The General Counsel for the National Labor Relations Board (NLRB or Board), who has authority for setting prosecutorial policy for the NLRB, issued a General Counsel Memorandum (GC Memo) today, reversing the prior Board General Counsel’s position and asserting the employee status of certain student athletes at private educational institutions. Board General Counsel Jennifer Abruzzo conveyed her enforcement position in a memorandum to the Board’s Regional Directors. Because non-unionized employees have rights under the federal labor law, the immediate impact will be that the NLRB’s enforcement arm will be processing complaints related to allegations of adverse treatment of certain student athletes for all variety of internal complaints against private institutions.
One month has passed since the NCAA Board of Directors adopted emergency legislation permitting student-athletes to monetize their name, image and likeness (NIL) without violating the long-standing amateurism requirements of NCAA Bylaw 12. Specifically, the NCAA: (1) acknowledged that a state law/executive order regarding NIL supersedes NCAA rules; and (2) provided blanket NIL coverage to student-athletes located in states that do not have a state law/executive order in place. This major change in NCAA legislation is charting new pathways for how student-athletes must be monitored by their institutions to avoid ineligibility. The creation of an internal institutional policy is one way to help organize and manage this new process.
On June 21, 2021, in an opinion providing a very interesting historical overview of collegiate athletics going back to the 19th century and the founding of what is now the National Collegiate Athletic Association (NCAA), the U.S. Supreme Court released its decision in the NCAA v. Alston case. The Supreme Court affirmed the lower court’s injunction of NCAA rules that restrict education-related benefits to Division I basketball and bowl subdivision football student-athletes.
On August 8, the NCAA Division I Board of Directors adopted Proposals 2018-16_and_2018-17. These proposals, which arose out of the work of the Commission on College Basketball (and associated working groups), will necessitate new content in employment agreements with certain institutional personnel executed, extended or renewed on or after August 8, 2018.
The Supreme Court of the United States has denied both the NCAA’s and plaintiffs’ petitions for certiorari in the O’Bannon case. The parties had petitioned for review of the United States Court of Appeals for the Ninth Circuit’s decision issued in September 2015.
In that decision, the Ninth Circuit sided with the NCAA by vacating that portion of the District Court’s decision that would have required the NCAA to allow member institutions to pay limited deferred compensation to student-athletes for the use of their names, images and likenesses. At the same time, the Ninth Circuit also partly favored plaintiffs by upholding that part of the District Court’s ruling that enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance.
The Supreme Court’s denial, which signifies only that it declined to review the case and not that it agreed with the Ninth Circuit’s decision, means that the Ninth Circuit’s decision will stand unchanged.
On March 15, 2016, plaintiffs in the O’Bannon case sought U.S. Supreme Court review of the United States Court of Appeals for the Ninth Circuit’s decision issued in September 2015. In that decision, the Ninth Circuit sided with the NCAA by vacating that portion of the District Court’s ruling that would have required the NCAA to allow member institutions to pay limited deferred compensation to student-athletes for the use of their names, images and likenesses. The Ninth Circuit’s decision did not wholly favor the NCAA, however, as it also upheld that part of the District Court’s ruling that enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance. Reports indicate that the NCAA had earlier requested an extension of time to file its own petition to seek U.S. Supreme Court review and that it continues to consider this option following the O’Bannon plaintiffs’ request.
On January 26, U.S. District Judge John Lee of the United States District Court for the Northern District of Illinois granted preliminary approval of a new settlement of consolidated class action litigation involving the NCAA and former NCAA student athletes, in which the NCAA agreed to provide $70 million towards concussion research, testing and diagnosis. This settlement is largely a restatement of an earlier proposed settlement that had been rejected by the Court. As part of the original settlement, the NCAA agreed to invest in concussion research and education, and to fund physical examinations, neurological measurements, and neurocognitive assessments of individuals who in the past 50 years competed in contact sports for NCAA member institutions. All of these things were restated in the new settlement, with the addition of a greater emphasis on strengthening game time concussion protocols (“return-to-play” rules) and instruction to begin to notify those former student athletes eligible for neurological testing and assessment. Notably, neither the prior proposed settlement nor the approved settlement shields NCAA member institutions or the NCAA itself from current or future concussion lawsuits. Unlike the NFL concussion settlements in which the NFL directly compensated injured plaintiffs, the money paid by the NCAA goes straight to funding the research, education, prevention and testing discussed above. As a result, student athletes retain the ability to sue the NCAA or their institutions on grounds relating to concussion diagnosis and/or treatment, or lack thereof. In fact, the awareness initiatives funded by the settlement may increase the likelihood of claims, at least in the short run. Relatedly, about one week prior to the announcement of the approved settlement, the “Power Five” NCAA conferences proactively voted to give team trainers and physicians the “unchallengeable” authority to decide whether and when a student athlete should return to competition. This action, while not literally required by the settlement, certainly was a move toward alignment with developing best practices, and offers the potential for prospective liability protection.
