NLRB’s Decision Roadblocks Union Effort – What’s Next for Student-Athletes?

After holding the potential “employee” status of Northwestern University’s grant-in-aid scholarship football players in abeyance for 16 months, the National Labor Relations Board’s decision not to assert jurisdiction left the parties still waiting for a “real” decision from the Board on the merits of whether college football players may someday be considered “employees” who can unionize under the National Labor Relations Act. The Board dismissed the representation petition filed by the College Athletes Players Association and declared “it would not promote stability in labor relations” if the football players from only one privately operated school had the ability to unionize, while many others who played for state-run schools that were not subject to NLRB jurisdiction, did not.

The ballots cast by the Northwestern football players and impounded by the Board will never be opened and counted to determine if the players had voted for or against union representation.

The Board’s refusal to act on the legal issue placed before it successfully avoided a formal answer to the question of whether the scholarship athletes are employees capable of forming a union that may be certified under federal labor law. The Board’s decision creates a roadblock on the path toward student-athlete unionization but it may not be permanent.

Does the student-athlete effort to unionize end at Northwestern?

According to Ramogi Huma, lead organizer of the Northwestern effort and President of the College Athletes Players Association, the effort to unionize student-athletes will continue. Huma stated, “This decision does not set a precedent. We still have an opportunity to unionize college sports.” Huma’s comments echo the language from the Board’s unanimous opinion.

The Board acknowledged its decision would not preclude a reconsideration of the issue regarding student-athletes as statutory employees.

Eschewing specific guidance or examples, the Board asserted that changed circumstances relating to Northwestern’s players or FBS (Football Bowl Subdivision) football could result in future action. It also contrasted Northwestern with its prior decisions in cases involving professional sports, where it was “able to regulate all, or at least most, of the teams in the relevant league or association.” The Board stated that it would be unable to promote stability in labor relations in a league or association in which only one team was attempting to organize and seek Board involvement. Clearly, the Board’s decision left open the distinct possibility of future student-athlete representation petitions being filed on behalf of all FBS football players or those playing at private colleges and universities.

Commentators have suggested that more positive results for student-athletes may be achieved through specific litigation in the federal courts. As former Board Chairman William Gould asserted when asked about the Board’s decision,

“The action is going to shift to anti-trust.”

He refers to a pending class action anti-trust claim that seeks injunctive relief to end all NCAA restrictions on student-athlete compensation. Attorney Jeffrey Kessler, who filed the claim said, “The anti-trust cases are really…the only legal road that players have to try to vindicate their rights.”

Gould acknowledged the impediment created by the Board, concluding, “The Northwestern decision is a major setback for college athletes. But this is just the beginning of this sort of litigation.”

NLRB Declines to Exercise Jurisdiction Over Student-Athletes’ Attempt to Unionize – For Now

Concluding that its assertion of jurisdiction “would not serve to promote stability in labor relations,” the National Labor Relations Board has declined to exercise authority over the College Athletes Players Association’s (CAPA’s) petition to represent scholarship football players at Northwestern University. Northwestern University, 362 NLRB No. 167 (Aug. 17, 2015). Without deciding if the players meet the statutory definition of “employee” under the National Labor Relations Act, the unanimous Board stated “it would not effectuate the policies of the Act to assert jurisdiction” here. However, the Board expressly left open the possibility it would assert jurisdiction “in another case involving grant-in-aid scholarship players (or other types of scholarship athletes).”

The Board’s conclusion, it said, reflected the reality that colleges and universities playing intercollegiate athletics band together to enact and enforce common rules for recruiting, practicing and competition by means of the National Collegiate Athletic Association (NCAA) and conferences. “As a result,” the agency reasoned, “labor issues directly involving only an individual team and its players would also affect the NCAA, the Big Ten, and other member institutions. Many terms applied to one team therefore would likely have ramifications for other teams. Consequently, ‘it would be difficult to imagine any degree of stability in labor relations’ if we were to assert jurisdiction in this single-team case.”

