Tennessee Senator Marsha Blackburn (R) and New Jersey Senator Cory Booker (D) have reintroduced the “NCAA Accountability Act.”  This follows multiple hearings held over the past few years on NCAA operations, including how the NCAA handles investigations and enforcement of its bylaws.

The bipartisan bill seeks to enhance due process protections for intercollegiate athletic programs under investigation for potential rule violations by the NCAA. Under the proposed legislation, investigations by the NCAA Enforcement staff would involve greater transparency, expediency, and consistency. Because of the increase of name, image, and likeness (NIL) arrangements and their use as a recruiting tool, combined with several states passing their own NIL-related legislation, there are many questions and concerns about the NCAA’s parameters and protocols for conducting investigations and how penalties are imposed by the NCAA Infractions Committee, especially in the context of NIL-related recruiting violations.

NCAA Accountability Act: Key Proposals

The bill calls for the NCAA to expedite investigations in a consistent manner:

  • Under the bill, the NCAA must complete the investigation within a one-year period after providing notice to the institution of an alleged infraction.
  • The bill imposes a limitation period, barring the NCAA from investigating alleged violations that may have occurred beyond two years from the date notice was sent to the school.

Arbitration as a potential remedy for dispute resolution:

  • If there is a dispute over the NCAA’s recommendation for punishment, the member universities may compel arbitration.
  • Arbitration must be conducted by a three-person panel. The arbitrators will provide an independent review and binding decision.

The Attorney General can ask NCAA for reports about investigations:

  • The Attorney General can direct the NCAA to submit an annual report to the Department of Justice summarizing its enforcement proceedings.  The NCAA must also submit separate reports to each state’s attorney general summarizing its interactions with member universities headquartered in their respective states.
  • The bill provides the Department of Justice reasonable access to examine evidence of any person or covered athletic association being investigated.

While it is unlikely to pass in an election year, ultimately, the bill seeks to generate increased fairness, uniformity, and transparency in the NCAA’s process for investigating and litigating potential rule violations.

Jackson Lewis’ Collegiate Sports Industry Group is available to assist universities, conferences, or other stakeholders in dealing with infractions investigations, hearings, appeals, and other matters involving alleged violations of NCAA bylaws.

The U.S. Department of Justice, alongside the District of Columbia and states of Mississippi, Virginia, Minnesota, joined seven other states in their antitrust challenge against the NCAA’s transfer eligibility rule.

The rule blocks some student-athletes from immediately competing after transferring between colleges and has been a recent source of contention in the world of college athletics.

In December, a federal district court held the rule likely violated the Sherman Antitrust Act and temporarily suspended its enforcement for 14 days.  Soon after, the NCAA agreed to suspend enforcement of the rule through the end of the 2023-24 season, ensuring that all winter and spring transfer athletes are eligible to complete while the suit is pending.

The NCAA argues that the ending the rule would upend the amateur nature of college athletics, replacing it with “a system of perpetual and unchecked free agency.”  The plaintiff states argue the rule illegally restrains college athletes’ ability to engage in the labor market, monetize their image and likeness, and control their education.

The lawsuit is now backed by the federal government, the nation’s capital, and the attorneys general of 10 individual states.  This diverse coalition, representing a variety of geographical regions and political leanings, appears to signal a formidable alignment against the NCAA’s transfer eligibility rule.

Please contact the attorneys in the Jackson Lewis Sports industry group with any questions.

NCAA President Charlie Baker penned a letter to student-athletes, asking for feedback on his proposal to allow Division I (D-I) schools to pay student-athletes directly.

In the December 19 letter, Baker emphasized that schools and student-athletes need to partner with Congress in seeking a federal law with an antitrust exemption preventing college athletes from being considered employees of the schools they attend.  He encouraged student-athletes to join the conversation, stressing the importance of their voices in shaping the future of college sports.

Earlier this month, Baker proposed a new system, a significant departure from the current NCAA structure.  The novel proposal centered around allowing D-I schools to directly compensate athletes through an enhanced educational trust fund and creating a new D-I football subdivision for schools that choose to participate.  The proposed educational trust fund would pay at least $30,000 annually to half of the institution’s eligible student-athletes.  The proposal intends to enable D-I schools to provide financial support directly to athletes, addressing concerns related to name, image, and likeness (NIL) opportunities and NIL collectives.  Under the plan, Baker envisions an in-house revenue-sharing mechanism to handle NIL, reducing the role of third-party collectives. 

