State Name, Image, and Likeness Laws With July 1st Effective Dates Continue To Grow

By Gregg E. Clifton and John G. Long on

The race to enact Name, Image and Likeness (NIL) legislation moves forward on a state-by-state basis while the NCAA continues to hold its promised formal NIL legislation in abeyance while awaiting one of several federal legislative proposals to move forward. While the number of states that have either introduced legislation or passed formal NIL laws grows at a rapid pace, Georgia has now joined Florida, Alabama, New Mexico and Mississippi by enacting a name, image and likeness law with a July 1, 2021 effective date.

While all state NIL legislation contains similar provisions providing student-athletes with the ability to profit from the use of their name, image and likeness, each state law contains certain unique provisions. The following is a brief summary of the most recent state NIL enactments with July effective dates.

GEORGIA

House Bill 617, signed into law by Governor Brian Kemp on May 6, 2021, which will be effective July 1, 2021, contains several distinct provisions. First, the law empowers colleges in the state to elect a requirement that all student-athletes share up to 75% of the name, image and likeness compensation generated and received by each athlete. The required sharing would occur pursuant to the pooling of funds “for the benefit of individuals previously enrolled as student-athletes in the same school.”

The funds would be held in an escrow account controlled by each school’s athletic director that would be distributed to former student-athletes upon graduation or 12 months after leaving school early, on a pro-rate basis based upon “the number of months the individual was a student athlete.” The law specifically provides a restriction that a school cannot distribute these escrowed funds in any way that discriminates against a student based on race, gender or other protected characteristics.

An important caveat to the student-athletes sharing requirement contained in the Georgia law allows each individual school to decline the NIL revenue sharing requirement. While the revenue pooling is certainly unique, it is expected that most major Division I programs within the state will exercise their right to decline the revenue sharing as failing to do so would likely put Georgia schools at a huge recruiting disadvantage against other states that have passed NIL laws that have schools within the ultra-competitive Atlantic Coast Conference and Southeastern Conference. Commenting on the reality of the opt-out provision, Georgia Deputy Athletic Director Will Lawler stated, “We have no plans to provide for the pooling arrangement.”

The Georgia law also compels all colleges to provide at least five hours of financial literacy and life skills during the freshman and sophomore years.

NEW MEXICO

On April 7, 2021, the Student Athlete Endorsement Act (Senate Bill 94) became law in New Mexico permitting college student-athletes within the state to receive compensation for the use of their names, images, and likenesses, to hire representatives to represent their interests, and mandating that a student-athlete may not be compelled to forfeit his/her rights in order to participate in intercollegiate athletics. The law applies to endorsement contracts entered into on and after July 1, 2021.

The law specifically prohibits universities within New Mexico from:

    • preventing a student athlete from fully participating in athletics without penalty: (a) for receiving food, shelter, medical expenses or insurance from a third party; or (b) for earning compensation from a third-party as a result of the use of the student athlete’s name, image, likeness or athletic reputation;
  • Prohibiting or discouraging a student athlete from wearing footwear of the student athlete’s choice during official, mandatory team activities so long as the footwear does not have reflective fabric or lights or pose a health risk to a student-athlete;
  • Prevent a student athlete from receiving compensation for the use of the student athlete’s name, image, likeness or athletic reputation when the student athlete is not engaged in official, mandatory team activities; or
  • Arrange third-party compensation for the use of a student athlete’s name, image, likeness or athletic reputation or use such deals as inducements to recruit prospective student athletes.

New Mexico student-athletes are specifically prohibited from entering into any name, image and likeness agreements that require a student-athlete to advertise during official, mandatory team activities without the approval of the student athlete’s post-secondary educational institution.

ALABAMA

On April 20, 2021, House Bill 404 became law, permitting student-athletes to be paid for the use of their names, images, and likenesses, to hire representatives to represent student-athletes’ interests, and declaring that a student-athlete may not be compelled to forfeit his/her rights in order to participate in intercollegiate athletics. The law goes into effect on July 1, 2021.

