New California Law Lets College Athletes Profit on Their Name Recognition, Likenesses

College sports are a multi-billion-dollar industry, yet the young men and women whose athletic talents make the business possible are considered amateurs. As such, they don’t get paid for playing the game; for representing their institution on TV, in advertising, and in video games; or for wearing exclusive brand names on their uniforms and footwear.

Newly adopted state legislation in California seeks to change the balance of the economic playing field. It would allow individual athletes to hire business agents and market their own names and likenesses for personal endorsements.

The NCAA, which governs 24 intercollegiate sports featuring about 460,000 athletes, opposes the law, which it has called “unconstitutional,” according to the Los Angeles Times. Leading California universities and athletic conferences around the nation have aligned with the NCAA, stating they fear fines and expulsion by the governing body should they comply with the law, which is not to take effect until 2023.

Since the September 30 adoption of the California bill, lawmakers in other states and in Congress have proposed similar legislation. The Post-Gazette reported that Pennsylvania State Representatives Dan Miller and Ed Gainey of Allegheny County have begun to circulate a co-sponsorship memo. PA Senate Majority Leader Jake Corman, whose district includes Penn State’s main campus, is “intrigued” by the new California law, according to a statement attributed to Corman’s spokeswoman.

“He finds the action in California interesting,” the spokeswoman reportedly said. “The manner in which they are going about it is different. And so he wants to take a look at what they have done, what other possibilities are.”

Corman has been at odds with the NCAA before. In 2013, he and then-State Treasurer Rob McCord successfully sued the governing body to repeal the sanctions it issued against Penn State and its late football coach, Joe Paterno, as a result of the Jerry Sandusky sex abuse case.

There are 1,115 NCAA-member schools, including 58 in California and 97 in Pennsylvania. Yet, most of the focus has been on only those schools with major football and men’s basketball programs due to the disparate income they collect from TV broadcast rights, apparel contracts, ticket sales, and other revenue streams.

Thanks largely to the Big Ten’s $2.64 billion TV deal with ESPN and Fox, Penn State reported a $10 million profit for its football program on more than $100 million in revenue for 2017-18. Those figures do not include revenue or net income for the university’s non-football sports.

Pittsburgh, as a member of the ACC, collected about $26.6 million in TV revenue from the conference in 2018, the Associated Press reported. Earlier this year, the American Athletic Conference – with Temple as a member – signed a deal with ESPN that will pay each member school about $7 million per year, according to the AP.

Apparel companies also pay big money directly to select universities with high-profile sports programs. In 2016, UCLA and Under Armor signed the nation’s most lucrative contract, a 15-year deal that will compensate the university almost $13 million a year.

Appeals Court: McDonald’s Not Liable for Franchise Wage, Hour Violations

The nation’s largest federal appeals court has rejected a claim by a group of fast food workers that McDonald’s Corporation should be liable for alleged wage and hour violations by one of the company’s franchise holders. The ruling by the San Francisco-based Ninth Circuit sustained a lower court verdict and dealt a blow to worker advocates seeking to use the courts to broaden the legal definition of a joint employer.

In Salazar et. al. v. McDonald’s Corp., the plaintiffs claimed that they were denied overtime pay, meal and rest breaks, and other benefits by the franchisee – known as the Haynes Family Limited Partnership – and that McDonald’s was liable for damages under California’s wage law. They argued that McDonald’s exerted sufficient control over the franchise to be considered a joint employer and that it “owed the employees a duty of care,” according to JDSupra.com.

The court found that while the franchisee was required to use the corporation’s computer systems to open and close its restaurants each day, and though the corporation trained managers and supervisors how to operate the privately-owned restaurants, McDonald’s had no direct control over the hours, wages, or working conditions in the restaurants. Nor did McDonald’s have the power to hire or fire individual franchise employees.

Further, the court found that McDonald’s can require its employees to wear corporate uniforms and prepare food in a certain way as a matter of quality control and brand protection.

“That type of control ‘is central to modern franchising and to (McDonald’s) ability to maintain brand standards,’” Judge Susan Graber said, according to BloombergLaw.com.

“In essence, branding does not represent control over wages, hours, or working conditions,” JDSupra.com stated.

The appeals court ruling appears to reflect the four key points of joint-employer rule changes proposed in April by the U.S. Department of Labor. The department is expected to prioritize the finalization of the proposed rule changes under new Labor Secretary Eugene Scalia, who was recently confirmed to replace Alexander Acosta (the former U.S. attorney who came under fire for his role in the Jeffrey Epstein case).

