An Administrative Law Judge with the National Labor Relations Board has held that football players at Northwestern University fall within the definition of “employees” under the NLRB Act. The ruling also held that they can be represented by the College Athlete Players Association (i.e. a union) and bargain for working conditions (i.e. hours, health benefits, and compensation, etc.). The ALJ found that the players were working far more hours at sports than academics, dominated by non-faculty, and have scholarships only if they participated in the sport. In the Judge’s view, that leads to the conclusion that the relationship was more economic than educational. The life lessons associated with teamwork and perseverance were incidental. The decision is likely to be appealed to the NLRB Board. For discussion of the implications of this ruling, see the Forbes article by Professor Groves at http://onforb.es/1eRfZsF, and one of his TV station interviews: http://stationcaster.com/stations/wgfx/media/mp3/Roger_Groves_with_WUZ-1395923422.mp3
Although the court concluded in Loving, et al. v. IRS, et al. that it may be wise as a policy matter to allow the IRS to regulate tax-return preparers more stringently, the court held firm to its traditional tools of statutory interpretation and ruled that Section 330 did not allow for such regulation. Section 330 authorizes the IRS to “regulate the practice of representatives of persons before the Department of the Treasury.” The IRS interpreted the statute to mean that it authorized the regulation of tax-return preparers. However, three independent tax-return preparers argued that the interpretation of the IRS exceeded the agency’s authority under the statute. The court decided to handle the issue of whether Section 330 gives the IRS authority to regulate tax-return preparers by employing all of the tools of statutory interpretation. These tools include text, structure, purpose, and legislative history.
First, the court found that the term “representatives” in the statute should not include tax-return preparers because a representative is traditionally someone who has the authority to bind others. Tax-return preparers cannot legally bind the taxpayer by acting on the taxpayer’s behalf. Second, the phrase “practice…before the Department of the Treasury” ordinarily refers to practice during an investigation, adversarial hearing, or other adjudicative proceeding, which is different from the process of filing a tax return. Next, the court considers the history of the statute. The original language of the statute enacted in 1884 would not encompass tax-return preparers. The statute specified the agency’s regulation of “agents, attorneys, or other persons representing claimants before his Department…otherwise competent to advise and assist such claimants in the presentation of their cases.” Furthermore, when Congress re-codified the statute, it made it clear that there was no substantive change. Therefore, the court held that the traditional tools of statutory interpretation rendered the IRS’s interpretation of Section 330 unreasonable and thus affirmed the judgment of the District Court.
By Ashley Ellerbe, JD,cum laude, from Florida Coastal School of Law, May 2013, , Practicing in Atlanta GA.