit have pointed out that varsity
athletics participation requires much more of them than just
training and competing: for example, NCAA Division 1 rules
``require student athletes to participate in Required
Athletically Related Activities like fundraising and community
service.''\44\ The bill could, conceivably, exclude student
athletes from workplace protections in any work required of
them as a condition of continued participation in college
sports--including work other than just playing sports.
---------------------------------------------------------------------------
\44\Johnson, 556 F. Supp. 3d at 497 (internal citations omitted).
---------------------------------------------------------------------------
Premature Action
This bill appears to be a solution in search of a problem.
Decisions about employment status under employment and labor
laws are still pending. Instead of letting the process play
out, this bill would simply push college athletes out of all
employment and labor protections before it is even clear if
they apply.
Nostalgia for a Lost Cause
The Majority's case for the bill calls for the preservation
of the amateur athletics ideal. Bill sponsor Rep. Bob Good (R-
VA-5) invoked ``America's long tradition of college
sports.''\45\ Rep. Rick W. Allen (R-GA-12) referred to the
``distinctive and valuable experience of being a student
athlete'' and the ``invaluable lessons'' of college sports.\46\
The thrust of the Majority's argument was that defining the
economic relationship between college athletes and the
collegiate sports industry would be an affront to the spirit of
amateur sports.
---------------------------------------------------------------------------
\45\Rep. Good Protects Economic Freedoms for Student Athletes, Rep.
Bob Good (May 23, 2024), https://good.house.gov/media/press-releases/
rep-good-protects-economic-freedoms-student-athletes.
\46\Comm. on Educ. & Wrkf. Dems., Markup: H.R. 618, H.R. 8606, H.R.
8648, H.J. RES. 165, H.R. 6816, H.R. 5567, H.R. 8649, H.R. 7227, H.R.
8534, Youtube (June 13, 2024), https://www.youtube.com/watch?v=-
CfZUIFBSR0 [hereinafter June 13 Markup].
---------------------------------------------------------------------------
The history of college athletics tells a different story.
In Alston, the Supreme Court traced a path in the history of
American college sports that starts with money and ends with
more money:
American colleges and universities have had a
complicated relationship with sports and money. In
1852, students from Harvard and Yale participated in
what many regard as the Nation's first intercollegiate
competition--a boat race at Lake Winnipesaukee, New
Hampshire. But this was no pickup match. A railroad
executive sponsored the event to promote train travel
to the picturesque lake. He offered the competitors an
all-expenses-paid vacation with lavish prizes--along
with unlimited alcohol . . . .
[I]t was football that really caused college sports
to take off. ``By the late 1880s the traditional
rivalry between Princeton and Yale was attracting
40,000 spectators and generating in excess of $25,000 .
. . in gate revenues.'' Schools regularly had
``graduate students and paid ringers'' on their teams.
Colleges offered all manner of compensation to
talented athletes. Yale reportedly lured a tackle named
James Hogan with free meals and tuition, a trip to
Cuba, the exclusive right to sell scorecards from his
games--and a job as a cigarette agent for the American
Tobacco Company. The absence of academic residency
requirements gave rise to ``tramp athletes'' who
``roamed the country making cameo athletic appearances,
moving on whenever and wherever the money was better.''
One famous example was a law student at West Virginia
University--Fielding H. Yost--``who, in 1896,
transferred to Lafayette as a freshman just in time to
lead his new teammates to victory against its arch-
rival, Penn.'' The next week, he ``was back at West
Virginia's law school.'' College sports became such a
big business that Woodrow Wilson, then President of
Princeton University, quipped to alumni in 1890 that
``Princeton is noted in this wide world for three
things: football, baseball, and collegiate
instruction.''\47\
---------------------------------------------------------------------------
\47\Alston, 141 S. Ct. at 2148.
The institution that ultimately became the NCAA, born to
address the crisis of death and disabling injury in college
football, quickly ruled that ``[n]o student shall represent a
College or University in any intercollegiate game or contest
who is paid or receives, directly or indirectly, any money, or
financial concession,''\48\ but ``[r]eality did not always
match aspiration'':\49\
---------------------------------------------------------------------------
\48\Id.
