Wake Forest Law Review
5Mar

Are College Athletes Employees?  Unpacking the NLRB’s Decision in Trustees of Dartmouth College

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By William Gilchrist

The NCAA is currently facing the latest challenge to its amateur athlete model from the National Labor Relations Board (“NLRB”), which recently found that members of the Dartmouth men’s varsity basketball team are “employees” under the National Labor Relations Act (the “Act”).[1]  The decision, which has been described as “the first step to potential employee status for college athletes,” comes at a time when the NCAA and universities across the United States are facing growing calls to treat athletes as employees.[2]

On February 5, 2024, Regional Director Laura Sacks released a Decision and Direction of Election in Trustees of Dartmouth College, finding that because “Dartmouth has the right to control the work performed . . . and because the players perform that work in exchange for compensation, the petitioned-for basketball players are employees within the meaning of the Act.”[3]

I. The NLRB

The NLRB is an independent federal agency tasked with enforcing the Act, which protects the right of private sector employees to join together to improve wages and working conditions.[4]  The NLRB’s responsibilities are carried out by a general counsel and five-member board, both of whom are appointed by the President.[5]  

Collective bargaining is one of the key rights granted by the Act, and employees have the right to petition the NLRB for a determination of who will represent them.[6]  Parties may file three types of petitions with the NLRB to determine whether an individual may represent a group of employees.[7]  An RC petition, like the one filed in Trustees of Dartmouth College, is generally filed by a union seeking to be certified as a group of employees’ bargaining representative.[8]

Once the petition is filed, a regional director will conduct an investigation and hold a formal hearing.[9]  The regional director will then issue a dismissal or decision directing election that may be appealed to the Board through a request for review.[10]  If the Board grants the request, it will issue a decision affirming, modifying, or reversing the action of the regional director.[11]

II. Trustees of Dartmouth College

Trustees of Dartmouth College involves an attempt by Service Employees International Union, Local 560 (the “Union”) to represent the fifteen players on the Dartmouth men’s varsity basketball team.[12]  As the exclusive representative of certain Dartmouth employees since 1966, the Union has negotiated several collective-bargaining agreements on behalf of employees with Dartmouth.[13]  These negotiated agreements are subject to final approval by the entire bargaining unit and typically involve employee wages, hours of work, and other issues.[14]

As a private university and member of the Ivy League, Dartmouth argues that the Union’s petition should be denied because the players are not employees, and the Board’s assertion of jurisdiction will create instability in labor relations.[15]  However, after evaluating each side’s arguments, Regional Director Laura Sacks ultimately concluded that the players are employees and that asserting jurisdiction would not create instability in labor relations.[16]

In reaching her decision, Director Sacks looked to the common-law definition of employment cited in Columbia University,[17] which “generally requires that the employer have the right to control the employee’s work, and that the work be performed in exchange for compensation.”[18]  Director Sacks also noted that the players perform work that benefits Dartmouth by generating alumni engagement, financial donations, and publicity, all resulting in increased student interest and enrollment applications.[19]

Despite an agreement among Ivy League schools not to provide athletic scholarships,[20] Dartmouth still provides significant financial benefits to its players in return.[21]  These benefits include a streamlined admissions process, tickets to games, meals, lodging, equipment and apparel, and a “Peak Performance” program designed especially for varsity athletes.[22]

The university also exercises control over the players by “designing and monitoring their summer workouts, requiring them to sign handbooks and other documents, dictating the time they spend practicing, directing those practices, and scheduling their road trips such that each meal and sleep period occurs at the coaching staff’s discretion.”[23]  Dartmouth’s significant exercise of control over the players’ work, combined with the substantial benefits it provides to the players, was ultimately enough to overcome the lack of receipt of traditional compensation in the form of a weekly paycheck or scholarship.[24]

Lastly, while there was some debate about whether the Dartmouth men’s varsity basketball team is profitable,[25] these concerns were dismissed on the grounds that “the profitability of any given business does not affect the employee status of the individuals who perform work for that business.”[26]

III. Implications outside of the Ivy League

While the decision remains a key first step in recognizing college athletes as employees, its implications for athletes in other conferences remain unclear.[27]  The Board’s decision in Northwestern University,[28] a similar case evaluating the employee status of college athletes, has the potential to limit the application of Trustees of Dartmouth College outside the Ivy League.[29]

In Northwestern University, the Board declined to assert jurisdiction over the Northwestern football team.[30]  Unlike Dartmouth, Northwestern is the only private university in its conference and one of only seventeen private institutions in the Football Bowl Subdivision (FBS), which was comprised of 125 schools at the time.[31]  Due to the “inherent asymmetry of the labor relations regulatory regimes applicable to individual teams[,]” the Board declined to assert jurisdiction in Northwestern University after concluding that doing so “would not promote stability in labor relations.”

Following the Board’s ruling in Northwestern University, the NLRB is unlikely to exercise jurisdiction over teams in conferences with a significant public-school presence.  However, as NCAA conferences continue to undergo dramatic restructuring,[32] the potential impacts of the Board’s decision are subject to change.

Although the recent decision in Trustees of Dartmouth College is a critical first step towards recognizing athletes as employees, the case is still ongoing.  An election for the players to vote on representation by the Union is currently scheduled for March 5, 2024.[33]  However, Dartmouth opposed the election on February 29th, filing a Request for Review and Emergency Motion to Stay the Election or Impound the Ballots.[34]  As a result, Dartmouth will likely appeal the decision regardless of whether the election occurs on March 5th, leaving athletes’ employee status uncertain for the foreseeable future.

[1] Decision and Direction of Election at 2, Trustees of Dartmouth College, 01-RC-325633, (NLRB Feb. 5, 2024).