The law provides that a student-athlete may earn fair-market value compensation for the use of their name, image, or likeness. The law also provides, in pertinent part, that student-athletes may not:

  • Be prevented from using professional representation relating to name, image, or likeness opportunities; and
  • Have their scholarships revoked or reduced because of his/her receipt of compensation for use of their name, image, or likeness, or as a result of the student athlete obtaining professional representation pursuant to this act.
  • In turn, student-athletes are prohibited from allowing from the use of their names, images, and likenesses to promote:
    • A tobacco company or brand, including any tobacco product, alternative nicotine product, electronic nicotine delivery system, or any electronic nicotine delivery system, any alcoholic beverage company or brand, any seller or dispensary of a controlled substance, including, but not limited to, marijuana, any adult entertainment business or casino or entities that sponsor or promote gambling activities;
  • Wear any item of clothing, shoes, or other gear with the insignia of any entity while wearing athletic gear or uniforms licensed by a postsecondary educational institution or otherwise competing in any athletic competition or institutionally-sponsored event
  • In addition, the law mandates financial literacy and life skills teaching for student-athletes. No school is required to provide tax guidance or financial safeguards in addition to the mandated educational programs. The programming may not include any marketing, advertising, referral, or solicitation by providers of financial products or services.

MISSISSIPPI

On April 16, 2021, the governor of Mississippi signed Senate Bill 2313 (i.e., the “Mississippi Intercollegiate Athletics Compensation Act”) into law permitting student-athletes enrolled in a “postsecondary educational institution” in Mississippi to be paid for the use of their names, images, and likenesses, to hire representatives to represent student-athletes’ interests, and declaring that a student-athlete may not be compelled to forfeit his/her rights in order to participate in intercollegiate athletics. The law will become effective on July 1, 2021.

The act further authorizes a student-athlete to hire an agent to negotiate marketing opportunities after providing the school seven days advance notice of their agent selection, while mandating disclosure of endorsement deals to their schools before the deals can become effective. In addition, the act prevents any state educational institution, booster, individual, or other entity from providing compensation to a prospective student-athlete to enter into NIL agreements as a recruiting inducement before that student-athlete is enrolled in a particular school. As with almost all current state laws, the Mississippi law prohibits student-athlete endorsement of gambling, marijuana, sports betting, tobacco, alcohol, or performance-enhancing supplements.

The Mississippi bill also mandates that the student-athletes exercise of their NIL rights will not make them employees or independent contractors of their educational institution. At the same time, it prevents athletic associations, like the NCAA, from denying the student-athlete or the academic institution from participating in intercollegiate athletics as a result of the NIL rights provided in Mississippi law.

The act further provides, any contract for the use of a student-athlete’s name, image, or likeness may not extend beyond the student-athlete’s participation in the sport at the institution.

In turn, student-athletes are required to or prohibited from doing the following:

  • Before any contract the use of a student-athlete’s name, image or likeness is executed, and before any compensation is provided to the student-athlete in advance of a contract, the student-athlete shall disclose the contract to a designated official of the school in which the student is enrolled.
  • No student-athlete shall enter into a name, image, and likeness agreement or receive compensation relating to the name, image or likeness of the student-athlete before the date on which the student-athlete enrolls at a postsecondary educational institution.
  • Additionally, postsecondary educational institution may impose reasonable limitations on the dates and time that a student-athlete may participate in endorsement, promotional, social media or other activities related to the license or use of the student-athlete’s name, image and likeness.

The Mississippi act requires student-athletes obtaining legal representation to use lawyers licensed by the State of Mississippi. Also, athlete agents are required to comply with the terms of the Uniform Athlete Agents Act (Section 73-42-1 et seq., Mississippi Code of 1972) and the Sports Agent Responsibility and Trust Act (i.e., SPARTA).

Several states, including South Carolina and Louisiana are in the final legislative phases of enacting NIL legislation. The state of Texas, which has considered several NIL proposals is expected to join the other states with a potential NIL law with a proposed effective date of September 1, 2021.

TEXAS

Although no NIL bill has passed to date in Texas, the Texas Senate recently voted in favor of an amended version of a proposal to allow student-athletes in the state to enter into NIL agreements.

Senate Bill 1385, sponsored by Senator Brandon Creighton, passed on a 28-2 vote and would go into effect in September 2021. The bill contains a statement of intent declaring that the United States Federal Government should take the lead in ratifying uniform NIL legislation, but in the absence of federal action that Texas should not be left behind as other states gain a competitive advantage by allowing their student-athletes to commercialize their NIL.

S.B. 1385 prohibits postsecondary institutions in the State of Texas from limiting or prohibiting student-athletes from earning compensation from NIL agreements, or from obtaining representation relating to the use of their NIL. Like other state bills, S.B. 1385 restricts Texas institutions from directly providing compensation to student-athletes for their NIL. The Texas bill contains the requirement that student-athletes must disclose NIL agreements to their institution. Interestingly, S.B. 1385 disclaims that student-athletes shall not be considered as employees under Texas State Law.