With the NCAA facing potentially existential threats from ongoing litigation, Baker’s proposal aims to balance liberating major conference programs with avoiding a complete breakaway from the existing NCAA structure.  In the letter, Baker notes that the proposed changes will enhance opportunities for all D-I student-athletes and promote gender equity, as schools must adhere to existing regulations in their athletic program investments.  He emphasized the importance of flexibility for colleges and universities and for the NCAA to adapt to the evolving landscape of college sports. 

However, while Baker argues that this plan enhances financial opportunities for all D-I student-athletes, critics raise questions about the impact on Title IX compliance, the potential reduction of Olympic sports, the widening gap between major conferences and others, and the potential consequences for student-athletes in non-revenue sports.  Baker acknowledges that the proposed model challenges traditional notions of amateurism, aiming to offer student-athletes a fair share of the financial benefits associated with their skills and institutional value.  He encourages a shift toward more flexible rules and frameworks across the NCAA that prioritize student-athletes’ well-being.

The letter also discusses the NCAA’s ongoing “endless legal challenges,” acknowledging lawsuits like Johnson v. NCAA and In Re College Athlete NIL Litigation, which collectively demand significant compensation for college athletes.  Undoubtedly, Baker recognizes the significance of litigation over athlete compensation.

Baker’s letter serves as a call to action, urging student-athletes to engage in the conversation and partner with the NCAA in directing the future of college sports.  It signals a significant shift in the NCAA’s approach to compensation and regulation, aiming to find a middle ground between the interests of major conferences and the overall stability D-I sports.  The future of college athletics hangs in the balance, with potential consequences for student-athletes, universities, and the structure of the NCAA itself.

The Jackson Lewis Sports Industry group represents colleges and universities involved in NCAA infractions investigations, waiver requests, NIL issues, and other matters.

A federal court ruling has forced the NCAA to suspend its transfer eligibility rule, bringing temporary relief to college athletes seeking to transfer schools without sitting out a year of competition.

The rule, which requires certain Division I athletes who transfer schools to defer a year of competitive eligibility, was challenged in a federal lawsuit filed by several U.S. states. The states allege the rule violates Section 1 of the Sherman Antitrust Act and harms student-athletes in the market for their athletic services.

On Dec. 13, 2023, U.S. District Judge John Preston Bailey issued a temporary restraining order (TRO), preventing the NCAA from enforcing the transfer eligibility rule until a hearing scheduled for Dec. 27. The hearing will determine whether Judge Bailey issues a preliminary injunction, which could suspend enforcement of the rule until the lawsuit is resolved.

The Ruling Explained

In granting the TRO, Judge Bailey found the seven states were likely to prove that the transfer eligibility rule violates the Sherman Act.

Judge Bailey wrote that the rule brings three primary harms to college athletes. First, the rule imposes a one-year ineligibility penalty that may discourage student-athletes from transferring even when another school better suits their academic, mental, or economic well-being.

Second, transferring student-athletes face a competitive disadvantage because many schools may hesitate to offer scholarships to athletes who will not be eligible immediately.

Third, the rule hinders student-athletes’ economic opportunities by limiting their ability to secure name, image, and likeness (NIL) endorsement deals and restricting their exposure to professional sports leagues.

Judge Bailey also noted that the inability to play their respective sports negatively affects athletes’ mental health.

Judge Bailey cited the examples of Southern Illinois University football transfer Noah Fenske and West Virginia University basketball transfer RaeQuan Battle, both of whom missed all or portions of their respective seasons. He wrote that the rule impeded Fenske’s and Battle’s ability to pursue NIL money, harmed their professional prospects, and may have detrimentally affected their mental health.

Impact of the Ruling

Following the ruling, the NCAA announced it would comply with the court’s decision by suspending enforcement of the transfer eligibility rule. Consequently, athletes previously affected by the rule are immediately eligible to return to competition, at least until the Dec. 27 hearing.

