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Collegiate & Professional Sports Law Blog

New Class Action Alleges NCAA and 11 Conferences Formed ‘“Monopsony’” Over College Athletes

Three former college athletes are the latest to file a class action lawsuit against the National Collegiate Athletic Association (NCAA), asserting the NCAA and its 11 conferences collectively share “monopsony” over college athletes.

Kenyata Johnson, Barry Brunetti, and D.J. Stephens filed their class action complaint  in the U.S. District Court for the Northern District of California just three months after the landmark ruling from U.S. District Judge Claudia Wilken. Judge Wilken ruled in favor of a group of college student-athletes led by retired professional basketball player Ed O’Bannon against the NCAA. In OBannon v. NCAA, Judge Wilken struck down NCAA regulations prohibiting student-athletes from receiving compensation beyond scholarships for use of their names, images and likenesses.

The new class action accuses the NCAA and its members of unlawfully agreeing that no college will pay an athlete any amount that exceeds the value of an athletic scholarship. This agreement, the plaintiffs argue, violates the Sherman Act and limits the value of athletic scholarships at an amount substantially below what an athlete could earn for his or her services in a competitive market. As a result, the arbitrary cap imposes a lower standard of living and significant hardships on college athletes.

They assert that because the NCAA and its members are the “only game in town” in  providing compensation to college athletes, such a restriction creates an unlawful restraint of trade in (1) the market for NCAA Division 1 football player services; and (2) the market for NCAA Division 1 men’s basketball player services. Plaintiffs conclude that through these restraints, the NCAA and its members have created a “take it or leave it market” for college athletes.

“In enacting the challenged restraint, the NCAA and its members have ultimate power to artificially depress compensation to college athletes. If a top-tier athlete doesn’t like it, he or she essentially has no reasonably close alternative. That is the nature of a monopsony,” identifies the complaint.

Other allegations in the complaint against the NCAA include:

  • The cap is simply a “cost containment mechanism” to preserve more of the benefits of a lucrative enterprise for the NCAA and its member institutions
  • Depriving consumers of the potential opportunity of seeing numerous players remain in the college system for longer periods of time

The plaintiffs’ complaint also offers an alternative to the NCAA’s current regulations – to create an open market with no restriction on the amount of scholarship money a school can provide to an athlete. The plaintiffs contend such a change would allow NCAA member conferences to compete among themselves as to the financial aid terms that will be made available to college athletes.

Michigan Bill Would Bar Student-Athlete Unionization

With a National Labor Relations Board decision on whether football players at Northwestern may proceed with their unionization efforts looming, Michigan is considering a bill that would prevent student-athletes from similarly attempting to unionize.

The bill, sponsored by Rep. Al Pscholka, would prevent student-athletes at Michigan’s public universities from exercising collective bargaining rights based on their participation in a university sports team. It states, “a student participating in intercollegiate athletics on behalf of a public university in [Michigan]…is not a public employee entitled to representation or collective bargaining rights….”

Michigan has seven public universities competing at the Division I level. The bill would bar student-athletes at these universities from engaging in unionization efforts similar to the ones undertaken by the football players at Northwestern.

While none of the seven universities has faced a union organizing campaign from any of its student-athletes, prompting one opponent of the bill, Rep. Andy Shor, to describe the bill as a solution to a nonexistent problem.

“I don’t understand the tremendous rush on this,” Shor said. “We’re taking an action that addresses something that’s happening in Evanston, Illinois.”

However, if the Board finds in favor of the football players at Northwestern, universities across the country likely will face similar unionization efforts from other student-athletes. Michigan’s may be an attempt to get out in front of such efforts. 

According to Ramogi Huma, the president of the organization spearheading the unionization campaign at Northwestern, the College Athletes Players Association, Michigan’s bill is “backhanded confirmation that student-athletes are state employees by including them in a list of workers who can’t bargain effectively.” However, the bill does not categorize student-athletes as employees and, indeed, it states that “individuals whose position does not have sufficient indicia of an employer-employee relationship” are also prevented under the bill from engaging in collective bargaining.

Huma also warned that if the bill passes, it would have a negative impact on the ability of Michigan’s public universities to recruit student-athletes because prospective student-athletes interested in being part of a union could elect instead to go to either private universities in Michigan or universities in states with no restrictions on their unionization efforts.

Thus far, none of the seven Division I public universities in Michigan have commented publicly on the bill. However, the bill likely is being closely followed by them as well as public universities in other states and major athletic conferences, such as the Big Ten, home to Northwestern, Michigan, Michigan State, and Ohio State.