[2] Ralph D. Russo, Billions in TV revenue, athletes as employees on the line as college sports faces more legal threats, AP News (Oct. 16, 2023, 10:14 PM), https://apnews.com/article/college-athletes-nil-eb702d33a87bca98084ea492eccdf84c.

[3] Decision and Direction of Election at 2, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2023).

[4] Who We Are, National Labor Relations Board, https://www.nlrb.gov/about-nlrb/who-we-are (last visited Mar. 3, 2024).

[5] Id.

[6] The NLRB Process, National Labor Relations Board, https://www.nlrb.gov/resources/nlrb-process (last visited Mar. 3, 2024).  Collective bargaining is “a process by which a labor organization, designated or selected by a majority of an employer’s employees, negotiates on behalf of employees with the employer over wages and other terms and conditions of employment[.]” GC Collective Bargaining Resources, National Labor Relations Board, https://www.nlrb.gov/guidance/key-reference-materials/gc-collective-bargaining-resources#:~:text=Collective%20bargaining%20is%20a%20process,%2C%20anti%2Ddiscrimination%20and%20anti%2D (last visited Mar. 3, 2024). 

[7] The NLRB Process, National Labor Relations Board, https://www.nlrb.gov/resources/nlrb-process (last visited Mar. 3, 2024).

[8] Id. The two other types of petitions are RD and RM petitions.  RD petitions are filed by employees seeking to remove a currently recognized union, while an RM petition is filed by an employer seeking an election because one or more parties have sought recognition as a bargaining representative.  Id.

[9] Id.

[10] Id.

[11] Id.

[12] Decision and Direction of Election at 1, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2024).

[13] Id.

[14] Id.

[15] Id. at 2.

[16] Id.

[17] Columbia University, 364 NLRB 1080, 1094 (2016).

[18] Decision and Direction of Election at 14, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2024).

[19] Id. at 2.

[20] See Melissa Korn, Ivy League’s Agreement to Ban Athletic Scholarships Is Illegal, Lawsuit Says, The Wall Street Journal (Mar. 7, 2023), https://www.wsj.com/articles/ivy-leagues-agreement-to-ban-athletic-scholarships-is-illegal-lawsuit-says-e1e7c29c.

[21] Decision and Direction of Election at 17, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2024).

[22] Id. at 11–12, 19.  Some of the financial benefits provided to players include shoes valued at $1,200 per year, equipment and other clothing valued at $2,950 per year, tickets with an estimated value of $1,200 over the course of the season, as well as travel, lodging, and meals.  Id.

[23] Id. at 18.

[24] Id.

[25] Id. at 12–13.

[26] Decision and Direction of Election at 18, Trustees of Dartmouth College, 01-RC-325633 (NLRB Feb. 5, 2024).

[27] See Northwestern University, 362 NLRB 1350 (2015).

[28] 362 NLRB 1350 (2015).

[29] See id.

[30] Id. at 1355–56.  The Northwestern University Board also declined to consider whether the Northwestern football players were employees but left open the possibility of reconsidering jurisdiction in the future.  Id.

[31] Id. at 1354.  Northwestern was a member of the Big Ten Conference in 2015 and remains the only private university in the Big Ten.  See id. at 1351; Big Ten Football, Fox Sports, https://www.foxsports.com/college-football/big-ten/teams (last visited Mar. 3, 2024).  There are currently 134 schools in the FBS.  Bill Bender, College football realignment 2024 explained: How every FBS conference will look by school, Sporting News (Oct. 25, 2023), https://www.sportingnews.com/us/ncaa-football/news/college-football-realignment-2024-conferences-school/gcxqsjmp7rxxhyxz6yhlyysi#:~:text=Sam%20Houston%20and%20Jacksonville%20State,join%20the%20FBS%20in%202024..

[32] See Matt Bonesteel & Shelly Tan, Here’s how college sports has changed after conference realignment, The Washington Post (Sept. 1, 2023, 10:29 AM), https://www.washingtonpost.com/sports/2023/08/07/college-sports-conference-realignment/.

[33] Notice of Election, Trustees of Dartmouth College, 01-RC3-25633 (NLRB Feb. 9, 2024).

[34] Motion to Stay an Election, Trustees of Dartmouth College, 01-RC3-25633 (NLRB Feb. 29, 2024).

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20Oct

The Entirely New Landscape of College Athletics: An Overview

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By Daniel Cundiff

College athletics has undergone a seismic shift.  For decades, athletes participating in Division I college athletics were unable to receive compensation for the use of their name, image, and likeness (“NIL”), and they risked becoming ineligible to participate in their sport for doing so.[1]  Today, National Collegiate Athletic Association (“NCAA”) guidelines allow student athletes to profit off of their NIL,[2] over half of states have enacted some form of NIL legislation,[3] and progress is being made toward federal NIL legislation.[4]

In National Collegiate Athletic Association v. Alston,[5] the United States Supreme Court provided a push for the NCAA to change course with respect to NIL rules.[6]  While the majority of the Court avoided the question of NIL on review,[7] Justice Kavanaugh’s concurrence squarely attacked the issue.[8]  Justice Kavanaugh expressed doubt that the portion of the NCAA’s compensation rules that were unaddressed by the majority (including NIL) were legally valid, stating that “[t]he NCAA’s business model would be flatly illegal in almost any other industry in America.”[9]  Finally, seeing potential difficulties in changing NCAA compensation rules through litigation, Justice Kavanaugh proposed that the issue could be resolved through either legislation or collective bargaining by the student athletes themselves.[10]  In any event, the writing was on the wall for the NCAA, which decided to take action.