Last week, a three-judge panel for the United States Court of Appeals for the Ninth Circuit voted 2-1 to deny the O’Bannon plaintiffs’ petition for a rehearing en banc of the Ninth Circuit’s September 30, 2015 decision on the NCAA’s appeal of the District Court’s 2014 decision.On appeal, the Ninth Circuit had upheld that part of the District Court’s ruling which enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance, but disagreed with that part of the District Court’s decision which would have required the NCAA to permit member institutions to pay deferred compensation to student-athletes in an amount up to $5,000 per year for the use of their names, images and likenesses.While the parties’ next steps in the case are presently unknown, both the O’Bannon plaintiffs and the NCAA could potentially seek U.S. Supreme Court review of the Ninth Circuit’s decision.
The United States Court of Appeals for the Ninth Circuit issued its highly anticipated decision in the O’Bannon case on September 30, 2015. This case was an appeal of the United States District Court for the Northern District of California’s decision finding that certain NCAA rules were an unlawful restraint of trade in violation of federal antitrust law. Specifically, the District Court issued a permanent injunction prohibiting the NCAA from enforcing rules regarding scholarship caps, and requiring the NCAA to allow member schools to pay deferred compensation to certain student-athletes of up to $5,000 per year of eligibility to compensate them for revenues generated from the use of their names, images and likenesses. The Court of Appeals affirmed the portion of the District Court’s decision regarding scholarship caps and vacated the portion pertaining to deferred compensation. In reaching its decision, the Court of Appeals found that while the NCAA rules in question were procompetitive, they were not exempt from antitrust scrutiny, and were subject to antitrust law’s “Rule of Reason” test. Using this test, the Court of Appeals agreed with the District Court that the plaintiffs had demonstrated that the NCAA’s amateurism rules had an anticompetitive effect on the college education market. The analysis then turned to the procompetitive justifications for the amateurism rules posited by the NCAA. The Court of Appeals accepted two of the NCAA’s four proffered justifications as identified by the District Court: “integrating academics with athletics” and “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism.” The Court of Appeals next observed that not all of the NCAA’s compensation rules that restrict the market are necessary to preserve the “character” of collegiate athletics, and moved to consideration of whether there were “substantially less restrictive alternatives” to the NCAA’s compensation rules at issue in this case. The Court of Appeals agreed with the District Court that permitting institutions to set the grant-in-aid cap at student-athletes’ full cost of attendance was a less restrictive alternative to the NCAA’s current restrictions on compensation. In so doing, the Court of Appeals observed that the NCAA’s current rule “has no relation whatsoever to the procompetitive purposes of the NCAA: by the NCAA’s own standards, student-athletes remain amateurs as long as any money paid to them goes to cover legitimate educational expenses.” However, the Court of Appeals disagreed with the District Court regarding the payment of compensation to student-athletes for the use of their names, images and likenesses. According to the Court of Appeals, when the District Court found “that paying student-athletes would promote amateurism as effectively as not paying them,” the District Court “ignored that not paying student-athletes is precisely what makes them amateurs.” (Emphasis in original). The Court of Appeals continued:
The difference between offering student-athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor; it is a quantum leap. Once that line is crossed, we see no basis for returning to a rule of amateurism and no defined stopping point…
To summarize, the Court of Appeals’ decision permits the offering of grants-in-aid up to the full cost of attendance (which, notably, had already been approved by the so-called “autonomy conferences” and was scheduled to take effect on August 1, 2015), but continues to permit the NCAA to enforce its rules prohibiting (among other things) the payment of deferred compensation to student-athletes in the form contemplated by the District Court. At this point, either party could seek review of the decision by the full Court of Appeals (as this decision was rendered by a three judge panel) or seek to appeal to the U.S. Supreme Court. The Court of Appeals’ decision is important in that it makes clear that the NCAA’s rules are not exempt from scrutiny under antitrust law, and specifically a “Rule of Reason” analysis. However, the decision regarding deferred compensation signifies a potentially important victory for the NCAA’s tradition and principles of amateurism, and may prove beneficial to the NCAA in its defense of Jenkins v. NCAA and other similar lawsuits. Elizabeth D’Agostino, a 2015 graduate of Albany Law School who is awaiting admission to the New York State bar, contributed to this blog post.
