In a stunning and potential landmark decision, a Regional Director of the National Labor Relations Board has found that football players receiving grant-in-aid scholarships from Northwestern University (the University) are “employees” under the National Labor Relations Act.  In his decision released Wednesday afternoon, the Regional Director determined that “players receiving scholarships to perform football-related services for [the University] under a contract for hire in return for compensation are subject to [the University]’s control and are therefore employees within the meaning of the Act.”  Accordingly, the Regional Director ordered that an election be conducted among all football players receiving grant-in-aid scholarships who have not exhausted their playing eligibility for the University. In support of his decision, the Regional Director found that the players receive compensation for the athletic services they perform in the form of scholarships, which pay for the players’ tuition, fees, room, board, and books and can total as much as $76,000 per calendar year for up to five years.  Furthermore, the Regional Director found that the players are under the strict control of the University throughout the year.  The coaches determine the location, duration, and manner in which the players carry out their football-related activities; they monitor the players’ adherence to NCAA and team rules; and they control “nearly every aspect of the players’ private lives,” including their living arrangements, applications for outside employment, off-campus travel, social media posts, and communications with the media.  In contrast, the Regional Director held that “walk-ons do not meet the definition of ‘employee’ for the fundamental reason that they do not receive compensation for the athletic services that they perform.” The University has confirmed that it plans to appeal the decision to the full National Labor Relations Board in Washington, D.C.   If upheld, the decision has the potential to dramatically alter the world of big-time athletics in higher education as it would open the door for scholarship athletes at all private universities to unionize.  Indeed, the decision could have implications for scholarship students in a number of areas beyond athletics. The Union, College Athletes Players Association (CAPA), which has the financial backing of the United Steelworkers, is seeking, among other demands, financial coverage for former players with sports-related medical expenses and the creation of an educational trust fund to help former players graduate.