Just nine days after the Alston opinion, on June 30, 2021, the NCAA announced a change to its compensation rules that allowed student athletes to profit from their NIL beginning the next day.[11]  Now, student athletes in states that have passed NIL legislation “can engage in NIL activities that are consistent with the law of the state where the school is located.”[12]  Further, student athletes in states without NIL legislation “can engage in this type of activity without violating NCAA rules related to name, image and likeness.”[13]  So long as it is consistent with applicable law, student athletes can also engage a professional service provider for NIL activities.[14]  At least for the time being,[15] gone are the days of students being forced to choose between NCAA eligibility and compensation for their NIL.[16]

Today, twenty-eight states have passed NIL legislation with varying nuances and restrictions.[17]  Common restrictions include prohibiting contracts from extending beyond the time an athlete participates in sports at a particular institution,[18] directly tying compensation to participation,[19] otherwise known as “pay-for-play,”[20] and allowing institutions to restrict athletes’ use of team logos for personal NIL activity.[21]  Moreover, some states prohibit specific industries from contracting with student athletes.[22]  Prohibited industries include adult entertainment, alcohol, tobacco, and firearms.[23]  Other states, favoring a more ambiguous approach, prohibit all industries that “negatively impact[] the reputation or the moral or ethical standards” of the institution.[24]

North Carolina is poised to be a key player in NIL based on its position in college sports.  Home to Duke University and the University of North Carolina at Chapel Hill, each with multiple NCAA basketball championships,[25] and the current top two football teams in the Atlantic Coast Conference (“ACC”)—Wake Forest University and North Carolina State University[26]—the State has the potential to attract top-flight high school talent to its institutions.  Roy Cooper, the Governor of North Carolina, signed an Executive Order regarding NIL on July 2, 2021, providing guidance on the future of NIL in the state.[27]  Student athletes in North Carolina can now “earn compensation, and obtain related representation, for the use of their name, image, and likeness while enrolled at the institution, and such compensation and representation . . . shall not affect a student-athlete’s scholarship eligibility.”[28]  Restrictions include prohibitions against the use of NIL contracts “as a direct inducement to enroll . . . at a particular institution.”[29]  Further, the institutions themselves may not compensate student-athletes for use of their NIL.[30]  Similar to Mississippi,[31] institutions in North Carolina “may impose reasonable limitations or exclusions on the categories of products and brands that a student-athlete may receive compensation for endorsing” when the institution “reasonably determines that a product or brand is antithetical to the values of the institution or that association with the product or brand may negatively impact the image of the institution.”[32]  Moreover, as is the case in Illinois,[33] an institution in North Carolina “may limit a student-athlete’s compensation for their name, image, and likeness as it pertains to use of the institution’s intellectual property,” and the Executive Order does not give “any student-athlete the right to use the name, trademarks, service marks, symbols, logos or any other intellectual property that belong to an institution, athletic conference, or athletic association.”[34]  Finally, in anticipation of an influx of NIL compensation for student-athletes, “[p]ostsecondary educational institutions are encouraged to provide financial literacy and life-skill programs to their student-athletes.”[35]  Therefore, Governor Cooper’s Executive Order provides the framework for NIL dealings in North Carolina, though this is unlikely to be the end of the issue.

Beyond state legislation, Senator Roger Wicker of Mississippi declared that there is “broad consensus” that the federal government should pass NIL legislation, which would unify the various restrictions of states under one common federal standard.[36]  Even the President of the NCAA, Mark Emmert, called on Congress for a “federal framework.”[37]  Emmert and others claim that the current “patchwork” of state NIL legislation leads to confusion and an uneven playing field in college athletics.[38]  Therefore, while the current landscape of NIL in college athletics remains a variety of state laws and, in states without NIL legislation, NCAA rules, preempting federal legislation is likely to pass and reshape college athletics once again.

[1] See Matthew N. Korenoski, O’Bannon v. NCAA: An Antitrust Assault on the NCAA’s Dying Amateurism Principle, 54 Duq. L. Rev. 493, 497–98 (2016).

[2] Michelle Brutlag Hosick, NCAA Adopts Interim Name, Image and Likeness Policy, NCAA (June 30, 2021), https://www.ncaa.org/about/resources/media-center/news/ncaa-adopts-interim-name-image-and-likeness-policy.

[3] See NIL Legislation Tracker, Saul Ewing Arnstein & Lehr LLP, https://www.saul.com/nil-legislation-tracker#2 (last visited Oct. 20, 2021) (“To date, the 28 states listed below have passed NIL laws.”).

[4] See id. (“[T]he most recent NIL bill . . . suggests that there is continued interest in getting a federal law on the books.”).

[5] 141 S. Ct. 2141 (2021).

[6] See id. at 2167 (Kavanaugh, J., concurring).

[7] See id. at 2141–66.

[8] See id. at 2166.

[9] Id. at 2167.

[10] Id. at 2168.

[11] Hosick, supra note 2.

[12] Id.

[13] Id.

[14] See id.

[15] See Gregory A. Morino, The NCAA Declares Independence from NIL Restrictions, Foley & Lardner LLP (Aug. 20, 2021), https://www.foley.com/en/insights/publications/2021/08/ncaa-declares-independence-nil-restrictions.

[16] See Barret Sallee, UCF Kicker Ruled Ineligible after Refusing to Agree to Terms over YouTube Channel, CBS Sports (July 31, 2017, 5:05 PM), https://www.cbssports.com/college-football/news/ucf-kicker-ruled-ineligible-after-refusing-to-agree-to-terms-over-youtube-channel/ (Donald De La Haye, a former Division 1 NCAA football player, chose to quit football after the NCAA determined that De La Haye could not earn income from his NIL on athletics-based YouTube videos.).  

[17] Saul Ewing Arnstein & Lehr, supra note 3.

[18] See, e.g., Fla. Stat. Ann. § 1006.74(2)(j) (2021) (“The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution.”).

