Texas House Bill 25, “The Save Women’s Sports Bill,” would bar public school students from participating in interscholastic athletic opportunities designated for the opposite “biological sex.”

The proposed legislation was passed by the Texas State Senate by a 19-12 margin, and an amended version of the measure received support and approval from the State House of Representatives. The bill will now be presented to Texas Governor Greg Abbott for his signature.

Governor Abbott, who has strongly supported previous legislative efforts restricting transgender youth participation in interscholastic sports, is expected to sign the bill into law.

The bill’s sponsor, Rep. Valoree Swanson, has explained that the bill seeks to protect competitive fairness, the safety of girls (who might otherwise be competing against bigger, faster, and stronger “biological males”), and girls’ right to equal access to athletic opportunities as guaranteed under Title IX. Acknowledging the University Interscholastic League (UIL), the governing body of school sports in Texas, previously adopted a 2016 rule that requires athletes to compete in sports based on the gender listed on their birth certificates, Swanson maintained her bill only seeks to codify existing UIL rules.

House Bill 25’s stated purpose is to remedy past discrimination for girls who historically were denied sufficient interscholastic athletic opportunities because:

  1. Boys historically participate in interscholastic athletics at higher rates than girls;
  2. Courts have identified a legitimate and important governmental interest in remedying past discrimination against girls in athletics on the basis of sex and endorsed equality of athletic opportunity between the sexes under Title IX; and
  3. Courts have identified that classification by sex is the only suitable classification to promote the governmental interest of providing for interscholastic athletic opportunities for girls.

The bill bars schools from allowing students to compete in an interscholastic athletic competition authorized by the district or school that is designated for the biological sex opposite to the student’s biological sex.

Schools or districts must to look at the student’s official birth certificate to determine biological sex. If an official birth certificate is not obtainable, then another governmental record must identify the student’s biological sex.

Rep. Mary Gonzalez is among the legislators who strongly opposed the bill. She commented, “This bill has one target, trans and intersex youth. And knowing that this bill has a target and can hurt innocent children – why are we even having this debate?”

Gonzalez stated, “[T]here is no issue with transgender and intersex students playing sports.”

Several state and national LGBTQ rights groups plan to challenge the bill. Houston’s professional men and women’s soccer teams, the WNBA, and a coalition of around 1,500 companies have taken a stand against the bill.

Legislation similar to House Bill 25 has become law in five other states; however, the Texas bill is arguably the most restrictive. In an effort to address potential privacy concerns, the bill requires school districts to comply with state and federal law regarding the confidentiality of student medical information. It identifies Chapter 181 of the Health and Safety Code and the HIPAA as laws school districts must comply with.

Jackson Lewis’ Sports Industry Team will continue to monitor the progress of this legislation. Please feel free to reach out to any member of the Team with questions.

As vaccination mandates continue to be a topic of discussion and discord in the workplace, the world of college athletics is not exempt from similar mandatory vaccine controversy.

The First Amendment rights of 16 student-athletes seeking a religious exemption as a basis to avoid compliance with Western Michigan University’s (WMU) COVID-19 vaccination requirement were “likely violated,” the U.S. Court of Appeals for the Sixth Circuit has ruled, upholding a decision of the U.S. District Court for the Western District of Michigan.

The 16 student-athletes represented a broad, diverse group of student-athletes participating on WMU’s sports teams including football, baseball, women’s basketball, women’s soccer, the dance team, and cross-country programs.

The Circuit Court upheld the District Court’s issuance of a preliminary injunction allowing the student-athletes to continue participating in intercollegiate athletics at WMU despite the athletes’ refusal to comply with WMU’s mandate that all student-athletes receive a COVID-19 vaccine to continue playing and representing WMU in intercollegiate competition.

The Sixth Circuit has jurisdiction over Michigan, Ohio, Kentucky and Tennessee, all states containing numerous colleges and universities recognized for their athletic teams.