This decision is a significant, yet controversial, development in the world of collegiate athletics. While some feel that permanent elimination of the transfer eligibility rule would be progress for the rights and opportunities of college athletes, others fear its demise will lead to unrestricted free agency and signal the end of amateurism in college sports.

Please contact the Jackson Lewis Collegiate & Professional Sports industry group with any questions.

The National Collegiate Athletic Association (NCAA) faces a new legal challenge as seven U.S. states have filed a federal lawsuit alleging the NCAA’s student-athlete transfer eligibility rule violates U.S. antitrust law.

Transfer Eligibility Rule

NCAA rules currently permit undergraduate college athletes to transfer once with immediate eligibility to compete at their new university. However, subsequent transfers require the athlete to sit out a year of competition, unless the NCAA grants the athlete a discretionary waiver. Waiver requests are evaluated on a case-by-case basis and are granted infrequently.

The rule ostensibly aims to safeguard the amateur nature of college sports by dissuading universities from “poaching” each other’s athletes. In practice, it discourages athletes from transferring between schools.

Antitrust Allegations

In the new lawsuit, the state attorneys general of Ohio, Colorado, Illinois, New York, North Carolina, Tennessee, and West Virginia argue that the transfer eligibility rule violates Section 1 of the Sherman Antitrust Act, which prohibits agreements that unreasonably restrain market competition.

The state attorneys general argue that the transfer rule effectively constitutes an illegal agreement between the NCAA’s member schools to artificially restrain college athletes’ ability to participate in the market for their labor. Additionally, they assert that, by discouraging athletes from finding ideal matches with schools and imposing a one-year eligibility loss on those who transfer, the rule harms the future earning potential of college athletes.

The attorneys general seek a permanent injunction blocking enforcement of the transfer rule.

Growing Opposition to NCAA’s Policies

This lawsuit is the latest in a barrage of legal attacks against the NCAA. In 2021, the U.S. Supreme Court ruled that NCAA rules restricting education-related compensation and benefits for athletes violated the Sherman Act. Other lawsuits brought on behalf of athletes against the NCAA are pending.

The lawsuit signifies a new willingness by elected officials of both political parties to champion their states’ student-athletes against the NCAA. Shortly before joining the lawsuit, North Carolina Attorney General Josh Stein, a Democrat, penned a letter to the NCAA opposing its denial of a transfer waiver for University of North Carolina football player Devontez “Tez” Walker. The NCAA later reversed its decision and granted Walker a waiver. Similarly, Virginia Attorney General Jason Miyares, a Republican, plans to write the NCAA objecting to its denial of a waiver for Virginia Commonwealth University basketball transfer Joe Bamisile. Virginia has not yet joined the federal lawsuit.

While the outcome of the suit filed by the state attorneys general is uncertain, one thing is clear: there is a noticeable surge in bipartisan opposition and judicial skepticism toward the NCAA’s policies governing college student-athletes. The NCAA faces considerable pressure to enact significant policy changes, pointing toward an imminent transformation in the landscape of college athletics.

Please contact the Collegiate & Professional Sports industry group with any questions.

NCAA President Charlie Baker has advanced the idea of giving universities and colleges (with the most-resourced athletic departments) the option to pay student-athletes. The emergence of national, image, and likeness (NIL) deals are exerting increasing influence on the landscape of collegiate athletics (and growing the disparities between the have and have-nots of college universities). In a stunning move, the NCAA sent a letter to more than 350 college and universities presenting rule changes to allow member schools to enter into NIL deals directly with their student-athletes. The NCAA proposes to create a new subdivision, covering all sports, where the richest athletic departments can operate differently than the rest, while still competing with the rest of Division I universities.

Although not fully fleshed out yet, the proposed subdivision would follow certain parameters:

  1. To be a part of that subdivision, each school would have to put millions of dollars each year into a trust fund for athletes. The schools would be required to set aside a minimum of $30,000 per athlete for at least half of their athletes annually.
  2. The trust fund would not be tethered to educational resources and there would be no cap on the funds provided to the trust fund. An athlete would not need to finish their degree before they access that money.
  3. The subdivision will create its own set of rules for recruiting, transfers, roster size,
    and a wide range of other policies.
  4. The subdivision would have to continue to follow Title IX rules and allocate 50
    percent of the investment toward women’s sports.
  5. The member schools would have to vote to adopt the changes. The schools would be allowed to determine whether to opt in or out individually.