[19] See, e.g., Exec. Order No. 2021-418 (Ky. 2021).

[20] See, e.g., Katlyn Andrews, Navigating the NCAA’s Interim NIL Policy and State Regulations, Baker Tilly (Aug. 18, 2021), https://www.bakertilly.com/insights/navigating-the-ncaas-interim-nil-policy-and-state-regulations (“Subject to state law, the NCAA’s interim policy prohibits compensation . . . [f]or athletic participation or achievement (i.e., pay for play) . . . .”).

[21] See, e.g., Student-Athlete Endorsement Rights Act, 110 Ill. Comp. Stat. Ann. 190/1-99 (LEXIS through P.A. 102-450 of the 2021 Session of the 102nd Legislature).

[22] See, e.g., Ark. Code Ann. § 4-75-1307(b) (Westlaw through the 2021 Regular and First Extraordinary Session of the 93rd General Assembly) (effective Jan. 1, 2022).

[23] Id. at § 4-75-1307(b)(1)–(9).

[24] See, e.g., Mississippi Intercollegiate Athletics Compensation Rights Act, Miss. Code Ann. § 37-97-107(14) (Westlaw through the 2021 Regular Session).

[25] See Championship History, NCAA, https://www.ncaa.com/history/basketball-men/d1 (last visited Oct. 20, 2021).

[26] See 2021 Football Standings, ACC, https://theacc.com/standings.aspx?path=football (last visited Oct. 20, 2021).

[27] Exec. Order No. 223 (N.C. 2021).

[28] Id.

[29] Id.

[30] Id.

[31] See Mississippi Intercollegiate Athletics Compensation Rights Act, Miss. Code Ann. § 37-97-107(14) (Westlaw through the 2021 Regular Session).

[32] Exec. Order No. 223 (N.C. 2021).

[33] See Student-Athlete Endorsement Rights Act, 110 Ill. Comp. Stat. Ann. 190/1-99 (LEXIS through P.A. 102-450 of the 2021 Session of the 102nd Legislature).

[34] Exec. Order No. 223 (N.C. 2021).

[35] Id.

[36] Ralph D. Russo, Lawmakers Agree NCAA Needs NIL Help, but How Much and When?, Associated Press (June 9, 2021), https://apnews.com/article/in-state-wire-college-sports-football-stanford-cardinal-football-laws-188c6c20ad6032f6f633a1113f57904a.  

[37] Maria Carrasco, Congress Weighs In on College Athletes Leveraging Their Brand, Inside Higher Ed (Oct. 1, 2021), https://www.insidehighered.com/news/2021/10/01/congress-holds-hearing-creating-federal-nil-law.

[38] Id.

Post image by Ghana Decides on Flickr

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2Mar

EA Sports: It’s in the Licensing

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By: Natalie Galdos

College football is coming back to EA Sports.[1]  Daryl Holt, EA Sports vice president and general manager, announced Feb. 2, 2021 that EA Sports will revive its college football video game series.[2]  While Holt declined to share any timeline for the arrival of the next installment of the college football series, fans are looking forward to the game’s release, which previously sold millions of copies worldwide.[3]  The new game, EA Sports College Football, will be the beloved franchise’s first college football title since EA discontinued the NCAA Football franchise in 2013.[4]  EA Sports previously cited an ongoing class-action legal dispute with ex-athletes over using their likeness without compensation as the reason for the cancellation after a class action lawsuit,[5] O’Bannon v. NCAA.[6]

Ed O’Bannon, a former All-American basketball player, was depicted in an EA Sports college basketball video game.[7]  Because the NCAA has long held that college athletes are by definition “amateurs” and cannot profit in any way from their status as student-athletes, O’Bannon never consented to the use of his likeness in the video game, and he was not compensated for it.[8]  Thus, in 2009, O’Bannon sued the NCAA and the Collegiate Licensing Company, the entity which licenses the trademarks of the NCAA and a number of its member schools for commercial use, in federal court.[9]  EA Sports and the Collegiate Licensing Company settled in 2014 for $40 million.[10]  Without active licensing agreements, EA Sports had to stop all distribution of its college sports video games.[11]  This time, however, EA Sports stated the new game would not include names, images, or likeness (“NIL”) of any student-athletes.[12]  By using generic players, EA Sports hopes to sidestep the hot-button issue of NIL rights and compensation.[13]  However, with a new Supreme Court case on the horizon, EA Sports’ plans could all change.

On March 31, 2021, the Supreme Court will hear arguments for Alston v. NCAA[14] which is an NCAA case on student-athlete compensation.[15]  Former and current college athletes argue the NCAA’s rules restricting on education-related benefits, violated antitrust law under the Sherman Act.[16]  In Alston, the district court found for the athletes, holding that the NCAA must allow for certain types of academic benefits, such as “computers, science equipment, musical instruments and other tangible items not included in the cost of attendance calculation but nonetheless related to the pursuit of academic studies.”[17]  The U.S. Court of Appeals for the Ninth Circuit affirmed, recognizing the NCAA’s interest in “preserving amateurism,” but concluding that the NCAA’s practices violated antitrust law.[18]  Further while the Alston litigation has been ongoing, six states have passed legislation addressing an athlete’s ability to receive compensation for use of their NIL, and more than two dozen other states are considering similar bills.[19]

If the Supreme Court decides that the NCAA’s amateurism rules violate federal antitrust law, this could allow for student-athletes to be compensated by anyone for their NIL.  Further, if this decision is upheld, EA Sports’ plan not to use the NIL of existing college players may all change.