The Board also recognized the difficulty resulting from the fact that 108 of the 125 colleges and universities playing in the NCAA Division 1 Football Bowl Subdivision (FBS) are state-run institutions. Therefore, “the Board cannot assert jurisdiction over the vast majority of FBS teams because they are not operated by ‘employers’ within the meaning of…the Act.” Indeed, in the Big Ten Conference, Northwestern is the only private institution. These facts distinguished the Northwestern case from those involving professional sports leagues, the NLRB said, noting that “in all of our past cases involving professional sports, the Board was able to regulate all, or at least most, of the teams in the relevant league or association.”

The Board stressed the “novel and unique circumstances” of this matter.

It had never before been asked to assert jurisdiction in a case involving college athletes or football players. Neither had a petition for representation for a single college team unit or a group of college teams ever been filed or considered by the Board previously. Rejecting a potential analogy to graduate student assistants or student janitorial workers and cafeteria workers, the Board ruled the Northwestern football players are students as well as athletes who receive a scholarship to participate in an extracurricular activity. Northwestern players were different from other determinations in prior Board decisions involving students. Whether these student-athletes were employees under the NLRA was hardly free from doubt.

Despite the broad underpinnings of its ruling, the Board did not foreclose applying different standards later. For example, the Board noted its decision did “not 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).” (Emphasis added.)

Thus, the Board’s explanation that it was declining jurisdiction because the union’s petition did not cover the entire FBS suggests it may be open to the possibility of countenancing a petition covering players at all private institutions in the FBS.

Union proponent and former Northwestern quarterback Kain Colter tried to justify his organizational attempts despite the Board’s decision. He stated, “We are obviously disappointed. Still the unionization effort has already helped players with additional stipends, guaranteed scholarship and protocols to protect players who suffer concussions.” This is paradoxical, since the Board strongly suggested that improving treatment of NCAA scholarship players played a part in its decision to decline jurisdiction.

The Board’s decision will make it difficult for CAPA or another labor organization to organize scholarship football players at FBS schools. Some leagues have few private institutions, if any. Even in leagues with many private institutions, those schools are still in the minority, and so “labor stability” would not offer a firm rationale for Board jurisdiction. The Board may take jurisdiction in other sports, at least where private institutions predominate.

Further, the Board’s decision does not mean it will not take jurisdiction for other purposes, such as to remedy unfair labor practices. It cautioned: “. . . we are unwilling to find that a labor dispute involving an FBS football team would not have a ‘sufficiently substantial’ effect on commerce to warrant declining to assert jurisdiction.”

The Northwestern University decision is limited by its terms, and may afford school athletic programs only passing protection. The current NLRB may yet seek to tackle college and university sports for organized labor. The game is a long way from over.

NLRB Declines Jurisdiction In Northwestern Case

The National Labor Relations Board has declined to assert jurisdiction in the case involving Northwestern University football players who receive grant-in-aid scholarships. As a result, the Board did not determine if the players were employees under the National Labor Relations Act.  Instead, the Board exercised its discretion not to assert jurisdiction and dismissed the representation petition filed by the union. This means that the ballots cast on April 25 and impounded by the NLRB pending its review of Regional Director Peter Ohr’s decision finding the athletes to be employees under the Act will not be opened and counted.

We will have more on the Board’s decision shortly.

 

NFL vs. Brady: NFL Wins Initial Venue Battle

Round One of Deflategate has concluded…it’s now time for Round Two.

The initial battle over judicial forums between the National Football League and the National Football League Players Association (NFLPA) to find the most favorable venue to support their legal position has ended with U.S. District Court Judge Richard Kyle ordering the NFLPA’s Petition To Vacate The Arbitration Award rendered by Commissioner Roger Goodell (Goodell) to be transferred to the United States District Court for the Southern District of New York.