On September 30, 2015, the United States Court of Appeals for the Ninth Circuit issued its highly anticipated opinion on the NCAA’s appeal of the District Court’s decision in the O’Bannon case (a summary of the District Court’s decision is available here). After a lengthy discussion in which the Ninth Circuit ruled that the NCAA’s compensation rules are subject to scrutiny under antitrust laws, the Ninth Circuit affirmed in part and reversed in part the District Court’s decision. The Ninth Circuit upheld that part of the District Court’s ruling which enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance. The Ninth Circuit reasoned that this constituted a substantially less restrictive alternative to the NCAA’s current compensation rules because this would have virtually no impact on amateurism. The Ninth Circuit disagreed, however, with that part of the District Court’s decision which would have required the NCAA to permit member institutions to pay deferred compensation to student-athletes in an amount up to $5,000 per year for the use of their names, images and likenesses. The Ninth Circuit was particularly critical of the District Court’s decision here, noting that the District Court ignored the fact that not compensating student-athletes is precisely what renders them amateurs. As a result of the Ninth Circuit’s ruling, member institutions may provide FBS football and Division I basketball recruits with grants-in-aid up to the full cost of attendance, but remain prohibited by NCAA rules from providing the $5,000 per year deferred compensation contemplated by the District Court’s decision. A more detailed summary of the Ninth Circuit’s decision will be published on Bond’s Higher Education Law Report in the coming days.
In a long-awaited decision issued on August 17, 2015, the five-member National Labor Relations Board (“Board”) unanimously shut down an attempt by Northwestern University’s scholarship football players to become the first group of college athletes to form a labor union. This Board holding vacates the direction of election issued by an NLRB Regional Director in March 2014 and dismisses the representation petition filed by the College Athletes Players Association (“CAPA”), but does not address the fundamental issue of whether the players are “employees” under the National Labor Relations Act (“Act”). Instead of deciding this issue, the Board declined to assert jurisdiction over this case based on its conclusion that it “would not promote stability in labor relations” and therefore would not effectuate the policies of the Act. The Board noted that it had never been asked to assert jurisdiction in a case involving college athletes, nor had there ever been a petition for representation of a unit of a single college team, or even a group of college teams. The Board also pointed out that the players in this case did not “fit into any analytical framework” the Board had used in other cases involving college students (such as graduate student assistants or student janitors and cafeteria workers) because this case involved student athletes who receive scholarships to participate in what traditionally has been regarded as an extracurricular activity. The Board also distinguished these scholarship players from professional athletes, because the scholarship players are required to be enrolled full time as students and meet various academic requirements. The Board further observed that bargaining units in professional sports have never been limited to a single team’s players – they have always included the players of all teams in the entire league. Therefore, the Board concluded that there was no precedent that required it to assert jurisdiction, and that it was free to exercise its discretion to decline jurisdiction over this case. In justifying its decision to decline jurisdiction, the Board explained that Northwestern is a member of the National Collegiate Athletic Association (“NCAA”), which has a “substantial degree of control over the operations of individual member teams, including many of the terms and conditions under which the scholarship players (as well as walk-on players) practice and play the game.” Under these circumstances, the Board determined that its assertion of jurisdiction over only Northwestern and its scholarship football players would not promote stability in labor relations across the NCAA. The Board further explained that Northwestern competes in the NCAA Football Bowl Subdivision (“FBS”), where 108 of the 125 member schools are public institutions that are not covered by the Act. As a result, the Board does not have jurisdiction over the vast majority of the FBS teams. In fact, the Board pointed out that because Northwestern is the only private school in the 14-member Big Ten Conference, it “cannot assert jurisdiction over any of Northwestern’s primary competitors.” The Board cited this as an additional reason why its assertion of jurisdiction over only Northwestern and its scholarship football players would not promote stability and uniformity in labor relations. Although the Board’s exercise in restraint in this decision comes as somewhat of a surprise given this Board’s activism in expanding the reach of the Act, the Board made clear that its decision does not “preclude a reconsideration of this issue in the future,” and should be interpreted narrowly. In fact, the Board seemingly opened the door for consideration of a broader proposed bargaining unit than scholarship football players at one university by stating that its decision is not intended to “address what the Board’s approach might be to a petition for all FBS scholarship football players (or at least those at private colleges and universities).” So, the landscape of collegiate athletics will remain the same for now, but this may not be the last unionizing effort of student athletes that we see.
On July 31, 2015, the United States Court of Appeals for the Ninth Circuit granted the NCAA’s request to stay the injunctions ordered by the District Court in the O’Bannon v. NCAA case. In August 2014, the District Court enjoined the NCAA from enforcing its rules that prohibited member schools and conferences from offering FBS football or Division I basketball recruits a limited share of the revenues generated from the use of their names, images, and likenesses and from offering to deposit a limited share of licensing revenue in trust for such student-athletes. As a result of the stay, the NCAA’s current rules may continue to be enforced until such time as the Ninth Circuit rules on the NCAA’s appeal of the District Court’s decision.