WMU policy stated that in order “to maintain full involvement in the athletic department,” students must be vaccinated against COVID-19.

This vaccination requirement did not apply to any other students at WMU.

Despite this specific student-athlete directive, the policy provided, “Medical or religious exemptions and accommodations will be considered on an individual basis.”

The Circuit Court focused on the fact that, despite the policy’s recognition of exemptions and accommodations, the WMU denied the student-athlete applications of several student-athletes, stating only that the applicant would have “[n]o participation in Intercollegiate sports.”

In addition, the Court noted, WMU failed to respond to certain accommodation requests, but still prevented the student-athlete from participating as a member of their team in collegiate competition.

The Court also pointed out that WMU only provided the student-athletes the limited choice of getting vaccinated or not fully participating in intercollegiate sports. The Court concluded “that conditioning the privilege of playing sports on plaintiffs’ willingness to abandon their sincere religious beliefs burdened their free exercise rights.”

The Court recognized WMU’s good faith as well as “the burdens COVID-19 has placed on this nation’s universities,” stating its “holding is narrow.”

The Court noted, “[O]ther attempts by the University to combat COVID-19, even those targeted at intercollegiate athletics, may pass constitutional muster.”

However, WMU’s announcement of a process that allows student-athletes to seek individualized exemptions requires the University to explain why it chose not to grant an exemption to any student-athlete seeking such protection.

Jackson Lewis’ Sports Industry Team will continue to monitor any further developments regarding the WMU case and its potential impact on college sports. Please contact a Jackson Lewis attorney or any member of our COVID-19 team if you have any questions.

The on-and-off effort at the National Labor Relations Board (NLRB) to classify “student-athletes” as “employees” has renewed. Although the National Labor Relations Act contains no formal recognition of student-athletes as employees, NLRB General Counsel Jennifer Abruzzo issued a memorandum on September 28, 2021 (GC 21-08) asserting

“her prosecutorial position” that certain players at academic institutions are employees pursuant to her personal interpretation of the Act.

Abruzzo also asserted her view that reference by schools to these student-athletes as anything other than employees is a misclassification of their status. Abruzzo asserted that such misclassification and reference to the term “student-athlete” has a chilling effect that misleads student-athletes to believe they are not entitled to the Act’s protection.

The GC will allege that misclassifying such “employees” as mere “student-athletes” is a violation of Section 8(a)(1) of the Act.

The ultimate goal of Abruzzo’s memorandum is to duplicate the effort of Obama-era NLRB General Counsel Richard Griffin. Abruzzo’s memorandum reinstates, adopts, and updates the reasoning from Griffin’s January 31, 2017 memorandum (GC 17-01), which was later rescinded by Trump-appointee General Counsel Peter Robb in GC 18-02. Arising out of Northwestern University football players’ attempts to unionize in 2015, the January 2017 memorandum concluded that scholarship football players met the broad interpretation of the Act’s definition of “employee” and the common-law test: that they (1) perform services for their colleges and the NCAA in playing football and generating millions of dollars in net profits and immeasurable positive reputational impact boosting admission applications and alumni donations; (2) are subject to the control of their college and the NCAA based on the NCAA’s strict rules and compliance requirements and additional controls at individual institutions; and (3) receive compensation in the form of valuable scholarships covering tuition, fees, rooms, board, books and additional stipends clearly tied to a player’s status and performance on the football field.

The General Counsel can only make arguments to the NLRB itself. It is the Board that decides cases.

In 2015, the NLRB declined to make a conclusive finding regarding the “employee” status of Northwestern’s players. A unanimous Board held, “[W]e conclude, without deciding whether the … players are employees under [the Act], that it would not effectuate the policies of the Act to assert jurisdiction in this case.” Northwestern University, 362 NLRB 1350, 1355 (2015). Thus, the NLRB punted: exercising their statutory prerogative to decline to extend jurisdiction of the law to the players, the Board avoided making a controversial decision.