Since EA Sports is willing to pay athletes from years ago for use of their NILs, Alston may immediately open the door for current athletes to profit directly from video games.[20]  From EA Sports’ perspective, it would be beneficial to integrate real college players in its games.  For example, NCAA Football 13 and 14 featured Robert Griffin III and Denard Robinson, respectively.[21]  Both players were already in the NFL when their respective video games were released.[22]  Thus, EA Sports was willing to put them on the cover of their video game because their time at Baylor and Michigan was “still fresh enough in the collective memory[.]”[23]  The connection to real players can allow EA College Sports to go back to its dominance in the college football gaming world.

Overall, the best decision for the Supreme Court may be to reaffirm the Ninth Circuit as a win for college athletes and EA Sports.  The Supreme Court could rule that student-athletes may never be paid a salary for playing, but could receive the compensation they deserve through signing autographs, marketing deals and other forms of pay for being a brand.[24]  In this model, the NCAA can still benefit because this structure can still follow the NCAA’s amateurism requirement of no “pay for play.”  Here, nobody would pay the athlete to play; EA Sports or any other video game is simply paying for their brand and likeness.  Therefore, affirming the Ninth Circuit would provide the most benefit to the student-athletes and the gaming community as a whole so that companies like EA Sports can bring back the video games as we know and love them.

[1] Michael Rothstein, EA Sports to do College Football Video Game, ESPN (Feb. 2, 2021), https://www.espn.com/college-football/story/_/id/30821045/school-plan-ea-sports-do-college-football.

[2] Id.

[3] Id.

[4] Zoe C. Jones, EA Sports Revives its College Football Video Game—But it Won’t Include Real Student-Athletes, CBS News (Feb. 2, 2021, 4:48 PM), https://www.cbsnews.com/news/ea-sports-college-football-game-its-happening/.

[5] Tony Manfred, EA Sports Cancels its College Football Video Game Amid a Wave of Lawsuits, Bus. Insider (Sept. 26, 2013, 4:34 PM),  https://www.businessinsider.com/ea-sports-cancels-ncaa-football-videogame-2013-9.

[6] 802 F.3d 1049 (9th Cir. 2015).

[7] Id. at 1055.

[8] Id. at 1054–55; see also Kat Bailey, How EA Is Bringing Back College Football and Sidestepping the NCAA’s Biggest Problems, Vice (Feb. 5, 2021, 10:49 AM), https://www.vice.com/en/article/epd85k/ea-ncaa-college-football-despite-obannon-lawsuit.

[9] O’Bannon, 802 F.3d at 1055.

[10] Mike Hume & Rick Maese, EA Sports Revives College Football Franchise as Courts Mull NCAA’s Stance on Amateurism, Wash. Post (Feb. 2, 2021, 12:00PM), https://www.washingtonpost.com/video-games/2021/02/02/ea-sports-college-football/.

[11] Id.

[12] Jones, supra note 4.

[13] Hume & Maese, supra note 10.

[14] Petition for Writ of Certiorari, NCAA v. Alston, 208 L.Ed.2d 504 (U.S. 2020) (No. 20-512), 2020 WL 7366281.

[15] NCAA Case on Athlete Compensation Set For Supreme Court on March 31, Atlantic (Feb. 1, 2021, 12:01 PM), https://theathletic.com/news/ncaa-athlete-compensation-supreme-court/9Zgc5xkjnWHx.

[16] Melissa Quinn, Supreme Court Takes up NCAA Antitrust Dispute Over Compensation for College Athletes, CBS News (Dec. 16, 2020, 11:09 AM),  https://www.cbsnews.com/news/supreme-court-ncaa-case-athlete-compensation/.

[17] In re NCAA Ath. Grant-In-Aid Cap Antitrust Litig., 375 F. Supp. 3d 1058, 1088 (N.D. Cal. 2019).

[18] Alston v. NCAA, 958 F.3d 1239, 1243 (9th Cir. 2020); Quinn, supra note 16.

[19] Hume & Maese, supra note 10.

[20] Bailey, supra note 8.

[21] Id.

[22] Id.

[23] Id.

[24] Hayes Rule, A Breakdown of Alston v. NCAA, Medium (May 4, 2019), https://medium.com/the-bearfaced-truth/a-breakdown-of-alston-v-ncaa-what-is-the-future-of-paying-college-athletes-3483569905b4

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13Oct

How Losing Football Coaches Stand to Gain from the NCAA’s Decision to Waive Bowl Eligibility Requirements

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Florida State Head Coach Mike Norvell leads the Seminoles onto the field prior to their first—and, so far, only win—of the season, Oct. 3, 2020. Photo Courtesy Ross Obley, Seminoles.com.

By Jonathan Carter

The 2020–21 NCAA football season is shaping up to be much different than seasons past,[1] and a recent rule change recommended by the NCAA Division I Football Oversight Committee (“Oversight Committee”) could result in coaches with losing records benefiting from the disarray.[2] Due to COVID-19, currently only 112 of the 130 total Football Bowl Subdivision (“FBS”) teams are playing to compete in forty-one scheduled bowl games.[3] To play in a bowl game, an FBS team usually must first satisfy the NCAA requirements governing bowl eligibility by becoming a “deserving team.”[4] Most importantly, the team must have “won a number of games against [FBS] opponents that is equal to or greater than the number of its overall losses.”[5] This rule mandates that an FBS team have a win-loss record equal to or greater than 50 percent before becoming eligible to play in a bowl game.[6]

With many schools’ football teams sitting this season out, it is likely impossible that enough FBS teams will satisfy this traditional bowl eligibility requirement.[7] Current NCAA rules provide exceptions in the event that there are not enough eligible teams to fill every bowl slot, but these exceptions are generally based on a team’s academic—rather than athletic—performance.[8] In response to the novel circumstances created by COVID-19, the Oversight Committee recently recommended the removal of normal bowl eligibility requirements for the 2020–21 bowl season.[9] This recommendation would eliminate the current win-loss record requirement, but must first be approved by the Division I Council, which is scheduled to meet on Oct. 13–14.[10]