Following the lead of North Carolina last year, members of the Virginia legislature have  become the latest to propose legislation to provide students at public colleges and universities the right to attorney representation in on-campus disciplinary proceedings. With narrow exceptions generally arising only at public institutions (e.g., in circumstances where a student faces parallel criminal charges arising out of an incident giving rise to an on-campus proceeding), courts have almost uniformly held that students have no right to counsel during campus disciplinary proceedings.  Even in those circumstances where courts have mandated the presence of an attorney, the attorney has been restricted to providing advice to protect the interests of the student, rather than being permitted to perform a formal advocacy role in which he or she presents a defense on a student’s behalf. Like the 2013 North Carolina law after which it appears to have been modeled, the proposed Virginia legislation would change this equation drastically at public institutions. With limited exceptions for charges of academic dishonesty, any student who is accused of a violation punishable by a suspension of greater than 10 days or expulsion would have the right to be represented, at the student's expense, by a licensed attorney (or nonattorney advocate). If present, the attorney would be entitled to "fully participate" during the proceedings, presumably meaning that counsel would be entitled to present opening and closing arguments, cross-examine witnesses (either directly or through the hearing body), make objections, and generally function in a manner similar to defense counsel in a criminal court.  If this represents the start of a trend in higher education disciplinary law, it is a concerning one.  Colleges and universities do not design their disciplinary systems to function with all of the technicalities of a criminal process, and with good reasons. Campus disciplinary proceedings are designed to be educational in nature, and a core component of the learning experience is a student's ability to speak on his or her own behalf, to take responsibility for his or her behaviors, and to learn from them. Much of this will be lost in the event that students are permitted to have attorneys speak for them throughout the disciplinary process. Reasonable minds can, of course, differ as to whether the foregone educational benefit is outweighed by the need to protect accused students in the context of potentially career-altering additions to their records; however, attorney mandates have other, more significant and less debatable, adverse implications.  Ironically, proponents of these legislative efforts have characterized them as “leveling the playing field” between accused students and their institutions, but the presence of active defense counsel would almost certainly swing the balance in the opposite direction, making it both more difficult and more costly for colleges and universities to regulate conduct on their campuses.  Indeed, the presence of counsel for accused students may well lead an institution to retain counsel on behalf of the disciplinary panel and/or institutional representatives presenting charges, and to allow student complainants to retain private counsel, turning the entire process into a hypertechnical, confrontational and protracted legal proceeding. The potential costs to institutions, both financial and in terms of the functioning of their disciplinary processes, are not insignificant. It may be that the courts and regulatory authorities in jurisdictions adopting attorney mandates will bring some degree of reasonableness to the analysis; for example, it is possible to argue that the right for an attorney to “fully participate during any disciplinary procedure” means that attorneys can only participate to the extent that an institution’s process otherwise allows any advocate to function in the place of an accused student, and/or that institutions may have procedures that limit the role of counsel (e.g., by precluding cross-examination) provided that the procedural limitations are applied even-handedly.  However, this is far from clear, and appears to be contrary to the expectations of those who have sought to implement these reforms. Perhaps more troubling, a mandate to allow active attorney advocacy in on-campus proceedings raises the prospect of serious inequities in the disciplinary process.  For example, although the Virginia legislation (like the North Carolina legislation before it) permits the use of "non-attorney advocates," affluent students who are able to retain the highest quality (and correspondingly highest-priced) counsel may have a greater chance of successfully defending disciplinary proceedings and avoiding responsibility for their actions than will students from underprivileged backgrounds. Similarly, these requirements may have chilling effects on institutions’ ability to address allegations of sexual misconduct, where institutions are required to afford complainants rights equivalent to those granted to accused students. Although this may not translate into a requirement that institutions furnish counsel to complainants in such cases (as noted above, accused students are required to pay for their own counsel), many complainants may not have the financial wherewithal or inclination to retain counsel in such circumstances, so as to enable them to have their accounts presented as effectively as those of their alleged assailants or harassers.  They may also be understandably fearful of the prospect of being cross-examined by defense counsel (directly or, as is common, through the hearing body) in the manner that often proves traumatic in criminal processes. If this increases the reluctance to report sexual misconduct with which so many institutions already struggle, it will be a truly unfortunate byproduct of these legislative efforts to protect student rights. None of this is to say that accused students are not entitled to a process that is fundamentally fair when facing charges of misconduct; this has always been the law, and students sanctioned by institutions already have the right to seek judicial review of disciplinary determinations in most jurisdictions. Thus, colleges and universities are already accountable for their processes, and should of course take steps to ensure that their proceedings are conducted fairly and even-handedly. Moreover, if institutions are concerned that accused students need legal advice to protect their interests, they always have the option to design their procedures to permit (as many do) the presence of counsel to provide quiet advice to the accused.  However, “lawyering up” the entire process by requiring institutions to permit full and active advocacy by counsel would seem, on the whole, to be counterproductive.

As colleges and universities in New York know, new Regulations were recently adopted, effective December 31, 2013, amending the state’s Minimum Wage Orders, including the Minimum Wage Order commonly applicable to not-for-profit higher education institutions. These amendments reflect the statutory increase in New York’s minimum wage to $8.00 per hour, which is already in effect, as well as future scheduled raises in the state minimum wage to $8.75 per hour as of December 31, 2014, and to $9.00 per hour as of December 31, 2015. The relevant provisions of the above-referenced Minimum Wage Order apply to colleges and universities deemed to be “nonprofitmaking institutions.” This term includes:  “any corporation, unincorporated association, community chest, fund or foundation organized and operated exclusively for religious, charitable or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholder or individual.” While this Minimum Wage Order generally applies the new $8.00 per hour minimum rate, it also continues to provide that bona-fide students working “in or for” such “nonprofitmaking institutions,” e.g., not-for-profit colleges and universities, are exempt from the definition of “employee.”  In other words, these students are exempt from the increased state minimum wage. The term “student” is specifically defined in the applicable Minimum Wage Order as “an individual who is enrolled in and regularly attends during the daytime a course of instruction leading to a degree, certificate or diploma, offered at an institution of learning, or who is completing residence requirements for a degree.”  Further, under this definition, such an individual continues to be a “student” even when school is not in session, so long as she was a student during the preceding semester. However, higher education institutions should remember that the Fair Labor Standards Act (“FLSA”) does not contain a comparable exemption and, at the present time, federal law independently imposes a minimum wage of $7.25 per hour for non-exempt employees.   Thus, hourly student employees must still generally be paid at this federal minimum wage rate for all hours worked, and at time-and-a-half of their “regular rate” for all hours worked over 40 in a workweek. At the same time, not all student “work” at higher education institutions constitutes an employment relationship subject to the FLSA and its requirements, although this distinction is not always easy to make.  Additionally, certain full-time students may be paid sub-minimum wages under the FLSA, but higher education institutions must obtain prior approval from the federal Wage & Hour Division. The bottom line is that colleges and universities should carefully examine their minimum wage practices, and practices with students who provide services to ensure compliance with both state and federal law.