Within hours after Goodell upheld the four-game suspension of New England Patriots quarterback Tom Brady, the League’s Management Council had launched a preemptive strike against the NFLPA by filing a complaint in the U.S. District Court for the Southern District of New York, where the NFL is headquartered, seeking to confirm Goodell’s “Final Decision on Article 46 Appeal of Tom Brady.” (Article 46 of the NFL-NFLPA collective bargaining contract allows discipline of a player for conduct “detrimental to the integrity of, or public confidence in, the game of professional football.”) . The case has been assigned to Judge Richard Berman and he already has ordered the NFLPA to respond to the NFL’s filing by August 13th, well before the standard period to answer a complaint.

Brady and the NFLPA attempted an end run around the New York action in the historically player-friendly federal district court in Minnesota. They filed a Petition To Vacate Goodell’s Arbitration Award. Relying on a history of success in this venue, Brady and the NFLPA sought to vacate Goodell’s award. They were blocked, however, on July 30th when the Minnesota court said that Brady and his union must do battle with the NFL in New York in light of the league’s earlier, first-filed suit.

Absent any change in the NFPLA’s litigation, Brady and the NFLPA may be expected to respond to the NFL action directly, contending (as they attempted to do in Minnesota) that Goodell:

  • disregarded the “law of the shop” which requires NFL players to have advance notice of potential discipline,
  • disregarded the “law of the shop” that conduct detrimental discipline be fair and consistent,
  • denied Brady access to evidence and witnesses central to his appeal and his rights to a fundamentally fair hearing, and
  • was incapable of serving as an impartial arbitrator as a result of his handling Brady’s initial discipline and appeal.

Specifically, the NFLPA asserts that there was no direct evidence of Brady’s culpability cited in the report prepared by NFL-appointed investigator, attorney Ted Wells, and his investigative team, and that Goodell’s discipline was based on a “general awareness” standard created by the Commissioner to justify an “absurd and unprecedented punishment”. The NFLPA also asserts that no NFL player has ever served a suspension for “non-cooperation” or “obstruction,” as Goodell has imposed upon Brady.

The NFLPA had hoped that its action would be heard before U.S. District Judge David S. Doty, in Minneapolis. In February, Judge Doty vacated an award in the Adrian Peterson child abuse disciplinary matter when he determined that the discipline issued to Peterson was inappropriate for lack of notice and that the discipline imposed was based upon a policy that didn’t exist at the time of the Peterson’s alleged rule violation. But Brady’s case was assigned to Judge Richard Kyle, instead, who “perceive[d] no reason for this action to proceed in Minnesota.”

Here, based on its previous Minnesota claims, the NFLPA had hoped to reprise a similar argument on behalf of Brady. Now the union will be forced to assert those arguments in the NFL’s selected venue. The union will assert similar arguments to U.S. District Court Judge Richard Berman and allege that Brady was never informed he could be punished for his refusal to turn over his cellphone to Wells and his team. It may also ask the New York court to vacate the Goodell arbitration decision before the Patriots’ regular-season opener against the Pittsburgh Steelers — or issue an injunction that allows Brady to play.

The dual filings of the NFL and NFLPA presented an interesting legal issue: which lawsuit has priority? Typically, when federal judges are faced with the issue of deciding which of two competing lawsuits filed in separate federal jurisdictions has priority, they usually invoke the first-to-file rule. While this rule is not codified, the rule is generally considered an appropriate case management mechanism within the federal system. In general, the first-to-file rule gives priority to the first action filed over the subsequent action. The general judicial interpretation of the rule gives the decision making authority of the precedence of the first filed action to the district court judge assigned to that suit.

Federal courts have applied exceptions to the first-to-file rule if its application would create an injustice upon the party that filed the second action. One such exception that presents a strong argument against giving the first filed suit priority is the “anticipatory suit” exception. The purpose of this exception is to discourage procedurally unfair suits filed to frustrate settlement discussions, or to engage in brinkmanship, or to transform a party from defendant to plaintiff not to pursue a claim or right.