\49\Id. at 2149.
[Just] two decades [after creation of the NCAA], the
Carnegie Foundation produced a report on college
athletics that found them still ``sodden with the
commercial and the material and the vested interests
that these forces have created.'' Schools across the
country sought to leverage sports to bring in revenue,
attract attention, boost enrollment, and raise money
from alumni. The University of California's athletic
revenue was over $480,000, while Harvard's football
revenue alone came in at $429,000. College football was
``not a student's game''; it was an ``organized
commercial enterprise'' featuring athletes with ``years
of training,'' ``professional coaches,'' and
competitions that were ``highly profitable.''
The commercialism extended to the market for student-
athletes. Seeking the best players, many schools
actively participated in a system ``under which boys
are offered pecuniary and other inducements to enter a
particular college.'' One coach estimated that a rival
team ``spent over $200,000 a year on players.'' In
1939, freshmen at the University of Pittsburgh went on
strike because upperclassmen were reportedly earning
more money. In the 1940s, Hugh McElhenny, a halfback at
the University of Washington, ``became known as the
first college player `ever to take a cut in salary to
play pro football.''' He reportedly said: ``[A] wealthy
guy puts big bucks under my pillow every time I score a
touchdown. Hell, I can't afford to graduate.'' In 1946,
a commentator offered this view: ``[W]hen it comes to
chicanery, double-dealing, and general undercover work
behind the scenes, big-time college football is in a
class by itself.''
In 1948, the NCAA sought to do more than admonish. It
adopted the ``Sanity Code.'' The code reiterated the
NCAA's opposition to ``promised pay in any form.'' But
for the first time the code also authorized colleges
and universities to pay athletes' tuition. And it
created a new enforcement mechanism--providing for the
``suspension or expulsion'' of ``proven
offenders''. . . .
The rules regarding student-athlete compensation have
evolved ever since. In 1956, the NCAA expanded the
scope of allowable payments to include room, board,
books, fees, and ``cash for incidental expenses such as
laundry.'' In 1974, the NCAA began permitting paid
professionals in one sport to compete on an amateur
basis in another. In 2014, the NCAA ``announced it
would allow athletic conferences to authorize their
member schools to increase scholarships up to the full
cost of attendance.'' The 80 member schools of the
``Power Five'' athletic conferences--the conferences
with the highest revenue in Division I--promptly voted
to raise their scholarship limits to an amount that is
generally several thousand dollars higher than previous
limits.
In recent years, changes have continued. The NCAA has
created the ``Student Assistance Fund'' and the
``Academic Enhancement Fund'' to ``assist student-
athletes in meeting financial needs,'' ``improve their
welfare or academic support,'' or ``recognize academic
achievement.'' These funds have supplied money to
student-athletes for ``postgraduate scholarships'' and
``school supplies,'' as well as ``benefits that are not
related to education,'' such as ``loss-of-value
insurance premiums,'' ``travel expenses,''
``clothing,'' and ``magazine subscriptions.'' In 2018,
the NCAA made more than $84 million available through
the Student Activities Fund and more than $48 million
available through the Academic Enhancement Fund.
Assistance may be provided in cash or in kind, and
there is no limit to the amount any particular student-
athlete may receive. Since 2015, disbursements to
individual students have sometimes been tens of
thousands of dollars above the full cost of attendance.
The NCAA has also allowed payments ``incidental to
athletics participation,'' including awards for
``participation or achievement in athletics'' (like
``qualifying for a bowl game'') and certain ``payments
from outside entities'' (such as for ``performance in
the Olympics''). The NCAA permits its member schools to
award up to . . . two annual ``Senior Scholar Awards''
of $10,000 for students to attend graduate school after
their athletic eligibility expires. Finally, the NCAA
allows schools to fund travel for student-athletes'
family members to attend ``certain events.''\50\
---------------------------------------------------------------------------
\50\Id. at 2149-2150 (emphasis added and internal citations
omitted).