Broader Implications
The proposal allows certain Division I athletes to be paid directly through a trust fund. If the member schools adopt this model, the practice of compensating student-athletes seemingly will bolster the National Labor Relations Board’s expressed position that student-athletes are statutory employees. In May 2023, the Board filed a complaint against the University of Southern California, the Pac-12 Conference, and the NCAA, alleging their failure to use the term “employee” to refer to student-athletes in the university’s student-athlete handbook and related social media policies intentionally discourages student-athletes from exercising their alleged Section 7 rights as employees under the National Labor Relations Act, particularly the right to organize a union, join a union, or engage in protected concerted activity, among other rights. In light of this new proposal, combined with ongoing litigation to classify college athletes as statutory employees of their university for purposes of protections under labor laws, reform is a afoot in college athletics, so universities and college should consider taking steps now to educate and protect themselves against unfair labor practice charges.

Jackson Lewis’ Sports Industry Group is available to assist universities, conferences, or other stakeholders in dealing with matters before the Board, on NCAA infractions matters, or otherwise involving the appropriate classification of student-athletes.

November 7, 2023, may become a monumental day in the history of the National Collegiate Athletic Association (NCAA). It is the first day of a potentially groundbreaking hearing. Region 21 of the National Labor Relations Board will be hearing a case brought by members of the football, men’s basketball, and women’s basketball teams against the University of Southern California (USC), the PAC-12, and the NCAA. The crux of their argument is that the three major entities should be considered “joint employers” who have systematically misclassified the players as “student-athletes” rather than as employees.

The implications of this Board hearing could have far-reaching implications across the country. The NLRB General Counsel Jennifer Abruzzo has already signaled that, in her opinion, certain players at colleges and universities should qualify as employees of their institutions. If the administrative law judge were to agree with Abruzzo’s opinion, the impact on the national landscape of collegiate athletics would be immediate.

If these players are found to be employees, each player would be entitled to the benefits of traditionally employed individuals, such as compensation, overtime, social security, worker’s compensation, health and safety protections, protections against discrimination and harassment, and a statutory right to unionize and collectively bargain for a share of collegiate sport revenues.

While being found to be employees would be looked at as a major win for the impacted players, such a determination would cause complicated issues for colleges and universities across the country. These issues include compliance with Title IX of the Education Amendments of 1972 and the Immigration Nationality Act, among others. Further, having some teams but not others qualify likely will create a two-tier system throughout the country. This divide would be even further enhanced if the Board finds certain players, but not others, qualify as employees.

Testimony will not be heard until the week of December 18, at the earliest. Higher education institutions, players, and fans alike will be monitoring this hearing as it progresses.

Jackson Lewis’ Collegiate and Professional Industry Group is available to assist universities, conferences, or other stakeholders in dealing with matters before the Board or otherwise involving the appropriate classification of student-athletes.

An uncommon combination of three U.S. Senators, Sens. Richard Blumenthal (D-Conn), Jerry Moran (R-Kan.) and Cory Booker (D-NJ), collaborated to draft “The College Athletes Protection & Compensation Act” (the Act), which is the newest legislative proposal in the evolving name, image and likeness (NIL) area of college athletics.

Several other federal NIL legislation proposals have already been put forward (e.g., Tuberville and Manchin Federal NIL Proposal) and various states have also passed conflicting NIL laws (e.g., New York’s NIL Law). As a result, Senators Blumenthal, Moran and Booker are undertaking the responsibility of providing clarity and consistent NIL standards with the draft Act which comes at an important time before federal lawmakers leave for their summer break. 

Establishment of the College Athletics Corporation

Significantly, the Act includes the creation of the College Athletics Corporation (CAC), which would:

  • Establish best practices, rules and investigatory processes and bring actions to enforce the Act;
  • Enforce standards for reviewing and certifying endorsement contracts entered by college athletes;
  • Establish formal certification processes for athletic representatives;
  • Provide recommendations to higher education institutions on how to protect college athletes from unscrupulous athletic representation;
  • Investigate disputes with respect to agency and endorsement contracts and provide college athletes with swift processes for resolving these disputes; and
  • Ensure higher education institutions and covered athletic organizations comply with agency and endorsement contract rules set forth by the CAC.