One specific rationale that supports the application of “anticipatory suit” exception is the court’s pursuit of procedural fairness. This specific rationale reflects the general judicial concern that a plaintiff should not lose its choice of the forum because the defendant anticipated the impending suit and preemptively struck by filing suit first in a different court.

Here, Judge Kyle specifically acknowledged that the NFL’s filing of the New York action “triggered application of the first-filed rule.” Judge Kyle acknowledged that the rule recognizes “comity between coequal federal courts and promotes the efficient use of judicial resources by authorizing a later-filed, substantially similar action’s transfer, stay or dismissal in deference to an earlier case”.

Judge Kyle concluded that the actions filed in Minnesota by the NFLPA and the NFL’s action filed in New York were almost duplicative and that the two cases and the issues presented in both were “flip-sides of the same coin.” In conclusion, Judge Kyle stated that the “cases are part and parcel of the same whole and should be heard together in the most appropriate forum: the Southern District of New York, where the arbitration occurred, the Award issued, and the first action concerning the Award was commenced.”

While acknowledging the order that the case should be heard in New York, NFLPA attorney Jeffrey Kessler stated, “We are happy in any federal court, which unlike the arbitration before Goodell provides a neutral forum, and we will now seek our injunction in the New York court.”

 

Uniform Law Commission Approves Changes to Uniform Athlete Agents Act

The Uniform Law Commission (ULC) has approved significant changes to the Uniform Athlete Agents Act (UAA) at its recent annual meeting.

The UAA, first adopted in 2000, has been enacted in 40 states, as well as the District of Columbia and the U.S. Virgin Islands. Laws similar to the UAA have been enacted by several states including California, Michigan, and Ohio.

The revisions address allegations of improper conduct by agents in their pursuit and representation of college athletes. As states began considering non-uniform amendments to the UAA to address these issues, the ULC decided to revise the UAA.

Most notably, the UAA will have a broader definition of who qualifies as an agent. The 2000 UAA regulates sports agents but generally exempted financial advisers and other potential service providers to student athletes. The UAA now will regulate financial advisers who offer gifts or money to student-athletes in the hope of securing their business when they turn professional. In addition to traditional sports agents, the UAA will cover any individual who provides consideration to a student-athlete in anticipation of serving the athlete in an advisory capacity on matters related to finances, business pursuits, or career management decisions; or managing business affairs for the athlete by providing assistance with bills, payments, contracts, or taxes. Accordingly, service providers that come under the definition of “agent” will now be subjected to the criminal and civil penalties under the applicable state’s version of the UAA.

The revised UAA also recommends maximum civil penalties for violations be increased from $25,000 to $50,000, although UAA generally leaves it to each state to determine whether a violation is a felony or a misdemeanor. The ULC had considered revising the applicable penalties, but decided against that because most states follow the penalties outlined in the 2000 UAA.

The revised UAA also imposes additional notification requirements for agents, requiring them to inform schools before contacting student-athletes and those close to student-athletes. Agents must notify institutions of a pre-existing relationship with a student-athlete who is on an athletic scholarship. Moreover, the definition of “educational institution” now includes schools from elementary through college.

The revised UAA also provides for enhanced reciprocity in agent registration and includes an alternate provision that contemplates a multistate agency that would manage the registration process. The multistate registration agency could take effect if at least five states join.

The revisions also strengthen the UAA’s ability to bar sports agents from illegally luring college athletes into contracts. For example, the UAA requires that agency contracts be accompanied by a separate record signed by the student-athlete acknowledging that signing the contract may result in a loss of eligibility. The contract also must contain a statement that the agent is registered in the state where the contract is signed.