The current Senate bill differs from Texas’s prior NIL proposals in that it clarifies a morality clause which prohibits student-athletes from endorsing gambling or illegal firearms. S.B. 1385 also restricts student-athletes from using institutional IP in NIL endorsements, and from engaging in commercial activities which contradict institutional honor codes.

Finally, the bill mandates that Texas institutions provide life skills and literacy workshops for its student-athletes, and it provides student-athletes with the ability to earn money through signing autographs.

Jackson Lewis’ Sports Industry Group will continue to monitor the ongoing name, image, and likeness issues on the federal and state level, as well as the upcoming U.S. Supreme Court decision in the Alston case. Please feel free to reach out to any member of the Sports Industry Group with questions.

NCAA Modifies Student-Athlete Transfer Rules to Create Immediate Eligibility

By Gregg E. Clifton and John G. Long on

In a much-anticipated move, the NCAA Division I Council has approved a rule change to modify current transfer rules and unify all student-athletes under the same transfer rules. The change will allow student-athletes in five sports (football, men’s and women’s basketball, baseball, and men’s hockey) to join other Division I student-athletes. It also will authorize athletes in these five sports to transfer once during their five-year window of athletic eligibility without having to sit out a year before being able to resume their athletic careers.

The new transfer rule will modify an antiquated rule from the 1960s, which restricted student-athlete transfer, and allow immediate athletic participation for transferring student-athletes. It is anticipated the formal rule will be approved by the NCAA Board of Directors on April 28th and require athletes who participate in fall and winter sports to notify their current school of their intention to transfer by May 1st and spring sport athletes will be required to provide transfer notification by July 1st. These formal notification dates will begin in 2022. As a result of the transfer rule change occurring after the May 1st notification deadline,

athletes in all sports will be permitted to provide notification of their intent to transfer by July 1st for the current year.

The existing NCAA transfer rule in Bylaw 14.5.1, Residence Requirement-General Principle, states, “a student who transfers to a member institution from any collegiate institution is required to complete one full academic year of residence at the certifying institution before being eligible to compete for or to receive travel expenses from the member institution.” The only exception to this rule permitted a student-athlete to appeal to the NCAA for a specific eligibility waiver to allow immediate eligibility.

The NCAA’s modification to the transfer rule had been anticipated to take place in January, along with the introduction of name, image, and likeness rule modifications. The rule changes had been foreshadowed by the NCAA for several months, but were not finalized after the Justice Department’s antitrust division leader Makan Delrahim informed the NCAA and NCAA President Mark Emmert and expressed concern about potential antitrust law implications involving unnecessary anticompetitive barriers in any proposed NCAA legislation and rule modifications to transfer rules and name, image, and likeness rights.

Anticipating the transfer rule change, active student-athletes increasingly are seeking transfers. In football and men’s basketball combined, nearly 3,000 players are active in the transfer portal, including nearly 1,200 in men’s basketball alone. This significant increase in potential transfers has resulted in strong responses from coaches and collegiate athletic commentators. According to Jon Steinbrecher, Commissioner of the Mid-American Conference, “This concept provides a uniform approach that is understandable, predictable and objective. Most importantly, it benefits students.”

Todd Berry, executive director of the American Football Coaches Association, presented a different viewpoint, raising concerns about the transfer rule changes, “We don’t want to lower graduation rates, we don’t want recruiting off other campuses …. history tells us what is going to happen. You’re basically going to recruit off other campuses.”

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the NCAA and any proposed rule changes or modifications to their existing bylaws. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

 

 

 

Mississippi Student-Athletes Name, Image, and Likeness Law Awaits Governor’s Signature

By Gregg E. Clifton on

Mississippi Governor Tate Reeves is expected to make Mississippi the seventh state to enact name, image, and likeness (NIL) legislation.

When signed, the Mississippi Intercollegiate Athletics Compensation Rights Act will allow Mississippi student-athletes to earn endorsement compensation from the use of their name, image, and likeness and authorize their hiring and use of professional representation, including attorneys and sports agents, without affecting their scholarship eligibility. Unlike other state name, image, and likeness laws that have been enacted with delayed effective dates, the Mississippi law will become effective the same day as Florida’s NIL law, July 1, 2021.

Mississippi will join, California, Colorado, Florida, Michigan, Nebraska, and New Jersey as the newest state to pass a law protecting the rights of student-athletes to be paid for the commercial use of their name, image, and likeness rights.