Consequently, if approved, the rule change could have a direct impact on whether FBS coaches with losing records are entitled to receive additional compensation from their universities. In addition to a fixed salary, college coaching contracts frequently include bonus provisions that entitle a coach to additional compensation if certain on-field or off-field events occur.[11] While off-field performance bonuses are generally conditioned on the academic performance of the coach’s players, on-field performance bonuses are related to the team’s athletic accomplishments during the season.[12] The specific terms of coaches’ contracts vary, but a college coaching contract might condition the payment of on-field bonuses on: the team winning a specified number of games, the team playing in or winning a national championship, or the coach winning a national coach of the year award.[13]

Moreover, most FBS college coaching contracts contain an on-field bonus provision that entitles a coach to additional compensation if the team appears in a bowl game.[14] This reflects the university’s goal to incentivize the coach to win games and is consistent with the current trend of paying coaches significantly more for their services.[15] The economic justification for this trend is premised on the idea that teams who win games and play in bowl games gain national notoriety and generate more athletic revenue for the university.[16] As a result, universities and FBS coaches who entered into coaching contracts that include on-field bowl game bonus provisions did so under the assumption that the coach would at least have to satisfy the traditional NCAA bowl eligibility rules to receive that bonus.[17] The Oversight Committee’s new recommendation, however, would make this assumption false by allowing FBS teams with losing records to play in bowl games.[18] Ultimately, the recommendation’s effect will be determined by a football team’s win-loss record and the language of the bowl game bonus provision found in the coach’s contract.

To illustrate, Mike Norvell was hired to coach the Florida State Seminoles football team in December 2019.[19] Among other on-field performance bonuses contained in his agreement, Norvell is entitled to receive at least $100,000 if the Seminoles play in any bowl game while under Norvell’s direction as head coach, regardless of the team’s record or ranking.[20] The Seminoles currently have an overall win-loss record of 1–3[21] and have yet to face many talented ACC opponents listed on their schedule.[22] In a normal NCAA football season, if the Seminoles were to finish the regular season with a losing record they would almost certainly be ineligible to play in a bowl game.[23]

If the Oversight Committee’s recommendation is approved, the Seminoles could remain bowl eligible with a losing record and play in one of the forty-one scheduled bowl games.[24] This unprecedented outcome would entitle Norvell to receive an additional $100,000 on top of his approximately $4 million annual salary for what many would consider an unsuccessful season.[25] Interestingly, Norvell’s bonus provision is similar to that of many other major college football coaches including UCLA’s Chip Kelly,[26] Alabama’s Nick Saban,[27] and Texas A&M’s Jimbo Fisher,[28] in that their contracts entitle them to receive a bonus simply because they are the head coach of a team that appears in a bowl game.

Other coaching contracts, however, may avoid this result because of qualifying language in the bonus provision that requires the team to win a specified number of regular season games in addition to playing in a bowl game. For example, under the “bowl participation” bonus provision of the University of Oregon’s football coach, Mario Cristobal, his team “must have at least 7 regular season wins” for him to receive a $100,000 bonus for appearing in a bowl game.[29] Similarly, Clemson’s football coach, Dabo Sweeny, is only entitled to receive $50,000 for playing in a bowl game if his team also wins “eight or more regular season games.”[30] Thus, these universities have insulated themselves from the potential effect of the Oversight Committee’s recommendation by requiring their team to win a majority of their regular season games.

Historically, putting together a winning season was the first step an FBS coach was required to take before receiving any bonus for a team’s on-field performance. Among many other changes, COVID-19’s impact on college football has put this requirement into question. If the Oversight Committee’s recommendation is accepted by the Division I Council, FBS coaches with losing seasons could be entitled to receive bonuses from their universities for coaching in bowl games that they traditionally would not be eligible to play in.

[1] See Ivan Maisel & Adam Rittenberg, How College Football is Trying to Answer Its Biggest Return-To-Play Questions, ESPN (Jul. 1, 2020), https://www.espn.com/college-football/story/_/id/29387826/how-college-football-trying-answer-biggest-return-play-questions.

[2] See Greg Johnson, Waiving Bowl Qualification Requirements Recommended, NCAA (Sept. 24, 2020, 6:56 PM), http://www.ncaa.org/about/resources/media-center/news/waiving-bowl-qualification-requirements-recommended.

[3] David Scott, Every College Football Team is Likely Bowl Eligible in 2020. Here’s Why, What to Know, The Charlotte Observer (Sept. 22, 2020, 3:10 PM), https://www.charlotteobserver.com/sports/article245890615.html.

[4] See Nat’l Collegiate Athletic Ass’n, 2020–21 NCAA Division I Manual § 18.7.2 (2020), http://www.ncaapublications.com/productdownloads/D121.pdf [hereinafter NCAA Manual].

[5] Id.

[6] Id.

[7] David Cobb, NCAA Committee Recommends Waiving Bowl Eligibility Requirements for 2020 College Football Season, CBS Sports (Sept. 24, 2020, 8:27 PM), https://www.cbssports.com/college-football/news/ncaa-committee-recommends-waiving-bowl-eligibility-requirements-for-2020-college-football-season/.

[8] Id.; NCAA Manual, supra note 4, § 18.7.2.1.3.

[9] Johnson, supra note 2; see also NCAA Manual, supra note 4, § 18.7.2.3 (“The Division I Football Oversight Committee . . . shall have the authority to waive all postseason bowl game requirements based on objective evidence that demonstrates circumstances that warrant the waiver. . . .”).