Ultimately, Abruzzo hopes to encourage student-athletes to either seek the specific protection of rights as employees under the Act by filing unfair labor practices or by encouraging student-athletes to follow a similar approach that the Northwestern football players did in 2014 by filing a petition with the NLRB seeking to become unionized. Without specific recognition by the NLRB following either of these steps by the student-athletes,

Abruzzo’s memo lacks unilateral authority to carry out her goal of having university and college “employees” participating in the stadiums and arenas across the country.

The GC is hopeful that the newly seated Biden majority on the NLRB will see this issue differently.

Abruzzo seeks further support for her position by discussing recent developments in the law, NCAA regulations, and societal landscape that have changed the traditional notion of amateurism and support extension of protection under the Act to collegiate players. These developments include the U.S. Supreme Court’s unanimous decision in NCAA v. Alston finding NCAA rules violate antitrust law; the NCAA rules change in the face of numerous state laws allowing players to profit from their name, image, and likeness rights; and recent collective action taken by collegiate players related to social justice issues and the COVID-19 pandemic.

If the NLRB were to rule that players will be considered “employees” under the Act, it would be in conflict with other federal laws. A federal judge in Pennsylvania had denied a motion to dismiss claims by players that their college and the NCAA are joint employers under the Fair Labor Standards Act (FLSA) and are owed minimum and overtime wages. While the players cleared an initial hurdle in the FLSA suit, the decision cuts against rulings from other federal circuits that the players are amateurs, lacked an expectation of compensation and are not employees under the FLSA.

These other laws and other unaddressed issues still raise numerous questions even if student-athletes are formally determined to be employees by the NLRB. A few of these questions are:

  • Will the scholarships these “employees” are currently receiving from their schools because of their athletic prowess be considered income, subject to federal, state and local tax?
  • In addition to becoming subject to potential collective bargaining agreements like professional athletes, are student-athletes going to enter into individual employment contracts with their universities that can be terminated, via release for poor performance or injury?
  • Will student-athletes be willing to exercise their legal right to strike? If they do, what will happen to the status of their season if they are the only team to strike and they miss an extensive part of their season, especially for star players seeking to become professionals.

Jackson Lewis’ Sports Industry Team will continue to monitor these developments and the potential impact on college sports. Please feel free to reach out to any member of the Team with questions.

 

The NCAA must defend claims that they are a joint employer from student-athletes seeking to be paid for the time they spend participating in collegiate athletic activities. Despite U.S. District Court Judge John Padova’s dismissal with prejudice of wage and hour claims filed by the student-athletes against more than 20 schools that the plaintiffs never attended, he rejected that same argument when raised by the NCAA. Instead, he allowed the Fair Labor Standards Act (FLSA) claim seeking financial remuneration for their participation in Division I athletic activity to continue against the NCAA. (Ralph “Trey” Johnson et al. v. NCAA).

Judge Padova concluded the student-athletes’ allegation that the NCAA is their joint employer, along with the defendant university schools that the student-athletes attended, is possible.

Recognizing that two different entities can be joint employers of the same person if they both have significant control over the employee, Judge Padova utilized a Third Circuit test involving four factors established In Re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation. The four factors to consider if a joint employer relationship exists as outlined in Enterprise include, if an alleged employer can hire and fire the relevant employees; if it has the authority to promulgate work rules and assignments and to set the employees’ conditions of employment; is involved in day-to-day employee supervision and discipline; and has actual control of employee records, including payroll.

Approximately one month ago, Judge Padova allowed the six student-athlete plaintiffs’ claims against their institutions (Villanova, Fordham, Sacred Heart, Cornell and Lafayette) to proceed because the schools had failed to provide sufficient proof to establish that the student-athletes were not employees. Similarly, Judge Padova rejected the NCAA’s defense and effort to dismiss the FLSA action concluding that a possible joint employer relationship exists because the “NCAA does more than just impose rules…it also investigates violations of those rules and imposes penalties, including the firing of student athletes, for those violations”.

