New Federal Legislation Proposal Authorizes Student-Athletes to Unionize

A group of Democratic U.S. Senators, led by Senator Chris Murphy (D-Conn.) and Senator Bernie Sanders (D-Vt.) have introduced the College Athlete Right to Organize Act. The proposed legislation would amend the National Labor Relations Act (NLRA) and provide student-athletes collective bargaining rights, regardless of any existing state law restrictions.

Regarding his proposed legislation, Senator Murphy stated, “Big time college sports haven’t been ‘amateur’ for a long time, and the NCAA has long denied its players economic and bargaining rights while treating them like commodities.” He added,

“That’s why I’m introducing the College Athlete Right to Organize Act, which finally recognizes college athletes as employees and allows athletes to collectively bargain with their colleges and across conferences.

Having the right to do so will help athletes get the pay and protections they deserve and forces the NCAA to treat them as equals rather than second-class citizens.”

This proposal far exceeds the student-athlete rights previously sought and currently covered by the College Athlete Economic Freedom Act (“Freedom Act”), which was introduced by Senator Murphy and U.S. Representative Lori Trahan (D-Mass.). The Freedom Act would protect the name, image and likeness rights of current collegiate student-athletes. Senator Murphy’s proposed legislation provides jurisdiction to the National Labor Relations Board (NLRB) to exercise authority over all institutions of higher education that sponsor intercollegiate sports in relation to collective bargaining and labor disputes.

The latest bill proposes that the definitions of “employee” and “employer” under Section 2 of the NLRA be rewritten and amended to consider any college-athlete who receives a grant-in-aid or other compensation from a college or university to participate in intercollegiate athletics to be an “employee” of the respective college or university, whether a public or private institution.

Student-athletes would be recognized as “employees” of the institution and thereby entitled to exercise the rights of employees guaranteed by the NLRA, including the right to seek redress for alleged violations of those rights by their university “employer” through the NLRB. Those protected rights include, for example, efforts to form a union among members of a sports team, challenging alleged discriminatory or retaliatory conduct by coaches, administrators or others in response to a student-athlete’s protected actions.

According to the bill’s language, this provision only recognizes the employee-employer relationship that its proponents assert already exists between college athletes and their respective colleges or universities, and it helps athletes to successfully organize and collectively bargain over their compensation, hours, working conditions, and other related mandatory subjects of bargaining.

Possible topics of bargaining could include practice time, dates and content, travel accommodations, overtime compensation and team rules. Unionized student-athletes would, of course, also have the right to engage in a strike or other job action.

While far exceeding the anticipated granting of name, image and likeness marketing rights for student-athletes, the proposed bill seeks to introduce of a specific “pay for play” process, authorizing student-athletes to negotiate for specific compensation and benefits for playing their sport.

Senator Sanders commented on his proposal,

“College athletes are workers. They deserve pay, a union, and to own their own name, image, and likeness. We cannot wait for the NCAA to share its billions with the workers who create it.”

While treating athletes as employees, the bill would seek to exempt them from paying income and payroll taxes for the scholarship, grant-in-aid or other money they receive from the institution. The bill provides that “nothing in this Act shall change the current tax status and treatment of any compensation college athletes receive, otherwise create additional tax burdens that do not currently exist due to an athlete being considered an employee, or affect college athletes’ federal financial aid status as well as any current reporting requirements within the Internal Revenue Code.” It is unclear if the institution would have to make social security, Medicare or other payments on behalf of its new employees to exempt them from paying income and payroll taxes for the scholarship, grant-in-aid or other money they receive from the institution.

The proposed College Athlete Right to Organize Act would also authorize the NLRB to recognize the creation of multi-employer bargaining units composed of student-athletes from multiple schools within a single conference. This would allow student-athletes from various schools to join together to negotiate collective bargaining agreements to “establish uniform rules and standards related to compensation, hours, working conditions, and other related mandatory subjects of bargaining.”

This NCAA said the Murphy-Sanders bill would “directly undercut the purpose of college: earning a degree.” It added that “turning student-athletes into union employees is not the answer.”

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.

15-Year-Old Soccer Star Granted Temporary Restraining Order on National Women’s Soccer League Age Rule

Soccer phenom, 15-year-old Olivia Moultrie has been granted a Temporary Restraining Order (TRO) in her challenge to the National Women’s Soccer League’s (NWSL) Age Rule. The league’s Age Rule requires players to be at least 18 years old to compete for a position on a NWSL team. United States Court Judge Karin J. Immergut granted the TRO on May 24, 2021, after written and oral arguments. In her opinion, Judge Immergut wrote,

“Given the information in the record at this time, this Court finds that Plaintiff has shown that the law and facts clearly favor her position that the NWSL’s Age Rule violates § 1 of the Sherman Act.”

Moultrie sued the NWSL on antitrust ground, arguing the league’s Age Rule violates the Sherman Antitrust Act, 15 U.S.C. §1, because “the ten teams that make up the NWSL have agreed among themselves, and with the League, not to contract with soccer players under the age of 18, without regard to their talents or ability to compete in the League.” As the only option available to women to play professional soccer in the United States, she argued, the Age Rule serves no legitimate business justification or procompetitive purpose.