Several other states, including Alabama, Maryland, and New Mexico, have moved forward with proposals and are nearing state legislative approval for their NIL laws.

Indeed, more states are unwilling to wait for the NCAA to adopt NIL student-athlete rights out of concern about being at a recruiting disadvantage with schools from other states as neither NCAA action nor enactment of proposed federal legislation appears imminent.

While most state NIL proposals have had strong bipartisan support, C. Scott Bounds, a member of the Mississippi House of Representatives stated,

“I don’t think any state is happy about this legislation, but we are seeing this as a necessity …. [W]e don’t want to lose a competitive edge in recruiting, both athletically and academically, especially against those in the Southeastern Conference.”

The Mississippi bill contains similar provisions to the laws of the six states that have already confirmed NIL rights. It protects all Mississippi student-athletes from having their NIL rights restricted by any school or conference. However, it allows a school to impose reasonable limitations on the dates and times a student-athlete may participate in any endorsement activities.

The act further authorizes a student-athlete to hire an agent to negotiate marketing opportunities after providing the school seven days advance notice of their agent selection, while mandating disclosure of endorsement deals to their schools before the deals can become effective. In addition, the act prevents any state educational institution, booster, individual, or other entity from providing compensation to a prospective or current student-athlete to enter into NIL agreements as a recruiting inducement before that student-athlete is enrolled in a particular school. As with almost all current state laws, the Mississippi law prohibits student-athlete endorsement of gambling, marijuana, sports betting, tobacco, alcohol, or performance-enhancing supplements.

The Mississippi bill also mandates that the student-athletes exercise of their NIL rights will not make them employees or independent contractors of their educational institution.

At the same time, it prevents athletic associations, like the NCAA, from denying the student-athlete or the academic institution from participating in intercollegiate athletics as a result of the NIL rights provided in Mississippi law.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the ongoing name, image, and likeness issues on the federal and state level, as well as the upcoming U.S. Supreme Court argument in the Alston case. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

Women’s National Soccer Team Collective Action Against USSF: Settlement, in Part

By Samantha M. Ojo and Zoe Yuzna on

A lawsuit brought by female professional soccer players against the United States Soccer Federation (USSF) may be settled, partly.

In 2019, female professional soccer players on the United States Senior Women’s National Team, including well-known players like Megan Rapinoe, filed a collective action in federal court in California alleging the USSF violated the players’ rights under the Equal Pay Act (EPA) and Title VII of the Civil Rights Act.

Last year, the players filed a motion for partial summary judgment on their EPA claims and the USSF filed a motion for summary judgment as to all claims. The court ruled in the USSF’s favor on the EPA claims, finding the female players’ arguments, which were limited to certain forms of compensation such as bonuses, failed to create a genuine dispute in light of evidence that female players were actually paid more than male players, cumulatively and on average, per game. The court clarified the proper test for the EPA claims is whether the female players received lower wages than the average of wages paid to all male players. It concluded the female players had not so demonstrated.

The district court denied USSF’s motion as to the players’ unequal working conditions claims under Title VII. The parties then reached a proposed settlement as to those claims, which the players has moved the court to approve. Under the proposed settlement, the USSF will implement revised policies to create equality with the men’s soccer team, including new policies for female players’ charter flights, playing conditions, professional support, and hotel accommodations. Under the settlement, the revised policies will remain in effect for four years.

The parties did not reach a settlement as to the players’ EPA claims. The players asked the court to enter final judgment on the USSF’s motion for summary judgment so the players may proceed with an appeal of the court’s decision.

The hearing on the final approval of the settlement of the players’ Title VII claims is scheduled for April 12, 2021. Once the settlement is approved and final judgment is entered, it is expected the players will file an appeal as to their EPA claims.

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

Supreme Court Allows DOJ to Join Oral Argument in Alston Case

By Nicholas A. Plinio and Gregg E. Clifton on

The U.S. Supreme Court has announced that it would allow the U.S. Department of Justice (DOJ) to became an additional presenter during the landmark case, NCAA v. Alston, which is set for oral argument on March 31, 2021.

The Alston case arises out of consolidated appeals from the NCAA and several high-level conferences in two U.S. Court of Appeals for the Ninth Circuit rulings, American Athletic Conference v. Alston and NCAA v. Alston, which challenge the NCAA’s restrictions on compensation student-athletes can earn while participating in collegiate athletics.