The turn of the calendar to a new year provides an opportunity for New York colleges and universities to perform an early assessment of their compliance with Article 129-A of the New York State Education Law in anticipation of the need to furnish evidence of compliance to the New York State Education Department (NYSED) during the summer of 2014. By way of background, Article 129-A requires public and private colleges and universities in New York State to maintain institutional policies on a variety of subjects, including campus security and the maintenance of public order on campus; sexual assault, domestic violence and stalking prevention; campus crime reporting and statistics; investigation of violent felony offenses; bias related crime prevention; the marketing of credit cards on campus; and disclosure of fire safety standards in institutionally-owned or operated housing facilities. On or before July 1 of each year, institutions are required to certify to NYSED their compliance with the requirements of Article 129-A (i.e., that they have policies meeting the statutory requirements). However, in 2004 institutions were required, and every ten years thereafter are required, to submit actual copies of their policies as evidence of compliance.  Thus, New York institutions will be required to submit their policies to NYSED on or before July 1, 2014. In anticipation of this requirement, institutions may wish to perform a self-audit to confirm that the requisite policies are in place, and are suitable for filing.  Of course, institutions should be monitoring compliance in these areas on a continuous basis, but they may want to review the content of policies in greater detail (as opposed to confirming their mere existence) in anticipation of the public filing, so as not to be caught needing to make eleventh hour amendments to policies (or to adopt new policies) over the summer, when boards or others whose approval may be required are not readily available.

The status of graduate assistants under the National Labor Relations Act (“Act”) -- are they employees eligible to organize or students without employee status under the Labor Law -- has garnered considerable attention in recent years.  New York University (“NYU”) graduate assistants will, for the second time in recent years, be represented by a union and negotiate their terms and conditions of employment due to a neutrally supervised vote held under an agreement between NYU and the United Auto Workers (“UAW”).   Under that agreement, graduate, research, and teaching assistants at NYU have voted overwhelmingly (620 to 10) in favor of union representation by the UAW.  The election occurred after the UAW and NYU reached agreement in November under which NYU agreed to remain neutral, refrain from participating in the election, and bargain in good faith for a contract if a majority voted in favor of representation.  Under the same agreement, the UAW agreed to withdraw pending petitions for election before the National Labor Relations Board (“NLRB”). A unit of graduate assistants at NYU had previously voted in favor of representation in 2002 and the UAW had bargained a contract with NYU.  During that first contract, the NLRB decided the Brown University case, 342 NLRB 42 (2004), holding that certain graduate assistants were primarily students, not employees and therefore were not legally entitled to organize under the Act.  NYU withdrew recognition of the Union in response to the Brown decision.  In 2010, the UAW filed several petitions seeking to represent graduate assistants and providing a vehicle for the NLRB to revisit the Brown ruling.  The NLRB sought briefing from the parties and interested organizations concerning the employee status of graduate assistants.  Many felt that Brown was likely to be overturned by the NLRB appointed by the Obama administration. The agreement between NYU and the UAW resulted in the withdrawal of the NLRB proceeding.  The NLRB has issued an unpublished decision indicating that it is granting the Union’s request to withdraw and now considers the review of the Brown decision to be “moot.” Thus, NYU will enter into bargaining with the UAW for its graduate students.  The broader issue of whether graduate students are employees from the NLRB’s perspective will have to wait for a new test case before the Board.  In the interim, Brown remains governing law.