Judge Immergut’s ruling effectively allows Moultrie to compete for a position on a NWSL team. The Judge agreed with Moultrie that the NWSL’s Age Rule

“excludes female competitors from the only available professional soccer opportunity in the United States because they are under 18, regardless of talent, maturity, strength, and ability.”

She also found the NWSL failed to offer any “legitimate procompetitive justification for treating young women who want an opportunity to play professional soccer differently than young men.”

An injunction was necessary, Judge Immergut stated, because the NWSL’s Age Rule irreversibly impedes Moultrie’s development as a soccer player and each day the Age Rule stays in place “represents a missed opportunity for [Moultrie’s] professional soccer career.”

When she was 13, Moultrie was already practicing and scrimmaging with the Portland Thorns (a NWSL team) when she signed a nine-year endorsement deal with Nike in 2019. In support of Moultrie’s Motion for a TRO, Portland Thorns’ player Becky Sauerbrunn stated that keeping Moultrie out of the NWSL would slow her development, delay her improvement, and impede her finite career. The Judge also commented that, with the Olympic Games this summer, there would be additional NWSL roster spots open and Moultrie would “receive even more meaningful playing time if the Age Rule is lifted promptly.”

Judge Immergut rejected the NWSL’s “single-entity defense,” that the NWSL is exempt from Section I of the Sherman Antitrust Act. She also rejected the argument that, if the Age Rule is lifted, NWSL’s expenses will skyrocket because it will have to establish guidelines to account for the presence of minors. Even though Moultrie already utilizes the Thorns’ locker room facilities and travels with the team to scrimmages, the NWSL did not offer any estimate of these expected increased expenses.

Importantly, the Judge emphasized that this decision does not lend itself to young players who want to challenge the age eligibility rules in the WNBA, MLB, NBA, NHL, and NFL, leagues that operate under collective bargaining agreements.

Unlike other professional leagues, the NWSL’s Age Rule is not the result of a negotiated collective bargaining agreement between the NWSL and its players’ association.

While the League argued that the age restriction should be exempt from anti-trust law scrutiny because the league has recognized the National Women’s Soccer League’s Players Association and commenced negotiations on the terms of a collective bargaining agreement, Judge Immergut held that the commencement of negotiations of a collective bargaining agreement is not the same as an Age Rule that is contained in an actual  negotiated agreement. Judge Immergut agreed with Moultrie and distinguished an age restriction that is negotiated and contained in an existing collective bargaining agreement from the league’s self-imposed Age Rule which has not been bargained for between the parties.

While the TRO is set to expire in 14 days (June 7), the Judge’s ruling implies this injunction will last much longer and Moultrie wi have an opportunity to finally compete in the NWSL.

Jackson Lewis’ Sports Industry Group will continue to monitor this case as it progresses. Please feel free to reach out to any member of our Industry Group with questions.

 

Maryland Adds Athlete Safety Provision As It Joins Growing List Of States To Enact Name, Image, And Likeness Law

Maryland Governor Larry Hogan has signed the Jordan McNair Safe and Fair Play Act into law. Beginning in 2023, the Act authorizes student athletes at Maryland colleges and universities to receive compensation for their name, image, and likeness (NIL) and retain agent representation without penalty to the student athlete’s eligibility or participation in intercollegiate competition.

Student athletes are required to disclose any NIL contract in which they enter to their school. A student athlete’s NIL contract cannot conflict with the school’s athletic program contracts. Schools are not required to disclose conflicting provisions of its contracts. Student athletes are also prohibited from using their school’s name and logos to market the student athlete’s individual NIL rights.

Named after former University of Maryland football player Jordan McNair,

the Act also requires Maryland schools to adopt safety guidelines for serious sports-related and preexisting health conditions.

In 2018, McNair collapsed after an offseason workout and died soon after. McNair’s death led to investigations into the University of Maryland and its athletic program. Unlike the delayed implementation of its NIL provisions, the Act’s safety requirements go into effect July 1, 2021.

Although introduced to be fully effective this year, the Act was amended to delay its NIL provisions until 2023 after the University System of Maryland Board of Regents raised concerns about the Act’s potential conflict with proposed rule changes by the National Collegiate Athletic Association (NCAA) and federal legislation. Maryland is home to fifty-five institutions that compete at various NCAA divisions.

After failing to pass NIL legislation in prior legislative sessions, Maryland joins nine other states that have enacted NIL laws during this legislative cycle including Alabama, Arizona, Arkansas, Georgia, Mississippi, Montana, New Mexico, South Carolina, and Tennessee. Six other states, California, Florida, Colorado, Nebraska, New Jersey, and Michigan, previously enacted NIL provisions.

Louisiana, Missouri, and Texas have NIL legislation still making its way through each state’s legislative process, with Missouri’s bill approved and sent to Governor Mike Parson on May 14. A number of other states have had NIL legislation introduced. To date, almost one-third of all schools competing in the NCAA will permit its student athletes to receive NIL compensation. At least five states authorize NIL compensation beginning July 1 of this year.

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 Collegiate and Professional Sports Practice Group with questions.

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

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

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

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

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

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

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

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.

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