[10] Johnson, supra note 2.

[11] Martin J. Greenberg, College Coaching Contracts Revisited, 12 Marq. Sports L. Rev. 127,  179–83 (2001); Randall S. Thomas & Lawrence Van Horn, College Football Coaches’ Pay and Contracts: Are They Overpaid and Unduly Privileged, 91 Ind. L.J. 189, 219–22 (2016).

[12] See Greenberg, supra note 11, at 179–83; Randall & Van Horn, supra note 11, at 219–22.

[13] See Randall & Van Horn, supra note 11, at 219–20; see also, e.g., Amended Coaching Contract #1 Between Mario Cristobal, Coach, and Univ. of Ore. (June 3, 2019) [hereinafter Cristobal Contract], https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2018/08/Cristobal-Mario-2017-24-amendment-1.pdf; Coaching Contract Between Dan Mullen, Coach, and Univ. of Fla. 17–18 (Nov. 26, 2017), https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2019/07/Dan-Mullen-Florida.pdf; Restated Coaching Contract Between Tom Herman, Coach, and Univ. of Tex. at Austin 8–9 (May 19, 2016), https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2015/10/Thomas-J.-Herman-Restated-1-0-Culture-LLC-17-36122-Restated-Head-Football-Coach-Employment-Agreement.pdf.

[14] See coaching contracts cited supra note 13; see also Greenberg, supra note 11.

[15] See Richard T. Karcher, The Coaching Carousel in Big-Time Intercollegiate Athletics: Economic Implications and Legal Considerations, 20 Fordham Intell. Prop. Media & Ent. L.J. 1, 27–33 (2009).

[16] Id.

[17] See, e.g.,Randall & Van Horn, supra note 11, at 198–99.

[18] Johnson, supra note 2.

[19] Teresa M. Walker, Florida State Makes Memphis’ Mike Norvell New Head Coach, Associated Press (Dec. 8, 2019), https://apnews.com/article/38ac32d5b32b4dc3aa929e6a6b55a743.

[20] Coaching Contract Between Mike Norvell, Coach, and Fla. State Univ. 7–8 (Dec. 7, 2019) [hereinafter Norvell Contract], https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2018/08/Norvell-Contract-12-11-19.pdf.

[21] Anthony Anderson, Williams, Crawford Lead No. 5 Notre Dame Past Florida State, Associated Press (Oct. 11, 2020), https://apnews.com/article/college-football-jordan-travis-kyren-williams-shaun-crawford-football-cdb11adf56ddb2ca56af9780ca4de865.  

[22] Florida State Seminoles Schedule 2020, ESPN, https://www.espn.com/college-football/team/schedule/_/id/52 (last visited Oct. 13, 2020).

[23] See, e.g.,Tim Linafelt, Clock Strikes 12 On Streaks, Noles’ Football Season, Fla. State Seminoles (Nov. 24, 2018), https://seminoles.com/clock-strikes-12-on-streaks-seminoles-season/.

[24] Johnson, supra note 2.

[25] Norvell Contract, supra note 20, at 3–4, 7–8.

[26] Coaching Contract Between Chip Kelly, Coach, and Univ. of Cal. L.A. 5 (Nov. 25, 2017), https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2018/08/Chip-Kelly-UCLA.pdf (providing at least $40,000 bonus for coaching in any bowl game).

[27] Second Amended and Restated Contract Between Nick Saban, Coach, and Univ. of Ala. 9 (Sep. 4, 2018), https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2018/08/Nick-Saban-Alabama.pdf (providing at least $65,000 bonus for coaching in any bowl game).

[28] Coaching Contact Between Jimbo Fisher, Coach, and Tex. A&M Univ. 5–6 (Aug. 17, 2018), https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2015/10/Jimbo-Fisher-Texas-AM.pdf (providing at least $100,000 bonus for coaching in any bowl game).

[29] Cristobal Contract, supra note 13.

[30] Amended and Restated Coaching Contract Between Dabo Sweeny, Coach, and Clemson Univ. (Nov. 18, 2019) 7–8, https://2michy3wy0l30d34041dt1et-wpengine.netdna-ssl.com/football/wp-content/uploads/sites/3/2018/08/7127_SwinneyDabo_2019-1-1_CONTRACT.pdf.

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8Nov

Fair Pay to Play Act: The Baseline for the NCAA’s New Compensation Rules

Categories: Current Issues Blog
Comments Off on Fair Pay to Play Act: The Baseline for the NCAA’s New Compensation Rules

By Alexander Hill

On October 29, 2019, the National Collegiate Athletic Association (the “NCAA”) announced that it would begin the process of directing its divisions to consider amendments to their bylaws to allow collegiate athletes to benefit from their names, images, and likenesses.[1] In this announcement, the NCAA stated these changes would come in a manner “consistent with the collegiate model.”[2] The NCAA’s decision follows California’s enactment of Senate Bill 206, commonly known as the “Fair Pay to Play Act” (the Act), which (upon its effective date of January 2023) will allow players to profit from their names, images, and likenesses, as well as sign agents to represent them in licensing contracts.[3] Additionally, Congress and other state legislatures are considering proposed legislation that would have similar effects as the Act.[4] However, the NCAA’s language of “consistent with the collegiate model” has an eerie similarity to the argument for restriction on amateurism that it made in O’Bannon v. Nat’l Collegiate Athletic Ass’n when it argued that compensation for college athletes goes against the “identity of college sports.”[5] In comparison to the Act, how much can the NCAA limit the athletes’ ability to profit of their name, image, and likeness?