If the world imagined by the Majority ever had existed, it
is long over. At the end of May 2024, the NCAA and its major
conferences announced settlements in three post-Alston
antitrust cases brought by college athletes. The proposed
settlement would, among other things, implement a new revenue
sharing model to distribute a portion of proceeds from revenue
streams such as broadcast rights, ticket sales, and
sponsorships to the athletes. In the first year, each school
would be allowed to distribute as much as $20 million to
athletes, and that amount would increase with total
revenues.\51\ The deal is ``a change that would crush any last
notions of amateurism in major college sports.''\52\
---------------------------------------------------------------------------
\51\Becky Sullivan, What We Know and What We Don't About a Historic
Settlement to Pay College Athletes, NPR (May 24, 2024), https://
www.npr.org/2024/05/24/nx-s1-4978680/house-ncaa-settlement-pay-college-
athletes.
\52\Jesse Dougherty, In Major Change, College Athletes Set to Be
Paid Directly by Schools, Wash. Post (May 23, 2024), https://
www.washingtonpost.com/sports/2024/05/23/ncaa-settlement-revenue-
sharing/.
---------------------------------------------------------------------------
College athletes, acting through counsel in the context of
antitrust litigation, advocated for their interests in these
negotiations. If the pending NLRB case is decided in favor of
college athletes, future negotiations could take place in the
context of labor relations, with workers acting through their
own democratically elected leadership. There is no better way
to safeguard the economic freedom of college athletes.
Real Problems Being Ignored
Ranking Member Robert C. ``Bobby'' Scott (D-VA-3) and
Workforce Protections Subcommittee Ranking Member Alma Adams
(D-NC-12) have asked twice for the Committee on Education and
the Workforce to hold a hearing on the crisis of child labor
and consider the legislation offered to solve that crisis.\53\
Democratic members also have been pressing for action to raise
the minimum wage, address heat stress, expand protections for
workers to exercise their rights to join a union and bargain
collectively, and much more.\54\ H.R. 8534, the so-called
Protecting Student Athletes' Economic Freedom Act, does nothing
to address the very real problems that Americans face. In fact,
as Ranking Member Scott put it during the Committee's markup,
the only ``freedom'' it protects is Committee Republicans'
freedom to strip varsity athletes of their rights and
protections under fundamental labor and employment
statutes.\55\
---------------------------------------------------------------------------
\53\See Letter from Reps. Robert C. ``Bobby'' Scott & Alma S. Adams
to Rep. Virginia Foxx (Sept. 13, 2023), https://democrats-
edworkforce.house.gov/download/scott-adams-second-letter-to-foxx-re-
request-for-child-labor-hearing; Letter from Reps. Robert C. ``Bobby''
Scott & Alma S. Adams to Rep. Virginia Foxx, (June 6, 2023), https://
democrats-edworkforce.house.gov/download/scott-adams-letter-to-foxx-re-
request-for-child-labor-hearing.
\54\See, e.g., Asuncion Valdivia Heat Illness, Injury, and Fatality
Prevention Act of 2023, H.R. 4897, 118th Cong. (2023); Protecting
America's Workers Act, H.R. 2998, 118th Cong. (2023); Protecting
Children Act, H.R. 4440, 118th Cong. (2023); Protecting the Right to
Organize Act of 2023, H.R. 20, 118th Cong. (2023); Raise the Wage Act,
H.R. 3264, 118th Cong. (2023); Wage Theft Prevention and Wage Recovery
Act, H.R. 5402, 118th Cong. (2023; Workplace Violence Prevention for
Health Care and Social Service Workers Act, H.R. 2663, 118th Cong.
(2023).
\55\June 13 Markup, supra note 46.
---------------------------------------------------------------------------
CONCLUSION
For the reasons stated above, Committee Democrats
unanimously opposed H.R. 8534 when the Committee on Education
and the Workforce considered it on June 13, 2024. We urge the
House of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Gregorio Kilili Camacho Sablan,
Suzanne Bonamici,
Mark Takano,
Mark DeSaulnier,
Pramila Jayapal,
Members of Congress.
[all]