Judge Padova concluded,

“the complaint plausibly alleges that the NCAA exercises significant control over the hiring and firing of student athletes, including plaintiffs, such that the complaint satisfies the first factor of the Enterprise test with respect to the NCAA.”

Jackson Lewis’ Sports Industry Group will continue to monitor the progress of this case and its potential impact on college sports. Please feel free to reach out to any member of the Group with questions.

A case that may signal the continued erosion of the amateur status of college student-athletes will continue as the action in Ralph “Trey” Johnson et al. v. NCAA has survived the defendants’ motion to dismiss the complaint.

U.S. District Court Judge John Padova allowed the six student-athlete plaintiffs’ claims against Villanova, Fordham, Sacred Heart, Cornell and Lafayette to proceed as he concluded  the schools had failed to show at this stage of the litigation that the student-athletes were not employees. The student-athletes brought their claims as a proposed collective or class action. They seek to be classified as employees pursuant to the Fair Labor Standards Act (FLSA) and state labor laws and be entitled to paid minimum wage.

Judge Padova’s 30-page order discussed familiar arguments made by the plaintiffs’ attorney Paul McDonald in Berger v. NCAA, a 2016 case decided by the U.S. Court of Appeals for the Seventh Circuit. In Berger, the Seventh Circuit rejected the “employee” argument, concluding the amateur status of college athletes prevented their classification as employees of their individual schools. Judge Padova rejected the schools’ argument that the student-athletes are enrolled as students and do not perform functions of an employee.

Judge Padova distinguished Berger and referred to the recent U.S. Supreme Court decision in NCAA v. Alston,

which rejected the argument that student-athlete compensation for educational benefits should be limited. He further rejected the position of the NCAA and the individual schools “that Plaintiffs are not employees entitled to minimum wage pursuant to the FLSA because there is a long-standing tradition of amateurism in NCAA interscholastic athletics that defines the economic reality of the relationship between the Plaintiffs and schools.”

In his analysis, Judge Padova applied the Second Circuit’s Glatt test. This test is used for assessing when an intern should be considered an employee based upon the benefits received and an analysis of seven factors.

The seven factors are:

  1. The interns expected payment for the internship program;
  2. The training in the internship was consistent with what they would have learned in an educational environment;
  3. The internship was for academic credit or was part of the intern’s formal education;
  4. The internship period was consistent with an academic calendar;
  5. The internship duration was for a valuable period;
  6. The interns displaced paid employees through the tasks they perform; and
  7. The interns expected an offer of paid employment following the internship.

Judge Padova stated that under some of the factors, such as whether there was an expectation of compensation or a job, student-athletes would not appear to be employees. He considered two other factors, whether an intern receives training similar to that in an educational environment and the extent to which the internship is limited to the period in which it provides beneficial learning, as neutral.

However, Judge Padova found other Glatt factors suggest the athletes are employees.

These factors included the extent to which: an internship is related to an intern’s education, an internship accommodates an intern’s academic commitments, and the intern complements instead of displaces the work of employees.

“Balancing all of these factors,” Judge Padova concluded, “that the complaint plausibly alleges that plaintiffs are employees of the [schools] under the Glatt test.”

While the denial of the motion to dismiss will allow the action to continue, an analysis of the merits has yet to begin. The standard to oppose a motion to dismiss is much lower than the burden of proof facing the plaintiffs in a potential trial.

Jackson Lewis’ Sports Industry Team will continue to monitor the progress of this litigation and its potential impact on college sports and student-athletes being considered as employees.. Please feel free to reach out to any member of the Team with questions.

 

Legislation recently reintroduced by Senators Maria Cantwell (D-Wash.) and Shelly Moore Capito (R-W.Va.) joins a growing number of federal bills on pay equity for female athletes.