This post addresses the extent of the legal limitations under the Sherman Antitrust Act on the NCAA when implementing these changes “consistent with the collegiate model.” It analyzes these two procompetitive factors in light of the details of the California Act, and whether the rights granted to athletes under this bill hinder these purposes to the extent that the Rule of Reason allows the NCAA to structure its own likeness compensation rules more narrowly than the Act under the Sherman Antitrust Act.

The Act allows athletes to hire agents to represent them in contracts with third parties to use the athletes’ likenesses in different ways, as well as allow the third parties to compensate the athletes in turn.[6] However, the Act restricts schools from compensating the players when they use the athletes’ likenesses themselves.[7] Additionally, athletes cannot enter into contracts if those contracts conflict with the terms of contracts entered into by the teams for which they play.[8]

To this point, the prospect of amateurism as a procompetitive factor in college sports has allowed the NCAA to refuse cash compensation for name, image, and likeness under the Sherman Antitrust Act, as evidenced by O’Bannon.[9] In O’Bannon, the Ninth Circuit Court of Appeals noted that the NCAA’s rules on player compensation are subject to the Sherman Antitrust Act and should receive the scrutiny classified as the “Rule of Reason.”[10] In the Rule of Reason analysis, the court addresses whether a restriction on trade is procompetitive, and if it is procompetitive, whether there is another way to promote the goal of the restriction in a less restrictive way.[11] In the O’Bannon case, the court found that the NCAA’s restriction on cash payments from schools to athletes for their name, image, or likeness beyond grants for educational expenses of the athlete failed the Rule of Reason analysis.[12] In its reasoning, the court noted the restriction promoted two procompetitive purposes: “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism” and “integrating academics and athletics.”[13] The court held that third parties, specifically EA Sports, which for years had made video games based on college athletics, could not use the athletes’ likeness without compensating them.[14]

In the court’s reasoning, however, the court mainly addressed the procompetitive factor of “preserving the popularity of the NCAA’s product by promoting its current understanding of amateurism” and did not really address the issue of “integrating academics and athletics.”[15] The court failed to address the fact that the NCAA already has in place certain eligibility requirements that require athletes to take certain kinds of classes during their tenure in school, as well as a GPA requirement that all athletes have to meet.[16] Whether or not players are compensated appears to have no bearing on the athletes’ integration into their college’s academics in any way. Where students are required to still maintain a certain level of academic achievement, an allowance for compensation would be a less restrictive alternative to restricting compensation for athletes while still maintaining the procompetitive factor of integrating athletics to academics. Therefore, allowing compensation for athletes would pass the Rule of Reason under the third prong. So, the only procompetitive factor that could be restricted would be restricting the popularity of the NCAA’s product.

When analyzing the restriction on the popularity of the NCAA’s product, the court in O’Bannon only focused on recruitment of players and payments to the players by the colleges themselves.[17] As noted above, the court held that colleges could not compensate athletes for their likenesses because it would hinder the popularity of the NCAA’s product.[18] Similar to this holding, the Act prohibited the ability of schools to pay their athletes for their likenesses.[19] So, that requirement would actually be consistent with O’Bannon. Looking at the allowance for athletes to hire agents, there is no reason why this would restrict the popularity of the sport. Applying the Rule of Reason analysis, allowing players to hire agents would not be more restrictive on the popularity of the NCAA’s product than would allowing players to earn compensation from third parties. If mandating that third parties must pay collegiate athletes for their likeness is not restrictive on this procompetitive aspect by O’Bannon, certainly allowing the athletes to hire agents to ensure they are fairly represented in a contract would meet the same standard under the Rule of Reason. So, naturally, allowing the athletes to hire agents would pass the Rule of Reason analysis and the NCAA would not be able to prevent students from being able to hire agents.

Additionally, if the court already held in O’Bannon that third parties are required to compensate the athletes[20], the requirement in the Fair Pay to Play Act that prevents the NCAA from implementing a rule prohibiting the athletes’ ability to profit off of their likeness is consistent with the holding in O’Bannon. Therefore, it appears that the allowances for athletes in the Fair Pay to Play Act are consistent with the court’s holding in O’Bannon.

In conclusion, it appears that the Fair Pay to Play Act’s grant of rights to athletes are consistent with the holding in O’Bannon, and any restriction beyond the Fair Pay to Play Act by the NCAA would be inconsistent with the ruling in O’Bannon.

[1] Board of Governors Starts Process to Enhance Name, Image and Likeness Opportunities, NCAA (Oct. 29, 2019, 1:08 PM), http://www.ncaa.org/about/resources/media-center/news/board-governors-starts-process-enhance-name-image-and-likeness-opportunities.

[2] Id.

[3] Allen Kim, California Just Passed a Law That Allows College Athletes to Get Paid, CNN (Sep. 29, 2019, 4:01 PM), https://www.cnn.com/2019/09/30/sport/california-sb-206-ncaa-trnd/index.html

[4] Michael McCann, What’s Next After California Signs Game Changer Fair Pay to Play Act into Law?, Sports Illustrated (Sep. 30, 2019), https://www.si.com/college/2019/09/30/fair-pay-to-play-act-law-ncaa-california-pac-12

[5] O’Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049, 1058 (9th Cir. 2015).

[6] Fair Pay to Play Act, S.B. 206, 2019 Cal. State Senate (Cal. 2019).

[7] Id.

[8] Id.

[9] O’Bannon, 802 F.3d at 1079.

[10] Id.

[11] Id. at 1070.

[12] Id. at 1079.

[13] Id. at 1076.

[14] Id. at 1067.

[15] Id. at 1076.

[16] Id.; Amateurism, NCAA (last visited Nov. 4, 2019), http://www.ncaa.org/student-athletes/future/amateurism

[17] O’Bannon, 802 F.3d at 1076.

[18] Id.

[19] Cal. S.B. 206.

[20] O’Bannon, 802 F.3d at 1067.

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