In today’s environment, with colleges and universities facing rising expenses and pressure to refrain from increasing tuition and other charges, the cost of legal compliance at the federal, state and local levels is a significant, and seemingly never-ending, concern.  Last month saw the prospect of relief, or at least a sympathetic ear, at the federal level. On November 18, members of the U.S. Senate Education Committee announced the formation of the Task Force on Government Regulation of Higher Education, comprised of 14 college presidents and higher education industry experts, for the stated purpose of studying the burdens of federal regulation on higher education.  The Task Force, convened by Senators Lamar Alexander (R- Tennessee), Michael Bennet (D- Colorado), Richard Burr (R- North Carolina) and Barbara Mikulski (D-Maryland), is to conduct “a comprehensive review of federal regulations and reporting requirements affecting colleges and universities and make recommendations to reduce and streamline regulations, while protecting students, institutions and taxpayers.” A particular focus of the Task Force’s review will be the contention that government “red tape” inflates costs and stifles innovation. It is contemplated that the Task Force’s recommendations will be made available for consideration in connection with congressional discussion over reauthorization of the Higher Education Act. Though a healthy dose of skepticism is understandable, and likely warranted, as to the prospect of meaningful regulatory relief, the work of the task force and congressional reaction to it bears watching.

From time to time, institutions will find themselves in a dispute with a donor, a donor’s descendants (in jurisdictions that allow standing for such actions), and or state attorneys general or other regulators, over the appropriate use of a prior gift.  A recent case involving The Johns Hopkins University is the latest to illustrate the importance of the language used in any gift, or other contractual, instrument. In the late 1980’s, the University was the beneficiary of the purchase of an undeveloped piece of property for a price that was about one-third of the fair market value of the parcel.  The seller was a well recognized critic of development in Montgomery County, Maryland.  She sold the property at a reduced price to the University (recognizing the excess value of the transaction as a charitable contribution) rather than succumb to numerous offers for the property’s commercial development, and with the apparent expectation for the University to develop it as a pastoral-like University campus.  Accordingly, the contract and deed restricted the University’s use of the parcel to “agricultural, academic, research and development, delivery of health and medical care and services, or related purposes only, which uses may specifically include but not be limited to development of a research campus in affiliation with one or more divisions” of the University.  After plans were approved to allow for rezoning of the parcel to permit much higher density use of the property than, according to the donor’s surviving family, the donor would ever have considered acceptable, the family commenced litigation to prevent the University from moving forward. Ultimately the Maryland Court of Appeals determined that the restrictions in the deed and contract were “unambiguous” and allowed the development the University sought.  The Court found that there was no dispute that the University’s plan sought only to pursue “agricultural, academic, research and development, delivery of health and medical care and services, or related purposes” as specified in the restriction.  The dispute was whether the contract and deed restricted the scale and density of that development and whether they required “Hopkins qua Hopkins to own and operate the buildings and programs” on the property. While the Court noted that the donor’s family was “no doubt … genuinely aggrieved” by the University’s plans to deviate from the donor’s thoughts regarding the future use of the property, the Court noted that its “task is to examine the agreement the parties did sign, not the agreement that one or the other now wishes they had negotiated instead.”  Relying on basic contract construction principles, the Court rejected the family’s contention that the restriction on “its [the University’s] use” of the property to the specified purposes meant that only the University could own or occupy that property and that it prohibited leasing any portion of the property to third parties:  “We cannot see why Hopkins leasing the property to others to accomplish one or more of the listed purposes does not qualify as a use by Hopkins….Here, the [property] will be used for an indisputably approved purpose, and nothing in [the deed or contract] restricts how or through whom the Buyer, Hopkins, can carry out those purposes.”  The Court also rejected the family’s argument that the mere reference to a “campus” use imposed scale and density restrictions on the University’s development of the parcel. Ultimately the Court found that the unambiguous language of the deed and contract did not preclude the University from moving forward with its plans, notwithstanding the seller’s intent.  Had the language been less clear, the result could have been different, in that the seller’s intent might have functioned to further restrict the University in its actions.  This possibility highlights the importance of careful drafting in gift instruments.  While institutions may be understandably reluctant to test donors’ patience by negotiating extensively over language in a gift instrument, they should always keep in mind that needs and resources change over time.  Restrictions, especially on real property, which an institution may see as workable at the time a gift is made, may prove far less workable when it comes time to actually make use of the gift.  As a result it is important to make sure that gift instruments provide sufficient flexibility to the institution to allow it to deal with the gift in an appropriate manner, and/or to modify the permitted use as desired, as circumstances change several decades or more into the future.  Clarity in this regard may not only help prevent years of costly litigation and/or regulatory scrutiny, but it can also help to avoid public disputes that can negatively impact its relationship with future donors.