Turf War: Female Soccer Stars Sue FIFA and the Canadian Soccer Association

More than 60 of the top female soccer players, including U.S. stars Abby Wambach and Alex Morgan, have brought a lawsuit against the Canadian Soccer Association and FIFA, the international governing body of football, asserting that the organizations’ decision to play the 2015 Women’s World Cup on artificial turf constitutes gender discrimination.  A men’s World Cup has never been played on artificial turf and the men will play the 2018 and 2022 World Cup tournaments on grass.

According to the players’ filing with the Human Rights Tribunal of Ontario in Toronto, World Cup organizers are violating Section 1 of Ontario’s Human Rights Code.  The Code states, “every person has a right to equal treatment with respect to services, goods and facilities, without discrimination.”  The Code is a broad civil rights law that prohibits discrimination on the basis of gender and has been interpreted to protect athletes from discrimination.

The players argue that artificial turf “fundamentally alters” the way soccer is played and exposes them to increased risk of serious injury. Morgan had commented that she decided to become involved in the lawsuit for health reasons. “Not only are they long lasting injuries, but there are long-term effects of playing on turf,” the forward for the U.S. national team says. “The achiness, taking longer to recover than on natural grass, the tendons and ligaments are, for me at least, I feel more sore after turf. It takes longer to recover from a turf field than natural grass.”

Artificial turf has been blamed for increased rates of sprained ankles, concussions, and turf burns. Moreover, a NBC Nightly News report presented evidence that the black beads embedded in artificial turf, called crumb rubber, may cause cancer.

The Women’s World Cup is seven months away and FIFA appears unmoved. The players have petitioned the Tribunal to expedite its review process, which typically takes at least one year.

The national and international debate on gender discrimination in athletics continues.  If international soccer stars Lionel Messi and Cristiano Ronaldo threatened to join a lawsuit against FIFA over artificial turf, it is hard to imagine that FIFA, an organization projected to bring in $5 billion in revenue over the next four years, would not immediately spend the estimated $3 million it would cost to replace the turf fields with natural grass.

NLRB Student-Athlete Decision Could Be Issued Soon

As National Labor Relations Board Member Nancy Schiffer’s term ends on December 16, 2014, the expectation is that a flurry of important NLRB decisions will be issued before then, including on whether scholarship student-athletes are employees under the NLRA (Northwestern University, Case 13-RC-121359). This expectation is based on what occurred prior to the expiration of former-NLRB Member Brian Hayes’s term on December 16, 2012. In the six days preceding his departure, the Board issued at least seven notable decisions. See “Expect NLRB Whirlwind before Schiffer Leaves”.

Most commentators, including this one, believe the NLRB will decide the student-athletes are employees covered by the National Labor Relations Act.

Former Soccer Player Seeks Minimum Wage for Student-Athletes, Sues NCAA, 352 Division I Schools

A former collegiate soccer player has claimed in a class action lawsuit filed on behalf of herself and all student-athletes who have participated recently in Division I women’s and men’s sports that the NCAA and Division I colleges and universities are violating the minimum wage provisions of the Fair Labor Standards Act (the “FLSA”). Samantha Sackos, a former women’s soccer player for the University of Houston, contends that she and other student-athletes are entitled to at least the federal minimum wage for their athletic time commitments.

Student-athletes are “employees” of their universities under the FLSA, Sackos contends, and student-athletes at Division I schools are comparable to students who participate in work-study programs.  She claims that they, too, perform non-academic functions for no academic credit, are supervised by full-time college staff in the normal course of staff duties, and confer benefits on their college.  But, unlike work-study participants, student-athletes are not paid for the time they spend performing their duties, the suit alleges.

Although Sackos attended only one Division I school, all 352 Division I institutions are named as defendants in the lawsuit, along with the NCAA.  Sackos accuses the NCAA and the schools of conspiring to violate the FLSA because the NCAA’s bylaws “prohibit recognition of student athletes as temporary employees under the FLSA and the lawful payment of modest wages to student athletes ….”  Sackos also alleges that the NCAA compels member schools to comply “under the threat of competition and financial penalties.”  The member schools, in turn, adopt the NCAA’s bylaws and its bylaw enforcement program.

The suit was filed in federal court in Indianapolis, where the NCAA is headquartered.

The suit raises related questions, as well. For example:  If student-athletes are “employees,” who is their “employer” – the NCAA, the college, and/or the college athletic department?  It also remains to be seen whether Sackos may proceed with a lawsuit against all 352 Division I schools, or only the one she attended .  Similarly, schools outside of Indiana who are named as defendants may argue that the court lacks jurisdiction over them.