The department proposes a “four-factor test” for joint employer status based on the potential employer’s power to hire or fire the employee; to supervise and control the employee’s work schedules or conditions; to determine the employee’s rate and method of payment; and to maintain the employee’s employment records.

Philly Public Broadcasting Journalists Form Bargaining Unit, Request Recognition

Almost 100 broadcast journalists from WHYY – Philadelphia’s National Public Radio and Public Broadcasting System affiliate – have petitioned their station to recognize their new union.

More than 80 percent of almost 100 reporters, producers, and program hosts have signed union cards to join the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA), according to the Inquirer. If WHYY voluntarily recognizes them as a bargaining unit, it would spare the employees from the lengthier procedure of a union certification election supervised by the National Labor Relations Board.

Identifying themselves as “content creators,” the union organizers issued a statement via Twitter that said in part, “WHYY has become a bastion of Philadelphia journalism at a time when local media institutions have collapsed across the country. Yet over and over, talented employees leave due to untenable working conditions. We want to be able to stay and build our careers at WHYY without sacrificing our well-being. … We want a work environment that values professional growth and experience, allowing us to commit more deeply to WHYY and ultimately serve our audience better.”

WHYY-TV and WHYY-FM did not immediately agree to the request, according to a WHYY.org news report that suggested the employer would ask petitioners to reconsider the union option.

“We respect the rights of our employees to engage in this process and look forward to discussing with them whether the most beneficial way to do this is through SAG-AFTA,” the employer stated.

The Inquirer noted that “journalists across the country are forming unions, as the industry faces precarious finances withstands relentless job cuts. In new media outlets such as BuzzFeed and Vox Media and newspapers such as the Los Angeles Times and the Arizona Republic, workers have organized and often seen fierce pushback from managers.”

September National Jobs Update

The seasonally adjusted national unemployment fell 0.2% from August to September 2019 to 3.5%, marking its lowest level since December 1969. Over the month, unemployment rolls declined by 275,000 individuals, lowering total unemployment to 5.769 million. National unemployment statistics for the month are as follows:

• Total Unemployment – 5,769,000
• Change Over Month –   DOWN   275,000
• Change Over Year –   DOWN   217,000
• Change Over Trump Term –   DOWN   1,796,000
• Rate Change Over Month –   DOWN   0.2%
• Rate Change Over Year –   DOWN   0.2%
• Rate Change Over Trump Term –   DOWN   1.2%
• Rate Change Over Obama 2nd Term –   DOWN   3.3%

As indicated above, total unemployment’s rounded percentage of the labor force, or unemployment rate, fell over the month (rate = unemployment / labor force). The labor force is the total number of employed individuals combined with the total number of unemployed individuals actively searching for work. Growth in the labor force can be a sign of a strengthening economy from more people working and/or more individuals searching for jobs. Marking a fifth consecutive monthly increase, the national labor force grew by 117,000 individuals from August to September 2019, a combination of total employment* rising by 391,000 individuals and total unemployment down by 275,000 individuals as noted above, pushing its total to a new record high of 164 million.

Since President Trump took office, the national labor force has grown by 4.346 million individuals (unemployment -1.796 million & employment +6.141million), continuing progress made over President Obama’s second term when the national labor force grew by 3.930 million individuals (unemployment -4.906 million & employment +8.836 million). National labor force statistics for the month are as follows:

• Total Labor Force – 164,039,000
• Change Over Month –   UP   117,000
• Change Over Year -   UP   1,984,000
• Change Over Trump Term –   UP   4,346,000
• Change Over Obama 2nd Term –   UP   3,930,000

Non-farm* jobs grew by 136,000 over the month in September 2019, below economists’ projections, as overall growth for the year remains down. Year-to-date, percentage non-farm job growth stands at its lowest level (Jan. to September) since 2010. Additionally, average monthly non-farm job gains through President Trump’s term thus far (188,000) remain below average monthly growth seen over President Obama’s second term (217,000). National non-farm employment statistics for the month are as follows:

• Total Non-Farm Employment – 151,722,000
• Change Over Month –   UP   136,000
• Change Over Year –   UP   2,147,000
• Change Over Trump Term –   UP   6,027,000
• Change Over Obama 2nd Term –   UP   10,412,000

*Total employment for labor force provided by U.S. Census Household survey. The separate BLS Establishment survey measures non-farm jobs only.

August County by County Unemployment

Statewide Rate: 3.9%
Source: PA Department of Labor & Industry