On October 28, New York State released information necessary for private colleges and universities to begin applying to participate in the Start-Up NY Program.  As you may recall, the Start-Up NY Program was enacted during the Summer of 2013, and provides very substantial benefits to certain businesses that open within designated areas proximate to qualifying higher educational institutions. The amount of space available for private institutions to participate in the Program is limited. Given the limit on available space, any delay in submission of the requisite application materials may cause an institution to be left out of the Program.  As a result, now that the State has clarified the application process for private colleges and universities, institutions interested in participating in the Start-Up NY Program should act immediately to submit their application materials.

On July 25, 2013, Governor Andrew Cuomo signed into law the Kerry Rose Fire Sprinkler Notification Act, which requires the immediate disclosure of residential fire safety system information by colleges and universities in New York State. The Act is named for Kerry Rose Fitzsimons, a college student who died, along with two others, in a 2012 fire in her off-campus residence.

The Act adds a new Section 6438 to the New York Education Law, requiring institutions to disclose in writing to students residing in an institutionally-owned or operated housing facility a description of the facility’s fire safety system, including whether the facility is (or is not) equipped with a sprinkler system. The written notification must also indicate how students may access the institution’s Campus Fire Safety Report published pursuant to the federal Higher Education Opportunity Act.

The Act is effective immediately. Accordingly, colleges and universities in New York should take steps to inform all current and future residential students of the information described above, taking care to ensure that the disclosed information provides an accurate description of their fire safety capabilities. The Act does not specify the precise timing or means by which notice must be provided, other than to require that the notice be in writing. We anticipate that in the future, most institutions will choose to provide this information as part of the documentation by which students elect to reside in their residential facilities; however, an ad hoc notification process may be necessary for those students who have already completed the housing registration procedure for the 2013-2014 academic year.

"Happy Birthday to You" is one of the most widely recognized songs in the world.  Did you also know that the song brings in about $2 million per year to the copyright holders?  Ever wondered why they sing something other than "Happy Birthday to You" at your favorite restaurant? All your questions about this ubiquitous song are answered below (including questions you didn't know you had!).  Here's your "5 Question Guide" to "Happy Birthday to You":   1. You mean "Happy Birthday to You" isn't in the public domain? No, the song is still under copyright protection in at least the United States and Europe, and continues to bring in substantial licensing fees every year.   2. So what does that mean? Do I owe someone money for singing on Grandma’s birthday? Probably not.  The U.S. Copyright Act grants certain rights to copyright holders, one of which is the right to control when the work is performed “publicly.” A performance is considered “public” when the work is performed in a “place open to the public or at a place where a substantial number of persons outside of a normal circle of a family and its social acquaintances are gathered.” A performance is also considered to be public if it is transmitted to multiple locations, such as through television and radio. So, unless you sang Happy Birthday in a public place for others to hear, or broadcast it to the public, you don’t need to write a check.  Singing Happy Birthday with friends and family in your home is just fine. Notably, this is the reason that most restaurants have their own lyrics and music to perform for a customer’s birthday; singing Happy Birthday to You would constitute a public performance.   3. Who wrote "Happy Birthday to You"? Most agree that the song is a variation of “Good Morning to All,” a children’s song written and composed in 1893 by sisters Patty and Mildred J. Hill of Louisville, Kentucky.  Exactly who modified the original song is unclear.   4. Who owns the rights to "Happy Birthday to You"? The rights are currently owned by Warner/Chappell Music, Inc.  According to some reports, the company brings in as much as $2 million a year from licensing the song for public performances in movies, television, radio, as well as live performances.   5.  So when can I sing “Happy Birthday” in public? The song will not officially enter the public domain in the United States until 2030, or 95 years after publication (a term that has been extended several times by the Copyright Act of 1976 and the Copyright Term Extension Act of 1998).  The song will enter the public domain in Europe in 2016, or 70 years after the death of Patty Hill (who died May 25, 1946). However, some believe that Happy Birthday may already be well within the public domain in the U.S.  For an extensive and thorough analysis of the history and copyright status of “Happy Birthday,” see the research paper by Robert Brauneis at SSRN (“Copyright and the World's Most Popular Song”).  