The suit follows a recent attempt by football players at Northwestern University to unionize under the National Labor Relations Act.  An NLRB Regional Director in Chicago found some of the players were employees and could form a union.  That case is currently on review before the NLRB in Washington.  Absent Congressional action or a Supreme Court decision providing uniformity in the treatment of college student athletes, the asserted  “employee” status of these individuals  and the applicability of workplace laws to their college sports activity  likely will continue to be the subject of litigation.

Big Ten Announces Scholarship Guarantee As Major Conferences Gain Power from NCAA

It didn’t taken long for the Power Five conferences to take advantage of recently granted autonomy to set new rules for member universities, and the pace of change appears to be gaining speed.

In August, the NCAA board of directors voted to give the Power Five – the Atlantic Coast Conference, Big Ten, Big 12, Pac-12, and Southeastern Conference – greater autonomy to adopt new policies designed to improve the student-athlete experience.  This week, the Big Ten became the first conference to announce that all of its member institutions will guarantee scholarships for the duration of an athlete’s enrollment. The move follows news  in late September,  that the University of South Carolina would become the first school in the SEC to guarantee four-year scholarships for student athletes.

As a result, Big Ten student-athletes will receive guaranteed scholarships that will not be reduced or cancelled as long as the athlete “remains a member in good standing with the community, the university, and the athletics department,” the Big Ten said in a statement.  An athlete who leaves a university will now have the opportunity to return and complete an undergraduate degree with the guaranteed scholarship.

This is a major change from prior policies that allowed only single-year scholarships with no promise that the scholarships would continue  in the future.  The development  also represents a major benefit for athletes who leave college early to play professional sports or for other reasons, and who return later to finish earning their degrees.

The news from the Big Ten is only the latest of many moves by the big conferences to take advantage of increased autonomy and implement changes benefitting athletes.  The NCAA and universities are focused on increasing the value of scholarships to cover the full cost of education, increasing insurance coverage and decreasing medical expenses, and improving responses to concussions and other serious injuries, among other things.  The Power Five appear poised to continue to implement  non-controversial improvements quickly.  However, we should not expect the same rapid, groundbreaking changes regarding more challenging issues, such as  student-athlete compensation or student-athlete contact with agents.

 

NFL and NFLPA Finalize Amended Substance Abuse Policies

After years of intensely contentious negotiations, the NFL and NFL Players Association have reached an agreement on the league’s performance enhancing substance policy and substance abuse policy.

Both policies were unanimously approved by the 32 NFL player representatives weeks ago, but were held up by final negotiations. The NFL and the NFLPA have been attempting to address these policies since the two sides approved the latest collective bargaining agreement in 2011. At that time, they had agreed in principle on a new drug testing policy, but disputed issues, such as human growth hormone (HGH) testing and the timing and manner of player testing, held up the process for more than three years. Since 2011, the NFL has continued to utilize the policies approved in 2006 and amended in 2010.

The most significant modification is that players, as expected, are subject to blood tests for HGH for the first time in NFL history. According to the NFL and the NFLPA, testing will begin “within the next few weeks” and will be “fully implemented” this season. In early 2013, Major League Baseball’s drug testing program was modified to subject players to unannounced in-season blood tests for HGH. Accordingly, it may be instructive to consider how Major League Baseball has implemented its program.

In addition, the new policies will apply retroactively to players who are currently suspended for violating the previous policies. As a result of the new policies and reduced penalties for certain violations, a number of suspended players already have been reinstated or have had their current suspensions reduced.

As for the applicable penalties for violations of the performance enhancing drug policy, the following suspensions will apply:

FIRST VIOLATION                                 SUSPENSION WITHOUT PAY FOR UP TO SIX GAMES                    
-Use of diuretic or masking agent                                                   -Two game suspension without pay

-Use of steroids, stimulants, HGH or other banned substance    -Four game suspension without pay

-Attempting to manipulate a test result                                          -Six game suspension without pay

SECOND VIOLATION                                                               TEN GAME SUSPENSION-Without Pay

THIRD VIOLATION                                                            MINIMUM  TWO YEAR SUSPENSION-Without Pay

Stimulant Use in Off-Season                              NO SUSPENSION-Referral To Substance Abuse Program

Stimulant Use in Season                                                                       Four Game Suspension-Without Pay

The substance abuse policy will modify applicable suspensions and more than double the threshold for testing positive for marijuana. The higher threshold may have been intended to forestall players from arguing that the positive test was the result of second-hand smoke. Moreover, players will avoid suspension for marijuana use until after a fourth failed drug test under the new threshold. The policy also includes enhanced discipline for DUI arrests. The new substance policy will provide the following penalties:

First Violation Referred to Substance Abuse Program
Second Violation Two-week salary fine
Third Violation Four-week salary fine
Fourth Violation Four-game suspension
Fifth Violation Ten-game suspension
Sixth Violation One-year suspension
DUI (First Violation) Two-game suspension
DUI (Second Violation) Minimum eight-game suspension

 

Importantly, the NFL will not have unilateral control over the appeals process for positive tests under either policy. Rather, appeals for positive test violations will be heard by an independent arbitrator. The NFL and NFLPA jointly will select and retain up to five arbitrators. In light of current debate regarding the Commissioner’s power and the NFL’s investigative procedures, this is a noteworthy step that may lead the players union to seek an independent appeals process in other circumstances.

However, the Commissioner will retain his disciplinary authority for violations unrelated to positive tests, including violations of law. Such violations still will be heard by the existing CBA Appeals Panel and the right of appeal will be “based on due process issues or a claim of disparate punishment.”

It will be important for players, agents and organizations to educate themselves as to how the policies will be implemented and enforced. Teams should ensure that players are informed of the applicable penalties and their rights under the modified procedures.

Ray Rice Saga: Not Just About The Punishment Fitting the Crime

The disturbing domestic violence incident involving former Baltimore Ravens running back Ray Rice and his wife may raise issues for professional football’s labor relations as well as Rice’s future career as a player.

Rice was seen in a hotel video dragging his wife out of an elevator.  National Football League Commissioner Roger Goodell investigated and suspended Rice for two games. Public outrage continued to mount, especially after a newly released  hotel video showing Rice punching Janay inside the elevator was released. Commissioner Goodell changed Rice’s punishment and increased the length of the punishment to an indefinite suspension.

Rice is covered by a collective bargaining agreement between the league and the National Football League Players Association (NFLPA) and, despite the seriousness of the incident, the question arises whether the “rules” bar Commissioner Goodell from having increased the initial sanction against Rice for reasons of “double jeopardy.” That argument, among other theories, almost certainly will be raised by the NFL Players Association (NFLPA) at the hearing that will take place in connection with the appeal the NFLPA filed challenging Rice’s indefinite suspension

The NFLPA represents NFL players under a collective bargaining agreement (CBA) with the League.  Like most CBAs, the NFL CBA contains a provision under which employees (players) and/or the union may file a “grievance” involving a dispute about how a specific provision of the CBA has been interpreted or applied by the NFL.  Unresolved grievances are referred to arbitration in front of a neutral arbitrator.

Unlike almost all other grievance processes contained in CBAs, however, the NFL CBA grievance procedure does not apply to fines or suspensions (including Ray Rice’s) levied against players.    Instead, a “hearing officer,” appointed by the Commissioner after “consultation” with the Executive Director of the NFLPA, hears the case and renders a written decision which is “full, final and complete disposition of the dispute” and binding.

Enter the potential concept of “double jeopardy.”  In criminal cases, it prevents an individual from being tried twice for the same crime after a conviction or acquittal has occurred.  The same concept also can be applied in the workplace. Double jeopardy as a workplace concept has more than one meaning or application.  First, once an employee has been disciplined for wrongdoing, he or she may not be subject to discipline a second time for the same infraction.  Second, and most relevant to the Rice situation, the notion also disallows increasing the penalty for a violation after the discipline has been imposed.  In fact, double jeopardy can apply where a penalty is enlarged, even if the greater penalty is based on facts about which the employer was unaware when the original discipline was imposed.

In its press release announcing the filing of the appeal on Rice’s behalf, the NFLPA said “[u]nder governing labor law, an employee cannot be punished twice for the same action when all of the relevant facts were available to the employer at the time of the first punishment.”)

Although the concept of double jeopardy is well-established in grievance arbitration, it is not a given that it will be recognized by the hearing officer under the procedure contained in the NFL CBA.  And, even if it is, the double jeopardy rules are not without exception.  For example, assuming double jeopardy is raised by the NFLPA at the hearing, the hearing officer may be sympathetic to a counter-argument by the NFL that it was unaware of what actually occurred in the elevator until after the two-game suspension had been imposed, and therefore, it was appropriate to reconsider the earlier suspension decision.

 

 

 

California Bill Would Create New Sexual Assault Definition For College Campuses

Students on both public and private college campuses must get “affirmative consent” before engaging in sexual activity, according to a bill passed unanimously the California legislature. The bill awaits Governor Jerry Brown’s signature.