States may begin adopting the revised UAA in the coming year. The form of the UAA followed has significant implications on the practice of agents within each state, as well as the practice of any individual who provides, or contemplates providing, any services to a student-athlete. It will be important to know which states follow the current UAA, the 2000 UAA, a state-amended version of the 2000 UAA, or some other statutory mechanism to regulate agents.

 

Minor League Baseball Players’ Minimum Wage, Overtime Claims Proceed to Class Certification Stage

Former minor league baseball players are one step closer to gaining class certification of their wage and hour lawsuit against 22 Major League Baseball (“MLB”) franchises. The players allege that the franchises have been paying them less than minimum wage, denying them overtime pay, and requiring them to train during off-season without any pay. They contend the MLB and its clubs violated the FLSA, as well as similar state wage and hour laws in eight states by paying them a total of only $3,000 to $7,000 over the course of a five-month season despite workweeks of 50 to 70 hours.

On July 13, a California federal district court denied a motion by the baseball franchises to dismiss the high-profile suit for failure to pay minimum wages and overtime pay under the Fair Labor Standards Act and state wage and hour laws, allowing the players to proceed to discovery “to determine whether certification is appropriate and whether the proposed class representatives have standing to represent the various proposed classes.” Senne v. Kansas City Royals Baseball Corp., No. 3:14-cv-00608 (N.D. Cal. July 13, 2015).

On May 2, the court dismissed claims against eight of the MLB franchises, finding they did not have sufficient contacts with California, where the suit is pending, to establish personal jurisdiction over them. In the July 13 ruling, however, the court denied Defendants motion to dismiss stating that “the named plaintiffs who are proposed as class representatives of the various state classes seek to represent unnamed plaintiffs who were employed by these other franchise defendants on the basis that they suffered a similar injury.  As to these claims, the court ruled that it is appropriate to defer addressing the question of standing until after class certification.” (Senne, p. 25). As a result, the players have established sufficient standing to pursue discovery by claiming that at least one of the named plaintiffs was denied minimum wages or overtime pay from each of the remaining 22 defendants, and that at least one of the named plaintiffs was employed in each of the states for which the players assert state wage and hour violations.

The franchises have yet to reveal their defense to the specific claims; however, they may argue the players are exempt from FLSA’s minimum wage and overtime requirements because they are employed by a “seasonal amusement or recreational establishment.” Employees of establishments that operate for up to seven months per calendar year, or whose average receipts for any six months of the calendar year are not more than one-third its average receipts for the other six months of the year, are exempt from the FLSA’s minimum wage and overtime requirements.

Rulings on the applicability of the exemption to non-player employees in baseball have been inconsistent.  In 1998, members of the Cincinnati Reds maintenance staff sued the team, demanding overtime pay. An Ohio district court initially ruled in favor of the Reds, describing the team as “an amusement or recreational establishment” that played its games during a season that lasted seven months or less. That decision was overruled when the United States Court of Appeals conducted a detailed accounting analysis of the team’s operation and determined that the Reds did not qualify for a seasonal exemption.

The Detroit Tigers won a similar lawsuit in 1997 when bat boys sought overtime pay for their work in excess of 40 hours in a week. The Tigers claimed the seasonal exemption as a defense and were successful as the court recognized that Tiger Stadium only operated on a seven-month schedule, making its operation seasonal.

The Sarasota White Sox, a former minor league franchise in the Florida State League, also won a lawsuit by claiming a seasonal exemption in 1995 when a groundskeeper sued for overtime. The court ruled that the team played in a six-month season and made 99 percent of its revenue during that time period.

The question of whether the franchises will be safe from potentially significant wage and hour liability in this latest litigation may be a close call.

 

 

NCAA Changes Course, Proposes Rule Allowing Players to Reject NBA and Return to School

The NCAA men’s basketball oversight committee has proposed a significant rule change that would allow undergraduate basketball players to return to school and resume their playing careers after initialing declaring their eligibility for the NBA draft. This proposed amendment is a drastic change from existing NCAA rules which prevent a student-athlete from returning to school and resuming his collegiate basketball career once he has filed for NBA draft eligibility.