CAC’s Board of Directors would consist of 15 voting members. Out of these 15 voting members, at least one-third must be current or former college athletes, and at least 20 percent must be actively engaged in college athletic events or engaged in college athletic events during the 10 years preceding the appointment to the Board of Directors.

Additionally, the Act would grant the CAC subpoena power. States that bring actions on behalf of their residents to enforce compliance with the Act would also be required to provide written notice to CAC prior to filing an action and provide a copy of the legal complaint. After receiving written notice, the CAC would have the power to intervene in these actions and the ability to remove such actions from state court to the relevant federal district court.

Protections for College Athletes

The Act would require various protections for college athletes, including:

  • Higher education institutions must provide college athletes with a list of rules governing endorsement contracts;
  • Within seven days of entering into an endorsement contract, college athletes must provide a copy to their higher education institution;
  • College athletes cannot be punished for entering into a professional sports draft if they do not receive compensation from relevant professional organizations and declare within seven days after entering into a professional draft their intent to resume participation in college athletic competition;
  • Athletic associations must not discriminate on the basis of sex and provide non-discriminatory access to athletic facilities; and
  • Higher education institutions must disclose information to college athletes involving grant-in-aid; provided medical coverage; whether disability insurance is provided; revenues and expenditures; average hours spent in college athletic competition; college athletic compensation by athletic program; and academic outcomes, majors and endorsement value statistics for college athletes by program, race, ethnicity and gender.

Medical Expenses and Trust Fund

The Act also specifies requirements for higher education institutions regarding medical benefits to current and former college athletes. For medical care, higher education institutions with at least $20 million in athletic revenue would be required to cover student-athlete medical expenses for at least two years after their final competition, and those with at least $50 million would be required to cover expenses for at least four years after the final competition. Further, the Act would create a medical trust to cover long-term injuries not supported by higher education institutions requiring institutions with revenues of at least $50 million to contribute annually to the fund.

Impact

The Act seems to be one step closer to the federal government implementing a standardized NIL law, which is supported by the NCAA. It could also lead to a legal battle with any conflicting state laws.  Higher education institutions should continue monitoring both federal and state legislation as the NIL environment evolves.The Jackson Lewis Collegiate and Professional Sports Industry group is well-versed in NCAA issues and continues to analyze ongoing developments in the area. Please contact a Jackson Lewis attorney with any questions regarding NCAA and any other collegiate and professional sports developments.

The NCAA has announced a new set of guidelines designed to address the evolution of legalized sports gambling while protecting the sanctity of college sports and athletes.

“The new NCAA guidelines … recogniz[e] that college athletes may stumble and make mistakes along the way, but they should be granted the opportunity to learn and grow from their experiences.”

The rise of sports wagering has prompted the need for effective regulation to ensure fairness and integrity amongst athletic institutions at professional and collegiate levels. Additionally, there has been a growing concern over the increasing number of young adults engaging in sports wagering nationwide. A recent survey conducted by the NCAA found that 67% of college students living on campus have engaged in at least one sports betting activity. A recent survey conducted by the NCAA found that 67% of college students living on campus have engaged in at least one sports betting activity.

The new NCAA guidelines focus on enforcing stringent policies and preserving the integrity of competition in college sports while recognizing that college athletes may stumble and make mistakes along the way, but they should be granted the opportunity to learn and grow from their experiences.

Applying to all wagering-related violations reported on or after May 2, 2023, the new rules enforce a potential permanent loss of collegiate eligibility for those college athletes who engage in various prohibited activities such as engaging in activities to influence game outcomes, betting on their own games, betting on other sports within their school, or knowingly providing information with individuals engaged in sports betting. The guidelines also provide:

  • If a student-athlete wagers on their own sport at another school, education on sports wagering rules and prevention will be required as a condition of reinstatement, and the loss of 50% of one season of eligibility will be considered.
  • For all other wagering-related violations (e.g., wagering on professional sports), cumulative dollar value of the wagers will be taken into consideration with the following terms for reinstatement:
    • $200 or less: sports wagering rules and prevention education.
    • $201-$500: loss of 10% of a season of eligibility, plus rules and prevention education.
    • $501-$800: loss of 20% of a season of eligibility, plus rules and prevention education.
    • Greater than $800: loss of 30% of a season of eligibility, plus rules and prevention education.