The U.S. Solicitor General will have 10 minutes to argue the DOJ’s position that the Ninth Circuit properly found the NCAA’s limitations on education-based benefits to college athletes, including cash-based awards, violate federal anti-trust law under the Sherman Act. Given that the DOJ is the entity responsible for enforcing U.S. anti-trust law, its oral argument regarding its position could prove especially impactful.

In its March 10, 2021 amicus brief — one of 22 filed in Alston by various individuals and entities — the DOJ argued that the NCAA’s restrictions must be analyzed using the full “Rule of Reason” review typical for alleged anticompetitive practices under the Sherman Act. Rule of Reason review would allow a court to undertake an analysis of whether the NCAA’s rules are the least restrictive means to accomplish procompetitive goals. The DOJ’s brief notes that the Supreme Court has never upheld an alleged restraint of trade under Section 1 of the Sherman Act “based on a quick look or abbreviated deferential review” and that doing so in this case would be improper because the NCAA’s restrictions amount to “horizontal price-fixing agreements among competitors who exercise monopsony control in the relevant labor market.”

In its reply brief, the NCAA admonishes the DOJ’s view and stresses the importance of maintaining its authority to oversee collegiate athletics without “judicial superintendence of a defining aspect of college sports.”

Thus, the NCAA maintains that anti-trust concerns regarding its amateurism rules should be analyzed under a more relaxed standard of review.

By agreeing to include the DOJ in oral argument, the Supreme Court may have tipped its hand, at least with respect to what it perceives as the weakness in the NCAA’s case.

While the DOJ does not necessarily contest the NCAA’s control over its amateurism model, it does oppose treating the NCAA differently under anti-trust laws.

The NCAA has defended challenges to its amateurism model in the past by relying on the wide latitude afforded to it to oversee collegiate athletics. However, the Supreme Court appears poised to press the NCAA as to why it deserves a special exemption from federal anti-trust law.

The DOJ’s desire to intervene in Alston is consistent with its recent efforts to establish the federal government’s position on anti-trust issues surrounding amateurism in collegiate athletics. Indeed, the DOJ’s anti-trust concerns indefinitely delayed the NCAA’s historic vote on student-athlete name, image, and likeness rights, originally scheduled to take place this past January. The DOJ is expected to remain a significant player as the landscape of student-athlete rights continues to evolve.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the progress of this landmark case and its potential impact on college sports. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with any questions you may have. 

UPDATE: Sixth Federal NIL Bill Proposed by Kansas Senator Jerry Moran; Senator Booker Comments on Status of College Athlete Bill of Rights

By Gregg E. Clifton and Nicholas A. Plinio on

Amateur Athletes Protection and Compensation Act.

The Amateur Athletes Protection and Compensation Act of 2021 (Protection Act), the sixth federal proposal governing student-athlete name, image, and likeness (NIL) rights, has been introduced U.S. Senator Jerry Moran (R-KS). Senator Moran’s legislation combines aspects of prior partisan legislation proposed by both Republican and Democratic legislators.

The Protection Act follows portions of Senator Murphy’s (D-CT) recently proposed federal College Athlete Economic Freedom Act, and joins other proposals by Senators Booker (D-NJ) and Blumenthal (D-CT), Senator Wicker (R-MS), Senator Rubio (R-FL), and the bi-partisan bill introduced by Representatives Gonzalez (R-OH) and Cleaver (D-MO.). These federal proposals have followed a wave of state-level NIL legislation, which has already resulted in six states passing NIL laws and twenty nine other states currently considering specific NIL legislation.

Under the terms of Senator Moran’s bill, athletes can sign endorsement deals if the agreements do not violate a school’s code of conduct, and recruits can sign similar endorsement deals if they are not considered recruiting inducements. The bill also grants student-athletes the right to enter a sports draft and retain their eligibility if they do not receive compensation from a professional sports league, team, or agent.

Unlike the more restrictive NIL language contained in Republican Senator Rubio and Senator Wicker’s proposed legislation, Senator Moran’s bill follows more liberal democratic proposals that expand medical coverage, lifetime scholarships for former athletes and grant athletes the ability to transfer at least once without penalty. The bill would require schools to cover student-athlete’s medical expenses upon the expiration of their athletic eligibility for either two years or four years depending upon the school’s athletic department revenue. It also compels schools to honor scholarships indefinitely until the student-athlete can complete their undergraduate degree.

Senator Moran’s bill also preempts varying state NIL laws and protects the NCAA from liability from former athletes retroactively seeking compensation. However, it does not grant the NCAA antitrust protection from legal entanglements tied to NIL. Finally,

the bill is careful to ensure student athletes are not considered “employees” of their institution, an important point for the NCAA as it seeks to preserve its amateurism model and avoid any potential that student-athletes could unionize.