Under the proposed rule change, underclassmen who have initially elected to make themselves eligible for the NBA draft would be permitted to attend the NBA’s pre-draft combine in May and receive a personal evaluation of their projected draft status by NBA personnel. The player then would be able to review and assess the feedback he received and potentially withdraw from NBA draft consideration and protect their remaining collegiate eligibility. If adopted, the NCAA will establish a withdrawal deadline date consistent with the proposal.

The NBA still would maintain an early draft entry deadline for underclassmen in late-April and a projected withdrawal date from draft consideration of 10 days before the draft, consistent with the terms of the current collective bargaining agreement before the NBA and its Players Association.

The NBA and the NCAA worked together on this proposal to address the increasing number of underclassmen who have elected to make themselves eligible for the NBA draft. Currently, 47 of the players who have elected early eligibility for the NBA draft are from college programs. Since the NBA draft allows a team to select a total of 60 players during its two-round draft process, a number of players who elected to leave college early likely will not be drafted. These undrafted players have limited options to continue their careers overseas or in the NBA’s development league. However, they do not have the option of returning to college and resuming their careers.

UCLA athletic director Dan Guerrero, chairperson of the NCAA’s men’s basketball oversight committee that drafted the proposed rule change, explained that the change will be in place for the 2016 NBA draft if it is adopted by the NCAA during a scheduled vote expected to occur in a January 2016 meeting.

 

New York’s ‘Enough is Enough’ to Become Law

Legislation to curb sexual assault on college campuses in New York is set to become law. Governor Andrew Cuomo had introduced the bill in January 2015.

The “Enough is Enough” bill encourages victims of sexual assault on campus to report the incident and bolsters support services for victims. Significantly, the legislation adopts a statewide affirmative consent definition for college campuses. Following in California’s footsteps, the New York legislation defines consent as a:

“knowing, voluntary, and mutual decision among all participants to engage in sexual activity” and specifies that “consent can be given by words or actions, as long as those words or actions create clear permission regarding willingness to engage in the sexual activity.”

The bill also includes:

  • A statewide amnesty policy to ensure students reporting incidents of sexual assault will not face discipline for otherwise violating the college’s code of conduct, including any drug or alcohol policy;
  • A Students’ Bill of Rights, which must be distributed to all students, identifying students’ rights, including the right to report such incidents to outside law enforcement, and how students may access resources;
  • Comprehensive training requirements for students, faculty, staff, and administration; and
  • Reporting requirements for secondary institutions to report annually data on the number of reported sexual assaults along with their adjudication.

The bill also creates a new unit within the New York State police department: the “sexual assault victims unit.” The unit would specialize in handling sexual assault and providing assistance to campus police. Finally, a commitment of $10 million has been pledged in the legislation to help combat campus sexual assault.

Except for the affirmative consent definition included in the bill, much of the legislation builds upon the requirements of the Campus SaVE Act, which was part of the Violence Against Women Reauthorization Act signed into law by President Barack Obama in 2013. Secondary schools have until July 1, 2015, to finalize policies and procedures to comply with Campus SaVE. Now, secondary schools in New York State also must revise their policies to comply with “Enough is Enough.”

The NCAA And Transgender Student-Athlete Participation

“Transgender” is an umbrella term for a person whose gender identity presentation is outside stereotypical gender norms and who may seek to change his or her physical characteristics through hormones, gender reassignment surgery, or other actions. Specifically, one’s internal psychological identification as a boy/man or girl/woman does not match the person’s sex at birth. For example, a male-to-female (MTF) transgender person is someone who was born with a male body, but who identifies as a girl or a woman. A female-to-male (FTM) transgender person is someone who was born with a female body, but who identifies as a boy or a man.