Moreover, NCAA reinstatement staff are instructed to consider whether additional loss of eligibility, including permanent ineligibility, is necessary for cumulative wagering activities that significantly exceed $800.

Prior to the legalization of sports wagering, reinstatement guidelines called for college athletes who wagered on sports at any level, in most cases, to lose one full season of collegiate eligibility. Under the new guidelines, the NCAA aims to modernize in light of the reality that many states have legalized sports wagering and made it accessible online. It conveys a strong message that such behaviors will not be condoned, even in regions where sports gambling has been legalized, but recognizes a sliding scale and flexibility is appropriate.

The NCAA acknowledges the potential for personal growth and learning from mistakes. Thus, the guidelines also implement reinstatement policies for less serious gambling activities. To become eligible for reinstatement, athletes subjected to penalties will have to complete an educational program on sports wagering rules and prevention. 

Ultimately, the new NCAA guidelines are designed to keep up with the times while upholding the values that make collegiate sports an integral part of the American sporting landscape. As sports wagering continues to evolve, colleges and students should adhere to and become familiar with these new guidelines.

Jackson Lewis’ Sports industry group provides training sessions for college coaches and student-athletes on sports wagering and other issues and advises university athletics departments concerning rules violations and infractions matters.

Changes to New York’s name, image, and likeness (NIL) law redefines “student-athlete” and limits the National Collegiate Athletic Association’s (NCAA) authority. The changes under NY Bill No. A07107B are effective immediately.

Updates to NIL Law

The definition of “student-athlete” has been expanded to include an individual who has completed at least their sophomore year of high school or inter-national equivalent and is eligible, or may in the future be eligible, to attend a college and participate in intercollegiate athletics. Previously, the law covered only a student enrolled at a college and participating in intercollegiate athletics.

Along with expanding the scope of who is covered in NIL, the new law prohibits an athletic association, conference, or other group or organization with authority over intercollegiate athletics, including, but not limited to, the NCAA, from:

  • Preventing colleges from identifying, facilitating, enabling, or supporting opportunities for a student-athlete to earn compensation for the student-athlete’s name, image, or likeness;
  • Entertaining a complaint, opening an investigation, or taking any other adverse action against a college for engaging in any activity related to a student-athlete’s NIL;
  • Restricting a college from participation in intercollegiate athletics because a student-athlete has or intends to earn NIL compensation; or
  • Penalizing a college from participation in intercollegiate athletics because an individual or entity whose purpose includes supporting or benefitting the college or its athletic programs or student-athletes violates the collegiate athletic association’s rules or regulations with regard to a student-athlete’s NIL.

Comparison to Proposed Federal Legislation

The New York law contradicts proposed federal NIL legislation (seeDraft Bill on Name, Image, and Likeness: Uniform Standard Contract, Medical Trust, NCAA Authority). The state’s NIL law is at odds with the federal bill as it limits the extent of NCAA authority to oversee the NIL process.

To bring nationwide uniformity to NIL laws, Senators Tommy Tuberville (R-Ala.) and Joe Manchin (D-W.Va.) proposed federal legislation that, among other things, would grant the NCAA authority in overseeing compliance with NIL and proposed NIL contracts. The federal proposal states that any violation would be considered a violation of the Federal Trade Commission Act.

Impact

New York’s NIL law is just one of many state laws popping up around the country trying to create parameters for student-athletes, the NCAA, and governing bodies, as well as any contracting businesses seeking to utilize NIL. Many of these laws, including New York, are in a standoff with the NCAA regarding its authority over NIL. Federal legislation may address this conflict in the future. For now, states will continue to establish their own rules for NIL contracts. Colleges and universities should monitor both state and federal legislation as the NIL environment continues to evolve.

The Jackson Lewis Collegiate and Professional Sports Industry group is well-versed in NCAA issues and continues to analyze ongoing developments in the area. Please contact a Jackson Lewis attorney with any questions regarding NCAA and any other collegiate and professional sports developments.