California Senate Bill 967, also known as the “yes means yes” law, makes clear that all colleges taking student financial aid funding from the state must agree that in the course of conducting investigations of campus sexual assaults, silence or a lack of resistance or consent given under the influence of alcohol and/or drugs does not equal consent to sexual activity. The bill states that “‘affirmative consent’ must be affirmative, conscious, voluntary and ongoing throughout a sexual activity and can be revoked at any time.” The proposed law also states that the existence of a dating relationship between the persons involved, or the fact of a past sexual relationship, should never by itself be assumed to be an indicator of consent.

The bill’s sponsor, Senator Kevin de Leon, D-Los Angeles, called the proposed new law a paradigm shift and stated, “It is very difficult to say no when you’re inebriated or someone slips something into your drink. If the Governor signs it, this will lead the entire country, the nation.” The “affirmative consent” standard established by the bill makes both parties responsible for ensuring in advance that a sexual act is desired. The bill shifts the burden away from requiring alleged victims to prove that they had clearly conveyed that they did not want to engage in sexual activity. Lack of protest or resistance does not mean consent, nor does silence.

“With this measure, we will lead the nation in bringing standards and protocols across the board so we can create an environment that’s healthy, that’s conducive for all students, not just for women, but for young men as well too, so young men can develop healthy patterns and boundaries as they age with the opposite sex,” de Leon said before the legislative vote.

While the proponents of the bill have convinced the California state legislature to support the measure, several critics of the proposed legislation have expressed strong opposition. National Coalition for Men spokesman Gordon Finley stated that the proposal will lead to “too many punitive situations for young men.”  Finley asserts that Governor Brown should not sign SB-967, saying, “This is nice for the accusers — false accusers as well as true accusers — but what about the due process rights of the accused.”

 

STRICTER HIGH SCHOOL STUDENT-ATHLETE TRANSFER RULES EXAMINED

While the NCAA appears to be loosening restrictions on student-athletes transferring between colleges, the governing body for New York public high school athletics is examining ways to make it more difficult for their student-athletes to transfer between high schools.

This fall, the 22-member executive committee of the New York State Public High School Athletic Association (“NYSPHSAA”) will examine whether to amend its rules governing transfer from public to private high schools.  The NYSPHSAA amendment will require a transferring student to sit out one year, similar to the current NCAA rules.

Recently, the NCAA’s Division I Board of Directors voted to grant autonomy to the five largest college football conferences (Big 12, Big Ten, Atlantic Coast Conference, PAC-12, and Southeast Conference).  These Big 5 power conferences, in effect, are being permitted to have more autonomy and  more control over how they govern themselves.  One thing the NCAA and the new Big 5 power conferences must address is the complex issue of student-athletes transferring between institutions.

NCAA transfer rules vary with the sport.  Generally, transferring student-athletes must sit out one year and spend a year in residence at the new school  before they can resume their collegiate career.   Athletes can apply for a family hardship waiver to be allowed to play immediately.  However, current transfer rules also permit schools to deny an athlete’s release from a scholarship, making it impossible to accept another scholarship from a different school.

The NCAA and the Big 5 power conferences want to streamline the transfer process and make it more equitable for transferring student-athletes and colleges.  One proposal would eliminate the hardship waiver, but it also would eliminate the condition that the players lose a year of their eligibility.

In contrast, the NYSPHSAA seems to be heading towards making it more onerous for transferring high school students to maintain their interscholastic eligibility.    Currently, a public high school student in New York may transfer, without penalty, to another public high school or a private high school within the same district with a corresponding change in residence of his or her parents.  The student is eligible to participate in interscholastic athletics upon starting regular attendance at that new school.

A New York student who transfers without a change in residence of his or her parents is ineligible to participate in interscholastic athletic contests.  However, if the student is transferring to a public or private school within the district where his or her parents reside, the student will be permitted a one-time waiver of the transfer rule.  In addition, the NYSPHSAA’s educational hardship waiver permits athletes to transfer from public to private schools to pursue an educational advantage.

The NYSPHSAA is considering eliminating the educational advantage exemption to the transfer rule and to require all student-athletes transferring from public to private schools to sit out one academic year.

Members of the NYSPHSAA executive committee point out that this is not solely a private school issue.  They note that there are many students transferring from one public school to another public school for academic advantage, such as to take certain advanced placement classes.

The issue of high school student-athlete transfers is not unique to New York.  Other states, including California, Florida, Michigan, New Jersey, are exploring ways to create equitable transfer policies for both students and schools.