The Obama administration has taken a step towards its goal of ensuring public access to federally funded research.  In a policy memorandum released on February 22, 2013 (see "Increasing Access to the Results of Federally Funded Scientific Research"), the Office of Science and Technology Policy  has directed Federal agencies with more than $100M in R&D expenditures to develop plans to make the published results of federally funded research freely available to the public within one year of publication and requiring researchers to better account for and manage the digital data resulting from federally funded scientific research.  The memorandum is in part a response to a We the People petition signed by over 65,000 people requesting better access to taxpayer-funded research. The policy memorandum states that digitally formatted scientific data resulting from unclassified research supported wholly or in part by Federal funding should be stored and publicly accessible to search, retrieve, and analyze. For purposes of the memorandum, data is defined, consistent with OMB circular A-110, as the digital recorded factual material commonly accepted in the scientific community as necessary to validate research findings including data sets used to support scholarly publications, but does not include laboratory notebooks, preliminary analyses, drafts of scientific papers, plans for future research, peer review reports, communications with colleagues, or physical objects, such as laboratory specimens. Six-month Deadline to Provide a Plan Within 6 months from the issuance of the policy, each affected federal agency must provide a plan that provides for the following:

• a strategy for leveraging existing archives, where appropriate, and fostering public/private partnerships with scientific journals relevant to the agency’s research;

• a strategy for improving the public’s ability to locate and access digital data resulting from federally funded scientific research;

• an approach for optimizing search, archival, and dissemination features that encourages innovation in accessibility and interoperability, while ensuring long-term stewardship of the results of federally funded research;

• a plan for notifying awardees and other federally funded scientific researchers of their obligations (e.g., through guidance, conditions of awards, and/or regulatory changes);

• an agency strategy for measuring and, as necessary, enforcing compliance with its plan;

• identification of resources within the existing agency budget to implement the plan;

• a timeline for implementation; and

• identification of any special circumstances that prevent the agency from meeting any of the objectives set out in this memorandum, in whole or in part.

Further, each agency’s public access plan must, among other things, also:

• ensure that extramural researchers receiving Federal grants and contracts for scientific research and intramural researchers develop data management plans, as appropriate, describing how they will provide for long-term preservation of, and access to, scientific data in digital formats resulting from federally funded research, or explaining why long-term preservation and access cannot be justified; and

• allow the inclusion of appropriate costs for data management and access in proposals for Federal funding for scientific research.

Stay Tuned As this public access policy will affect university researchers and contract administrators, becoming and maintaining familiarity with the policy is important.  We will post periodic updates as more information becomes available about the policy and the various agency plans released for implementation of the policy.

At the Chronicle of Higher Education website, Paul Basken reports that new rules will be published in the Federal Register concerning corporate ties of researchers and required disclosures relating thereto. In a nutshell:

The final form of the changes falls short of some of the more aggressive regulations suggested by Dr. Collins and the NIH. In particular, the rules do not require universities to post online details of the specific financial conflicts involving their scientists. Instead, universities are required only to respond to individual requests for such information. And, despite the fact that the rule-making process was halted a year ago following revelations that a prominent psychiatrist had escaped NIH sanctions by moving to a new university, the final language does nothing new to specifically prevent such a maneuver.