The bill also establishes the Amateur Intercollegiate Athletics Corporation (AIAC) to create and enforce rules related to NIL, while also creating a formal certification process for agents. AIAC members would include college athletes, athletic administrators, and experts in the college sports field. Five of the fifteen member AIAC board of directors would have to be current or former college athletes.

Senator Moran commented on his proposed legislation, “The Amateur Athletes Protection and Compensation Act would create a national standard of guidelines to make certain student athletes can benefit from the use of their name, image and likeness without hurting their eligibility to compete as a student athlete.”

Senator Booker comments on status of the College Athlete Bill of Rights legislation

Senator Corey Booker (D-NJ) recently commented on the status of federal NIL legislation. He explained that federal NIL bills creating a uniform national framework for student-athlete NIL rights have added “leverage” as the NCAA and its member institutions face the first real threat to their revenue model with Florida’s NIL bill set to take effect on July 1, 2021. Senator Booker commented, “Now we have leverage because (colleges) are facing a threat to their revenue model. It gives me a chance in my position in the Senate, along with a lot of great Senate partners, to say we are not going to settle these issues unless you make a commitment to the health and safety of our athletes.”

Senator Booker also commented,

“Don’t underestimate our ability to take all the time that we have until the final hours of a deadline.”

Senator Booker believes Congress won’t start moving on a bill until the spring or summer given the nation’s focus on vaccinations and the economy. The expectation is, as with many federal bills, that things will heat up as the deadline nears.

Senator Booker also acknowledged that one of the most controversial items in his bill, a revenue sharing provision which provides student athletes with the opportunity to share in university sport generated revenue may be difficult to secure. Instead, Senator Booker believes Congress will be more apt to approve an expansion of scholarship value and provisions focused on student-athlete health and safety. In fact, Senator Booker himself stated that he will not let “money issues” be settled until issues surrounding student-athlete health, safety, and education are addressed.

Jackson Lewis’ Sports Industry Group will continue to monitor the progress of state and federal name, image, and likeness bills, related developments, and the potential impact on college sports. Please feel free to reach out to any member of the Group with questions.

Senator Murphy Introduces Additional Federal Name, Image, and Likeness Legislation

By Gregg E. Clifton and Nicholas A. Plinio on

An additional federal legislative proposal regarding college athlete name, image, and likeness (NIL) rights has been introduced on Capitol Hill. The Bill, known as the College Athlete Economic Freedom Act (“Freedom Act”), is authored by Senator Chris Murphy (D-Conn.) a leading advocate and author on college athlete rights and U.S. Representative Lori Trahan (D-Mass.), a former NCAA Division I athlete at Georgetown University. The proposed legislation will protect the name, image and likeness rights of current collegiate student-athletes and become the first proposed federal legislation to also provide rights to prospective collegiate student-athletes.

The Bill adds to the ever-growing number of federal NIL legislative proposals, joining the College Athlete Bill of Rights proposed by Senators Booker (D-NJ) and Blumenthal (D-Conn), the Collegiate Athlete and Compensation Rights Act introduced by Senator Wicker (R-Miss), the Fairness in Collegiate Athletics Act presented by Senator Rubio (R-Fla), and the bi-partisan Student Athlete Level Playing Field Act introduced by Representatives Gonzalez (R-Ohio) and Cleaver (D-Mo).These federal proposals have followed a wave of state-level NIL legislation, which has already resulted in six states passing NIL laws (California, Florida, Nebraska, Colorado, New Jersey and Michigan).

While not as expansive as the College Athlete Bill of Rights, the most recent federal proposal, the Freedom Act provides substantial rights to NCAA student-athletes, including the right to financially benefit from the commercial use of their name, image, and likeness and the right to use attorneys and agents to negotiate NIL opportunities. The Freedom Act also guarantees that these financial opportunities can be pursued and secured without affecting the student-athletes’ ability to continue their collegiate careers and scholarship eligibility.

Commenting on the proposed legislation, Representative Trahan stated, “As leaders at the NCAA finally come to grips with the need for change, it’s important that Congress enact reforms to establish and protect student-athletes’ right to be compensated for the use of their name, image, likeness, or athletic association.”

One of the distinct highlights of the Freedom Act authorizes student-athletes to secure opportunities as individuals or to work together to secure group licensing rights.