The “Equal Pay for Team USA” Act of 2021, first introduced in 2019, would require equal pay for all athletes representing the United States in international sporting competitions, regardless of the athlete’s gender. This comes less than a month after the “Even Playing Field” Act, another bill addressing pay equity for female athletes, was reintroduced.

Currently, men and women representing Team USA in the same sport can receive different compensation, which can result in a gender-based pay disparity. The disparity in pay between men’s and women’s national teams was highlighted after the U.S. Women’s National Soccer Team (USWNT) victory in the 2019 FIFA World Cup finals. The USWNT sued the U.S. Soccer Federation for equal pay under the Equal Pay Act and Title VII of the Civil Rights Act, eventually settling some claims.

The USWNT has won four FIFA world cup titles (1991, 1999, 2015, and 2019) and four Olympic gold medals (1996, 2004, 2008, and 2012).

Introducing the bill, Senator Capito explained, “[I]t is only right that the women competing for the United States in global athletic competitions receive the same kind of pay and benefits as their male counterparts. This is an issue we can address together, not as Democrats and Republicans, but as Americans, and I’m proud to join Senator Cantwell in introducing this legislation.” The proposal goes beyond equal financial compensation.

It requires that all athletes are afforded the same benefits, medical care, travel budgets, and reimbursement of expenses.

The national governing bodies for over 50 sports and the U.S. Olympic and Paralympic committees, which would also be required to conduct oversight investigations and submit annual reports regarding compliance, would be covered. Senator Cantwell emphasized that Americans should be assured that U.S. athletes representing the country on the world stage are compensated equally and

“anything short of that sends exactly the wrong message across the world and here at home about the American commitment to equality and fairness.”

The proposal has already garnered support of several organizations, including the National Interscholastic Athletic Administrators Association, Sports Fans Coalition, Women’s Basketball Coaches’ Association, and UN Women.

If you have questions about this or other equal pay issues, contact a member of the Jackson Lewis Sports Industry Team or any Jackson Lewis attorney to discuss.

Effective July 1, 2021, college athletes in South Carolina can earn compensation for the use of their name, image, or likeness (NIL) and obtain agents. South Carolina Attorney General, Alan Wilson, certified the effective date of the bill as July 1st after the NCAA Board of Directors agreed to allow student athletes to earn compensation for the use of their NIL.

Senate Bill 685, signed by Governor Henry McMaster, applies to eligible intercollegiate athletes and post-secondary educational institutions in South Carolina. It prohibits such institutions from adopting or maintaining contracts, rules, regulations, or standards that prevent or unduly restrict an athlete from (1) earning NIL compensation, or (2) obtaining an agent for the purpose of securing NIL compensation. Institutions and athletic conferences are also prohibited from directly or indirectly creating or facilitating NIL compensation opportunities for athletes.

Although the law opens the door to NIL compensation, it also provides limits. College athletes in South Carolina will be able to receive NIL compensation only from third parties for endorsements, non-athletic work product, and activities related to a business that the athlete owns. College athletes in South Carolina may not earn NIL compensation for any of the following:

  • The athlete’s athletic participation or performance, or recruiting inducements by a higher education institution or its boosters;
  • Endorsement of tobacco, alcohol, illegal substances or activities, banned athletic substances, gambling, or sports betting;
  • Activities that use the institution’s facilities, uniforms, or intellectual property in connection with the use of the athlete’s NIL;
  • Activities that occur during participation in academic, athletic, or team-mandated activities; and
  • Activities that conflict with existing institutional sponsorship agreements or other contracts or that conflict with defined institutional values, if the institution elects to prohibit NIL compensation on these grounds.

Further, to earn NIL compensation under the law, an athlete is required to (1) abide by their institution’s and athletic department’s policies with respect to missed class time and good academic standing, (2) meet all academic requirements of the athletic association and conference to which the institution is a member, (3) disclose existing NIL contracts to the institution and its athletic department prior to enrollment or signing a financial aid agreement or team contract, and (4) disclose the terms of proposed NIL contracts to the institution prior to signing the contracts, in a manner designated by the institution. Higher education institutions must disclose prohibitions for the use of NIL to college athletes at the time the athlete is admitted or signs a financial aid agreement or team contract.

