NLRB Rejects Union for Northwestern Athletes: Business of Law

Northwestern University football players can’t form a union, the National Labor Relations Board ruled, overturning a March 2014 decision and ending the players’ bid to change the college sports landscape.

The ruling was surprising, according to Brian Paul, a labor attorney at Michael Best & Friedrich LLP in Chicago.

“What the NLRB has done is invite the group to come back if the landscape changes enough to warrant unionization,” Paul said in a phone interview. “The single school doesn’t have enough influence on how the FBS as a whole is operated,” he added, referring to the Football Bowl Subdivision, the highest level in the college game.

While the bid for college sports’ first labor union is dead, the question at the heart of the debate remains unanswered.

The NLRB on Monday chose not to rule on whether Northwestern’s scholarship football players are employees. The decision didn’t address whether athletes at another private school or a group from multiple schools would have success in another attempt to unionize.

“The NLRB has said: ‘Aim higher. Your single-school approach doesn’t work for us,’” Paul said.

The NLRB’s unanimous decision came 17 months after its regional director in Chicago ruled that Northwestern’s scholarship football players should be allowed to form a union.

The national office overturned that decision based on the belief that a union wouldn’t provide labor stability in college football’s current structure, because allowing one team to unionize would upset the balance of competition.

The NLRB said in the ruling that it opted not to assert jurisdiction. This allows the board the freedom to respond differently in the future, according to Paul Haagen, a professor of sports and contract law at the Duke University School of Law.

The ruling applies specifically to this Northwestern case, so it won’t affect future claims by scholarship athletes. Those scenarios “we need not and do not address at this time,” according to the NLRB.

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BP Wins Wholesale Gas Price Trial Against ARCO Franchisees

BP Plc defeated claims it cheated four ARCO and AM/PM franchisees in the western U.S., a victory that gives it a leg up in litigation with hundreds more.

A state court jury in Los Angeles found that BP didn’t overcharge the franchisees for gasoline. In a smaller win for the franchisees, the jury ruled that BP was liable for forcing them to buy allegedly defective retail software and awarded a total of less than $100,000 to all four plaintiffs.

BP still faces allegations by the larger group of franchisees suing in Los Angeles that it set wholesale prices in a dishonest and arbitrary manner. The group’s combined damages may amount to hundreds of millions of dollars, its lawyers have said.

A BP spokesman, Geoff Morrell, said in a statement the company is pleased by the verdict. “We have always maintained that these claims have no merit,” he said.

The ARCO station operators accused BP of basing the wholesale price of gasoline on a formula that left no room for them to make a profit. They claimed that while competing discount gasoline retailers have an assumed gross-profit margin of 21.6 cents a gallon, BP franchisees must get by on an 8 cent margin.

Brian Brosnahan, an attorney with Kasowitz, Benson Torres & Friedman LLP, said the plaintiffs will pursue an appeal of the Aug. 14 verdict on the gas overcharging claims.

In 2013, London-based BP sold its refinery in Carson, California, and its ARCO stations in the southwestern U.S. to Tesoro Corp. for $2.5 billion.

The case is Hogan v. BP West Coast Products LLC, BC460880, Los Angeles County Superior Court.

Comings and Goings

Ropes & Gray has hired partners Heather Egan Sussman and Rohan Massey. Sussman, who is joining in Boston, and Massey, who is joining in London, previously practiced at McDermott Will & Emery LLP. The two lawyers, along with Doug Meal, will lead the firm’s privacy and data-security practice.

K&L Gates LLP has added Brandon McCarthy as a partner in the government enforcement practice in Dallas. McCarthy was an assistant U.S. attorney in Dallas for almost eight years, most recently in the fraud/white-collar crime section of the office.

Michael Sullivan has joined the San Francisco office of Orrick, Herrington & Sutcliffe LLP as a partner in the technology companies group. Sullivan, who previously practiced at Pillsbury Winthrop Shaw Pittman LLP, focuses on emerging growth companies and their investors.

Reed Smith LLP has expanded its real estate practice with the addition of Joseph Sarcinella as a partner in New York. Sarcinella, previously a partner at Thompson & Knight LLP, focuses on real estate finance transactions.

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