This authorizes student-athletes to coordinate group efforts to negotiate for the use of their NIL rights to secure and share revenue from the lucrative video game and apparel marketplaces, without restrictions from the NCAA or its conferences or member institutions.

The Freedom Act is also free from anti-trust protections highly sought by the NCAA. Unlike Senator Wicker’s bill, which proposes broad anti-trust protections insulating the NCAA from liability, the Freedom Act provides penalties if the NCAA, a conference, or member institution denies an athlete the right to market his or her name, image, or likeness. Further, the Freedom Act grants a specific private right of action to impose penalties against violators who engage in unfair or deceptive practices in violation of the Act.

Commenting on his bill, Senator Murphy stated,

“It’s simple: this is about restoring athletes’ ownership over the use of their own names and likeness. They own their brand, not their school or the NCAA.”

The Freedom Act also leaves the door open for student-athletes to engage in a form of collective negotiation. While not specifically declaring student-athletes as “employees” and authorizing their ability to formally unionize under the National Labor Relations Act, the Freedom Act authorizes student-athletes to join together and engage in collective action, which would not require student-athletes to hold “employee” or “union” status, but would allow a “collective representative” to represent student-athletes as a group.

Finally, the Freedom Act grants the NCAA at least one of the items on its list by preempting all state laws governing NIL. As such, the Bill would create a uniform, national framework for NIL usage and compensation rights.

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

Will Acting General Counsel Ohr’s Appointment Lead To NCAA Athletes Becoming Eligible To Unionize?

By JaVon A. Payton and Gregg E. Clifton on

President Joe Biden has named Peter Sung Ohr to serve as Acting General Counsel of the National Labor Relations Board (NLRB or Board). Ohr has served as the Regional Director of the NLRB Chicago office for nearly a decade.

While the Regional Director, Ohr is best remembered in the world of collegiate sports for his 2014 landmark decision finding scholarship football players at Northwestern University to be “employees” under the National Labor Relations Act (NLRA or Act), and thus eligible for union membership.

Ohr concluded the amateur scholarship-players performed services under the control of, and for the benefit of, their “employer” (Northwestern University) and the value of the football scholarship was compensation.

As a result,

Ohr ruled “all grant-in-aid scholarship players for the Employer’s football team who have not exhausted their playing eligibility are ‘employees’ under the National Labor Relations Act.”

Northwestern appealed Regional Director Ohr’s ruling. The election was held, but the ballots were impounded and never counted. The five-member NLRB unanimously rejected Ohr’s finding and ended the unionization effort. Northwestern University, 362 NLRB 1350 (2015).

The Board declined to assert jurisdiction of the Act over the players, but avoided the ultimate question of whether the college football players were “employees” under the law.

The Board dismissed the case; the ballots were never counted.

The Board concluded that allowing the football players to unionize could lead to competitive imbalance by creating different standards at schools regarding terms of negotiated compensation and mandatory practice requirements.

The Board’s dismissal of the case left open the “employee” status of college football players (and collegiate athletes in general). On January 31, 2017, Richard Griffin, Jr., NLRB General Counsel and President Barack Obama appointee, issued a memorandum clarifying his position on the employee status of scholarship football players. Griffin contended that scholarship football players at Northwestern were employees and opined that other student-athletes could be considered employees.

The NLRB General Counsel is the Board’s top lawyer and acts as “prosecutor” for the NLRB. General Counsel opinions are not the law. General Counsel Griffin’s position did not last long, as he was replaced in due course by Peter Robb, a President Donald Trump appointee. In December 2017, Robb expressly rescinded the Griffin memorandum.

Has the question come full circle?

With Ohr being named Acting NLRB General Counsel, will he reinstate Griffin’s 2017 memo in an effort to confirm his Northwestern ruling?

It seems likely that advocates of this position will be encouraged by Ohr’s appointment. We expect an increase in union representation petitions for student-athletes, not just in football, but also other Division I scholarship sports such as basketball, baseball, soccer, and hockey. Additionally, if Ohr reverts back to GC-17-01, expect an increase in unfair labor practice charges from student-athletes claiming colleges, including their coaching staffs, have infringed upon their protected concerted activity rights under the Act.

In light of Ohr’s appointment at a time when numerous legal issues relating to name, image, and likeness rights for student-athletes and antitrust issues surround the NCAA and college sports, the potential of employee status for scholarship athletes is significant.

While President Biden acted quickly to fire General Counsel Robb and appoint Ohr as his personal selection to serve as Acting General Counsel, one open question is whether Ohr will assert his authority while serving as the Acting General Counsel to repeat his landmark regional decision on a national level.