A grant in aid, including the cost of attendance, awarded to an athlete is not considered NIL compensation under this law and may not be reduced or revoked because the athlete receives NIL compensation or agent representation. Although NIL compensation cannot be used to limit athletic grant in aid, it may be used in the calculation for need-based financial aid available to the general student population at an institution.

Anticipating the need for additional oversight, the South Carolina law allows higher education institutions to fund an independent, third-party administrator under their athletic departments who supports education, monitoring, disclosures, and reporting of permitted NIL activities.

At least 20 other states have enacted similar NIL legislation, though the details vary from state to state. In several of those states, including Alabama, Florida, Kentucky, Georgia, Texas, Ohio and Mississippi, college athletes will also be able to earn NIL compensation beginning on July 1, 2021. (For more on trends in NIL legislation across the country, see the following Jackson Lewis articles: State Name, Image, and Likeness Laws With July 1st Effective Dates Continue to Grow and Maryland Adds Athlete Safety Provision As It Joins Growing List Of States To Enact Name, Image, And Likeness Law.)

Jackson Lewis’ Sports Industry Group continues to monitor the ongoing NIL issues on the federal and state levels. Please feel free to reach out to any member of the Group with questions.

In its ongoing reaction to the recent unanimous Supreme Court decision in NCAA v. Alston finding the NCAA in violation of federal antitrust laws, the NCAA Division I Council has voted to support the interim name, image and likeness (NIL) policy provided below. The NCAA Board of Directors will now consider the policy and vote on the potential adoption of the policy on Wednesday, June 30.

If adopted by the Board of Directors, the interim policy will become effective on July 1, 2021, the same date as numerous NIL laws and executive actions will also become effective (including Alabama, Florida, Georgia, Kentucky, Mississippi, New Mexico, Ohio and Texas).

The NCAA has confirmed that the interim NIL policy will remain in effect until either federal legislation is passed or revised NCAA rules are adopted. The policy will authorize student-athletes in all fifty states to have the opportunity to participate and benefit from the marketing of their name, image, and likeness rights.

The policy, which still states that NCAA Bylaws remain in effect, including restrictions on pay-for-play and improper recruiting inducements, provides very limited guidance and defers decisions on compensation for college athletes to states with their own laws or, in the event no such state law is in effect, the policy requires individual conferences and their schools to draft and implement their own NIL policies. These policies must be consistent with NCAA Bylaws as well as applicable federal and state laws.

Despite more than eighteen months of NCAA discussion and its presentation of various proposals, the NCAA has now shifted the burden, requiring conferences and schools to react on an extremely expedited basis to the July 1st effective date for the NCAA policy.

The text of the NCAA’s proposed Interim Policy is as follows:

Interim NIL Policy

The NCAA is committed to ensuring that its rules, and its enforcement of those rules, protect and enhance student-athlete well-being and maintain national standards for recruiting. Those goals are consistent with the NCAA’s foundational prohibitions on pay-for-play and impermissible recruiting inducements, which remain essential to collegiate athletics.

As the NCAA continues to work with Congress to adopt federal legislation to support student-athlete use of NIL, it is necessary to take specific, short-term action with respect to applicable NCAA rules. Accordingly, effective July 1, 2021, and until such time that either federal legislation or new NCAA rules are adopted, member institutions and their student-athletes should adhere to the guidance below.

