The U.S. Supreme Court has declined to review a decision holding that NCAA athletes did not have to be paid beyond the cost of attending college. NCAA v. O’Bannon, Nos. 14-16601, 14-17068 (9th Cir. Sept. 30, 2015), cert. denied, No. 15-1167 (Oct. 3, 2016).

A U.S. district court had decided the NCAA’s use of the names, images, and likenesses of college athletes without compensation violated antitrust laws. It ruled schools could (but are not required to) pay college players up to $5,000 per year. That amount, placed in a trust, would be available to the athletes after leaving college. A panel of the U.S. Court of Appeals for the Ninth Circuit, in San Francisco, overruled the $5,000 holding, but upheld the lower court’s antitrust finding.

The Ninth Circuit said compensation for athletes should be limited to funds related to their education. While the NCAA is not above the antitrust laws, it continued, “the difference between offering athletes education-related compensation and offering them cash sums untethered to educational expenses is not minor.”

Appealing to the Supreme Court, the NCAA claimed the Ninth Circuit antitrust ruling misapplied a 1984 Supreme Court decision, NCAA v. Board of Regents of Univ. of Oklahoma, 468 U.S. 85. It said part of that decision acknowledged that “in order to preserve the character and quality of the (NCAA’s) ‘product,’ athletes must not be paid, must be required to attend class and the like.” Groups advocating for student-athletes wanted the Court to affirm the Ninth Circuit’s refusal “to confer categorical antitrust immunity on the NCAA for what in any other industry would be an unreasonable restraint of trade.”

The effect of the Supreme Court’s denial of review leaves the NCAA susceptible to other ongoing legal challenges, but it also gives the Association time to make changes to blunt such threats. A Supreme Court review of O’Bannon could have further clarified if and to what extent college athletes should be compensated for the commercial use of their names, images, and likenesses and provided guidance on how such compensation could affect Title IX and the federal mandate that male and female college athletes be treated equally. Without such Supreme Court clarification, the Ninth Circuit’s decision stands as favorable precedent for other legal challenges to NCAA amateurism rules, such as the case pending on behalf of former Clemson University football player Martin Jenkins.

In 2014, Jenkins sued the NCAA, alleging the NCAA and its universities and conferences have violated federal antitrust law by conspiring to limit the value of athletic scholarships to tuition, room, board, books, and fees.

The Jenkins action seeks a proposed remedy that would allow schools to compete for star athletes in a “free agent” type system by bidding for the services of those athletes. Student athletes with superior athletic talent would be able to require schools vying for their enrollment to enter into a financial bidding war to convince them to attend their university.

This would be more reflective of a free agency system at the professional sports level than the current amateur athlete recruiting process that provides athletic scholarships.

The Jenkins case is being heard in the U.S. District Court for the Northern District of California, the same court that heard the O’Bannon case. In addition, the ruling federal district court judge in O’Bannon also is presiding over this litigation.

While O’Bannon may have reached its ending after seven years of protracted litigation, other potential actions can still be brought by student-athletes outside of the Ninth Circuit. Different legal interpretations among the circuit courts could bring the issue to the Supreme Court once again.

 

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Photo of Gregg E. Clifton Gregg E. Clifton

Gregg E. Clifton is a Principal in the Phoenix, Arizona, office of Jackson Lewis P.C. He is Co-Leader of the Collegiate and Professional Sports Practice Group and serves as the editor of the firm’s sports law blog.

Mr. Clifton has extensive experience in…

Gregg E. Clifton is a Principal in the Phoenix, Arizona, office of Jackson Lewis P.C. He is Co-Leader of the Collegiate and Professional Sports Practice Group and serves as the editor of the firm’s sports law blog.

Mr. Clifton has extensive experience in the collegiate and professional sports world. He has advised numerous professional franchises on general labor and employment issues, including Title III ADA regulatory compliance and wage and hour issues. He serves as lead counsel for several Major League Baseball teams in their salary arbitration matters and has represented NCAA and NAIA collegiate clients regarding rules compliance, investigatory matters and in disciplinary hearings. In addition, he has handled Title IX investigations and compliance issues for NCAA and NAIA member institutions. Mr. Clifton has also worked extensively in the area of agent regulation and enforcement in professional and college sports and regularly provides counsel on issues relating to NCAA and NAIA amateurism issues and athlete eligibility questions. He has also served as an expert witness in matters involving sports agents’ work and responsibilities, as well as athlete compensation issues.

Prior to joining Jackson Lewis, he spent six years as Chief Operating Officer and Vice President of Team Sports for Gaylord Sports Management. He also served as President of the Athlete and Entertainment Division for famed sports attorney Bob Woolf’s firm, Woolf Associates, in Boston.

Mr. Clifton began his career as an Associate at Jackson Lewis where he focused his practice on traditional labor law. He continues to counsel clients in the areas of collective bargaining negotiations, representation cases, arbitrations and National Labor Relations Board matters.

Mr. Clifton frequently serves as an expert speaker to law schools, including Harvard University, Boston College, Hofstra University and Arizona State University, and bar associations regarding sports law issues, including agent regulation and salary arbitration. He is also often cited as an expert source in national news media for his commentary and opinion on legal issues in sports.