Jackson Lewis’ Labor Relations Practice and Collegiate and Professional Sports Industry Groups will continue to monitor Acting General Counsel Ohr and any actions he takes while serving in this role. Please feel free to reach out to any to the Jackson Lewis attorneys with whom you work for more information.

UPDATE: NCAA President Recommends Delay In Name, Image and Likeness Vote

By Gregg E. Clifton on

Following receipt of a letter from the United State Department of Justice-Antitrust Division expressing concern about the NCAA’s anticipated vote, NCAA President Mark Emmert has “strongly recommended” to his membership that the NCAA vote currently scheduled for Monday to potentially ratify name, image and likeness (NIL) rights for collegiate student-athletes be delayed.

The much anticipated NIL NCAA legislative vote, expected to be successful and authorize student-athletes to benefit from the commercial use of their name, image and likeness in coordination with the start of the 2021-22 school year, has been the subject of extensive discussion and deliberation throughout most of 2020.

It has been reported that the letter to NCAA President Emmert expressed concern regarding the NCAA’s policies pertaining to collegiate athlete transfers and NIL rules. The Justice Department informed the NCAA that it has been monitoring the NCAA’s ongoing efforts to review and revise the rules in both areas. It is expected that President Emmert’s recommended voting delay will be supported by NCAA membership and further dialogue between NCAA leadership and the Department of Justice will be scheduled and commence in the near future.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the ongoing legal issues relating to NCAA’s effort to pass NIL legislation, as well as continued NIL activity on the federal and state level. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

 

UPDATE: Michigan Joins Growing Number of States Granting Name, Image, Likeness Rights to Collegiate Student-Athletes

By Gregg E. Clifton on

Michigan Governor Gretchen Whitmer’s signature on House Bill 5217 and House Bill 5218 will allow Michigan student-athletes to earn financial compensation from the use of their name, image, and likeness and authorize the hiring and use of attorneys and agents without affecting student-athlete scholarship eligibility.

Michigan now joins California, Florida, New Jersey Colorado, and Nebraska as the sixth state to pass a law protecting the rights of student-athletes to be paid for the commercial use of their name, image, and likeness rights. As with every state name, image and likeness law that has been enacted to date, except the Florida law which will become effective on July 1, 2021, the Michigan law will also have a significantly delayed effective date. The Michigan law will not become effective until December 31, 2022.

Senator Whitmer commented on the new law, “For years we have all enjoyed the incredible talent of young athletes across the state. This legislation will change the lives of young men and women for years to come.” She concluded, “I am hopeful that the NCAA will set a national standard so that all players across the country are afforded the same opportunities.”

Sponsored by State Representative Brandt Iden, a former college tennis player at Kalamazoo College,

House Bill 5217 specifically prohibits post-secondary educational institutions as well as any athletic association, including the NCAA, from enforcing any rules that limit or prohibit student-athletes from profiting from endorsement or promotional agreements.

In addition, the bill protects student-athletes and their ability to play intercollegiate sports and continue to earn athletic scholarships while earning fees for the use of their name, image and likeness.

House Bill 5218, sponsored by State Representative Joe Tate, a former offensive lineman at Michigan State, and signed by Governor Whitmer along with House Bill 5217, specifically repeals a section of the Michigan penal law which prohibits sports agents from inducing student-athletes from entering into contracts while they still have remaining eligibility to participate in college athletics.

While granting the student-athletes the right to profit from the use of their name, image, and likeness and to hire agents to assist in the identification and negotiation of these endorsement opportunities, the Michigan law places certain limitations and obligations upon student-athletes. Prior to entering into any endorsement agreement, the student-athlete must disclose the proposed opportunity to a university-designated official at least seven (7) days prior to committing to the opportunity or contract.

In addition, student-athlete endorsers will be prohibited from entering into an apparel contract and earning compensation if that contract or promotional relationship would be in conflict with any provision of their post-secondary school’s existing apparel contract.

One other limitation placed upon Michigan student-athletes restricts the use of the name, trademarks, service marks, logos, symbols, or other intellectual property of their university in conjunction with the student-athletes use of their name, image or likeness.

Jackson Lewis’ Collegiate and Professional Sports Practice Group will continue to monitor the ongoing name, image, and likeness issues on the federal and state level, as well as the NCAA’s anticipated passing of final rules on name, and likeness later this month. Please feel free to reach out to any member of the Collegiate and Professional Sports Practice Group with questions.

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