  1. NCAA Bylaws, including prohibitions on pay-for-play and improper recruiting inducements, remain in effect, subject to the following:
  • For institutions in states without NIL laws or executive actions or with NIL laws or executive actions that have not yet taken effect, if an individual elects to engage in an NIL activity, the individual’s eligibility for intercollegiate athletics will not be impacted by application of Bylaw 12 (Amateurism and Athletics Eligibility).
  • For institutions in states with NIL laws or executive actions with the force of law in effect, if an individual or member institution elects to engage in an NIL activity that is protected by law or executive order, the individual’s eligibility for and/or the membership institution’s full participation in NCAA athletics will not be impacted by application of NCAA Bylaws unless the state law is invalidated or rendered unenforceable by operation of law.
  • Use of a professional services provider is also permissible for NIL activities, except as otherwise provided by a state law or executive action with the force of law that has not been invalidated or rendered unenforceable by operation of law.

2. The NCAA will continue its normal regulatory operations but will not monitor for compliance with state law.

3.  Individuals should report NIL activities consistent with state law and/or institutional requirements.

Jackson Lewis’ Sports Industry Group will continue to monitor the progress of this proposed policy and related legislation and its potential impact on college sports. Please feel free to reach out to any member of the Group with questions.

 

The NCAA has lost an additional federal court battle on name, image, and likeness (NIL) compensation for student-athletes just days after the U.S. Supreme Court’s unanimous decision confirming the Ninth Circuit’s ruling that the NCAA’s limitation on education-related benefits for student-athletes violates federal antitrust laws.

In its latest legal loss, U.S District Court Judge Claudia Wilken, the federal district judge who presided over both the Alston case and Ed O’Bannon antitrust cases, denied the NCAA’s request to dismiss any of the claims in the lawsuit seeking to eliminate any NCAA rules blocking a student-athletes ability to profit from their NIL and allowing student-athletes ability to challenge NCAA rules preventing them from securing a portion of the rights fees received by the NCAA from group licensing revenues from the broadcasting of college sports.

Judge Wilken rejected the NCAA’s motion that the claims asserted in this action have already been ruled upon in prior antitrust litigation

The class action lawsuit, filed in June 2020 on behalf of Arizona State University swimmer Grant House and Oregon women’s basketball player Sedona Prince, will continue. The lawsuit seeks to prevent the NCAA from using any bylaws or rules to allow their college and university members to “restrict the amount of name, image, and likeness compensation available” to athletes. It challenges rules prohibiting athletes from being paid for sponsorships or endorsements, being paid for social media influencer sponsorships and using their NIL to promote their own businesses, along with rules that prohibit them from sharing in television revenue made by schools and conferences through group licensing.

The action also seeks unspecified damages, which could be result in treble damages in the hundreds of millions, based on the share of television-rights money and the social media earnings the plaintiffs claim athletes would have received if the NCAA’s current restriction on NIL compensation had not existed. The suit seeks to cover athletes who played in the last four years through those who play through the date of a final judgment.

When the lawsuit was filed, House alleged the NCAA puts college athletes who are shooting for the Olympics at a huge disadvantage. He stated, “[W]hile Olympic athletes rely heavily on endorsements to afford the cost of competing and training, the NCAA shuts us out of the opportunity entirely.”

Judge Wilken rejected the NCAA’s argument that prior judicial decisions fail to support the claim that student-athletes should be able to make a claim to be compensated for the use of their name, image and likeness in live broadcasts.

She held that the athletes had raised “sufficient” allegations against the rules denying them television revenue in that they “raise the reasonable inference that competition among schools and conferences would increase in the absence of the challenged rules, and that this increased competition would incentivize schools and conferences to share their broadcasting and other commercial revenue with student-athletes even if the student-athletes lacked publicity rights in broadcasts.”

Judge Wilken further supported her dismissal of the NCAA’s motion to dismiss by stating that to establish injury “a plaintiff need not establish that it has a legal entitlement to the compensation in question.” Rather, a “plaintiff can show that it was injured in fact by alleging that it was deprived of the opportunity to receive compensation it otherwise would have received but for the challenged conduct.” 

We will continue to monitor the progress of this case and its potential impact on college sports. Please feel free to reach out to any member of the Sports Industry Group with questions.