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.