There is no federal anti-discrimination law based on gender identity or expression; however, federal courts and the EEOC have concluded that transgender discrimination is discrimination “based on … sex” and violates Title VII and some state courts and human rights agencies have ruled transgender employees are protected by their state anti-discrimination laws. Many states have also explicitly included gender identity and/or gender expression in their employment non-discrimination statutes. In addition, many employers, including schools, are adding gender identity or expression to their non-discrimination policies. Many parents and student-athletes are insisting that athletic programs accommodate transgender students and requiring educational leaders to ensure these students have access to equal opportunities in all academic and extracurricular activities (including athletics) in a safe and respectful school environment.

The National Collegiate Athletic Association (NCAA), which organizes athletic competition at over 1,000 colleges and universities, does not require gender confirming surgery or legal recognition of a player’s transitioned sex in order for transgender players to participate on a team which matches their identity. However, the issue of transgender athletic participation becomes more complicated when the athlete’s use of hormone treatments is at issue.

In 2011, the NCAA’s Office of Inclusion, “to provide guidance to NCAA athletic programs about how to ensure transgender student-athletes fair, respectful, and legal access to collegiate sports teams based on current medical and legal knowledge,” provided best practices and policy recommendations for member institutions, as well as guidance for implementing those policies.

Any transgender student-athlete who is not taking hormone treatment related to gender transition may participate in sex-separated sports activities in accordance with his or her assigned birth gender.

  • A trans male (FTM) student-athlete who is not taking testosterone related to gender transition may participate on a men’s or women’s team.
  • A trans female (MTF) transgender student-athlete who is not taking hormone treatments related to gender transition may not compete on a women’s team.

The participation of FTM and MTF student-athletes who are currently undergoing hormone treatments is treated differently.

  • A FTM student-athlete who has received a medical exception for treatment with testosterone for diagnosed Gender Identity Disorder or gender dysphoria and/or Transsexualism may compete on a men’s team, but is no longer eligible to compete on a women’s team without changing the team status to a mixed team. A mixed team is only eligible to compete for men’s championships.
  • A MTF student-athlete being treated with testosterone suppression medication for Gender Identity Disorder or gender dysphoria and/or Transsexualism may continue to compete on a men’s team, but may not compete on a women’s team without changing it to a mixed team status until completing one calendar year of documented testosterone-suppression treatment.

The use of banned substances, like testosterone, by student-athletes further complicates the issues for FTM and MTF student-athletes. Specifically, NCAA Bylaw 31.2.3 identifies testosterone as a banned substance, and provides for a medical exception review for demonstrated need for use of a banned medication. It is the responsibility of the NCAA institution to submit the request for a medical exception for testosterone treatment prior to the student-athlete competing while undergoing treatment. In the case of testosterone suppression, the institution must submit written documentation to the NCAA of the year of treatment and ongoing monitoring of testosterone suppression.

Another NCAA regulation that can be impacted by transgender student-athlete participation is mixed team status. A mixed team is a varsity intercollegiate sports team on which at least one individual of each gender competes. A mixed team shall be counted as one team. NCAA rules state that a male participating in competition on a female team makes the team a “mixed team.” Such a team is ineligible for a women’s NCAA championship but is eligible for a men’s NCAA championship. However, when a female competes on a men’s team, the team remains eligible for a men’s NCAA championship. Once a team is classified as a mixed team, it retains that status through the remainder of the academic year without exception.

Though the number of transgender students is small, research indicates that the number is growing. As the number of people who assert their status as transgender as teenagers and children increases, support for their specific transgender rights has also increased. In response to these societal demands, college leaders must be prepared to accommodate the educational needs and protect the rights of transgender students. To respond to these realities, athletics conferences and individual universities/colleges are well advised to ensure their policies and procedures on the inclusion of transgender student-athletes are in line with the NCAA Inclusion of Transgender Student-Athletes best practices and policies to provide fair, respectful, and legal access to collegiate sports for all student-athletes.

