Students May Unionize After All: NLRB Withdraws Proposed Rule

March 16, 2021
Firm Publication

The National Labor Relations Board (NLRB or Board) recently announced it was changing course on whether students should be considered employees and therefore can unionize. This change of course returns to previous Board precedent from case law that graduate students, and perhaps any students employed for pay, can be considered employees. This change of course also halts what many thought signaled the Board’s desire to answer this issue by rulemaking rather than through case precedent.

On March 15, the Board issued a notice withdrawing a proposed rulemaking from 2019 which many thought signaled the Board’s plan to adopt a rule regarding the status of students as employees under the National Labor Relations Act (NLRA). The result of this withdrawal is that the governing precedent returns to the decision in Columbia v. NLRB in which the Board held that not only graduate students but any students employed for pay, may be employees subject to collective bargaining under the NLRA.

Background

The issue of whether graduate students are employees for purposes of the NLRA has been frequently litigated before the NLRB. For the last 20 years, whether graduate students may organize, accordingly, has been determined by litigated case law, and, as a practical matter, the controlling precedent swung pendulum-like based on which political party controlled the White House, and hence NLRB appointments, at any point in time. New York University v. NLRB, 332 NLRB 1205 (2000) (graduate students are employees); Brown University v. NLRB, 342 NLRB 483 (2004) (graduate students are not employees); Columbia University v. NLRB, 364 NLRB 90 (2016) (Columbia University) (graduate students and undergraduate students are employees).

Seeking to overrule its decision in Columbia University, and to use its rulemaking authority to put more durable guidance in place, the NLRB issued in September 2019 a Notice of Proposed Rulemaking, proposing a regulation which would establish that students are not employees for purposes of the NLRA and therefore may not engage in collective bargaining activity. 84 Fed. Reg. 49691. Although an extended comment period on the proposed rule closed on December 30, 2019, the NLRB did not issue a final rule before President Biden taking office.

Current Action

The March 15 withdrawal notice gave the Board’s reason for withdrawal as its desire to “focus its time and resources on the adjudication of cases currently in progress.” With the withdrawal of the proposed rule, the NLRB appears to have abandoned plans to provide guidance through rulemaking and return to litigated precedent. This withdrawal also makes the Board’s ruling from 2016 in Columbia University as the currently binding precedent. Although the NLRB will have a majority of Republican-appointed members in place until July 2021, it is not expected that the NLRB will disrupt the decision in Columbia University.

Federal appellate courts, to which Board decisions can be appealed, to date have not substantively weighed in on the question of whether graduate students are employees for purposes of the NLRA. While courts typically give some level of deference to an agency interpreting its governing law, it will be interesting to see what appellate courts will do with this question, should it be presented, given the Board’s differing interpretations on this point in such a short period.

Takeaways for Higher Education Institutes

Colleges and universities can expect greater activity on campus by unions seeking to organize graduate (and possibly undergraduate) students who receive compensation for an activity that is or may be deemed to be work. Expect the NLRB at the regional and national levels to dismiss arguments that such students are not employees subject to the NLRA. Getting that question to a court for adjudication is not a simple or straightforward (or inexpensive) process, which is why the NLRB’s interpretation is so important.

At the same time, reaching an agreement with a graduate student union, once in place, can have problems of its own, as evidenced by the strike at Columbia University this week. University counsel should inform relevant clients of the change in approach by the NLRB so that they are aware and can bring questions and potential issues to counsel on a timely basis.

If you have any questions, please contact the authors.