 

 

Is ‘Loss of Value’ Insurance Worth The Price For Student-Athletes, Universities??

Disability insurance policies are frequently secured by college football players, especially those who expect to be selected in the early rounds of the NFL draft. These policies are typically secured by the player in one or two forms. One option allows players to secure coverage to protect against “total permanent disability”. Such coverage would only pay the athlete in the event of a catastrophic, career ending injury. Alternative policies can protect the athlete against the potential “loss of value” tied to the player’s projected draft position. This type of insurance coverage provides a player protection in the event his projected draft position drops because of injury. Typically, the policy would make up the difference the projected bonus money and the actual contract amount secured by the player. Unfortunately, ‘loss of value’ insurance policies, may not be as easy to collect on as initially thought.

High-profile players, including 2015 NFL Draft’s No. 1 pick Jameis Winston, have secured the insurance expecting that if an injury causes their draft stock to fall, thus resulting in a lesser contract, they can collect on the policy to recoup some of the lost earnings. Jameis Winston’s premium for “loss of value” insurance was reportedly paid out of the Florida State University’s Student Assistance Fund (SAF). The SAF allows schools to “assist student-athletes in meeting financial needs that arise in conjunction with participation in intercollegiate athletics, enrollment in an academic curriculum or that recognize academic achievement.”

In addition to schools using the NCAA authorized Student Assistance Fund to pay insurance premiums for star athletes, the NCAA issued a waiver after the start of the 2014 football season creating a new avenue for college football players to secure loss of value insurance. While student-athletes had previously been able to secure the loss of value insurance only with their own funds or the use of SAF, purchasing the insurance became easier in October, when the NCAA began granting waivers to student-athletes, allowing them to purchase the insurance by borrowing against their future earnings to secure a loan from an established, accredited commercial lending institution, for the purpose of purchasing loss-of-value insurance. However, despite the increasing popularity of the loss of value insurance, no collegiate student-athlete has been able to collect on a policy, according to ESPN’s Darren Rovell. Former University of Southern California wide receiver Marqise Lee is currently experiencing the challenges of trying to collect on his policy.

Lee, once projected as a first round pick, purchased loss of value insurance in August 2013. He paid a $94,600 premium for $9.6 million in coverage. Lee believed that the coverage protected him if his draft position dropped and he signed a rookie contract worth significantly less than that the projected $9.6 million amount. Lee injured his left knee just two games into the 2013 season. As a result of the injury, Lee’s draft position dropped to the 39th overall pick in the 2014 NFL draft. Ultimately, he signed a contract with the Jacksonville Jaguars for $5.17 million. Lee filed an insurance claim and attempted to collect on the policy, but was unable to do as the insurance company raised a defense that Lee had misled with regard to pertinent medical information. In March 2015, Lee, along with a former USC teammate facing a similar issue, sued the insurance company over their failure to honor the policy.

Lee’s lawsuit highlights the potential challenges of collecting on loss of value policies. While the securing of insurance policies for student-athletes has indeed become a tool for universities to help keep star players remain in school and to temporarily forego the NFL, the possible issues related to collection are apparent. The University of Oregon utilized its SAF to purchase policies for its players, including cornerback Ifo Ekpre-Olomu. Ekpre-Olomu, once projected as a first round pick, likely will attempt to collect on his policy after an ACL injury in December 2014 caused him to fall to the seventh round of the 2015 Draft. The cornerback’s policy, which cost the University of Oregon $40,000, calls for a $3 million payout since Ekpre-Olomu late round selection was well after the coverage threshold of the first picks of the third round of the 2015 Draft.

All athletes that utilize the NCAA waiver to purchase insurance or universities that allocate SAF to purchase loss of value insurance will need to monitor Lee’s lawsuit and Ekpre-Olomu’s attempt to collect on his policy. If student-athletes continue to face difficulties collecting on their policies, both student-athletes and their universities will need to reconsider whether such policies are worth the cost.

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