What you need to know about the latest NCAA legal battle
The NCAA returns to a federal courtroom Wednesday to continue its fight against one of the many current challenges to its amateurism-based business model.
If this slow march toward something more akin to professional sports is starting to feel to you like the equivalent of an 18-play, 14-minute drive engineered by a triple-option offense, you’re not alone. The legal battles that have occupied the past several college football offseasons are tedious, repetitive and filled with a head-spinning menu of overlapping threats. It’s still unclear which threat among the current options has the best chance of breaking through, but the NCAA enters this offseason looking increasingly like a defense spread thin and on its heels, hoping for some unexpected help to get a stop.
Wednesday’s hearing in front of the U.S. Court of Appeals for the 3rd Circuit in Philadelphia is the next step in the Johnson v. NCAA case, in which several former college athletes argue they should have been paid an hourly wage like other student workers on their campuses. The NCAA contends that its business is unique and that the normal rules that determine whether someone fits the definition of an employee don’t make sense for college athletes. The appellate judges will eventually decide whether the standard tests for employee status should be applied to college athletes and their schools.
“This particular case is flying under the radar compared to some of the others we hear about much more frequently, but it’s important,” said Sarah Wake, who advises universities on athletic compliance issues in her role as an attorney at McGuireWoods.
Wake said the Johnson case is further along in its legal process than many of the other threats facing the NCAA. Although it’s tough to predict which one is most likely to deliver a major blow to amateurism in college sports, each new threat increases the odds that some challenger will find a sympathetic ear with the power to force significant change.
“One of these things is going to stick,” Wake said. “It’s only a matter of time before something goes in favor of the student-athletes.”
By 2024, the College Football Playoff will triple in size and the two most powerful football conferences in the country will officially welcome four of the sport’s biggest brand names (Texas and Oklahoma will play their first season in the SEC that year, and USC and UCLA are scheduled to arrive in the Big Ten). Those changes were sparked and accelerated by the exchange of hundreds of millions of dollars.
Where will college athletes stand in this multibillion-dollar industry by then? Here’s what you need to know about how the Johnson case could provide an answer and where it fits among the looming legal forces reshaping college sports:
Filed by former Villanova football player Trey Johnson, this case argues that college athletes fit the definition of an employee and have been denied rights that are protected in the Fair Labor Standards Act (FLSA). Those rights include making a minimum hourly wage and overtime pay.
Plaintiff’s attorney Paul McDonald said his goal is to give athletes the same kind of rights that fellow students who take tickets or sell concessions to their games have when they are working for the university.
“All these years they’ve said you can’t be both students and employees, but we’ve always had kids working on campus, working in dining halls, libraries and offices, working at the games themselves,” McDonald said. “They’re trying to disadvantage athletes vis-à-vis other kids on campus. It seems fundamentally unfair to do that.”
The NCAA and its lawyers have argued in court documents that playing a sport in college is not work done in exchange for compensation. They say that it is instead part of the educational experience for athletes on campus. To make athletes employees of their school, some members have argued, is not affordable for most college athletic departments. NCAA members say they’re open to “modernizing” their rules but have drawn a hard line at calling their athletes school employees.
This week’s hearing is part of an interlocutory appeal — an appeal filed on a specific issue in the middle of a case before a verdict is reached. The NCAA asked U.S. District Judge John Padova to dismiss the lawsuit on the basis that other circuit courts have already determined that playing a college sport doesn’t count as work. Padova declined that request, and now the NCAA is appealing his decision in an effort to prevent the case from moving forward.
The appellate court won’t make a ruling Wednesday (that will likely take several weeks or months), but the questions asked might provide some insight into how the judges are viewing the NCAA’s request. For example, late last month the judges asked lawyers from both sides to be prepared to discuss the impact that making athletes into employees could have on Title IX obligations for the schools — an indication that the court is considering the broader implications of its decision.
The 9th Circuit and 7th Circuit courts have both ruled that college athletes are not employees protected by FLSA law. Those cases (Dawson v. NCAA and Berger v. NCAA) concluded in 2019 and 2016, respectively. The idea of viewing college athletes as employees is less jarring now than it was even a few years ago, thanks in large part to changes in name, image and likeness rules. Other courts have also shown less deference in the past few years to the NCAA’s argument that it’s not like other industries — most notably the U.S. Supreme Court when it ruled unanimously that the organization was violating antitrust law in the June 2021 Alston v. NCAA case.
“The general sentiment has shifted in a lot of minds,” sports attorney Mit Winter said. “In the past it was hard to even think about college athletes as employees.”
The Supreme Court’s decision in the Alston case — especially Justice Brett Kavanaugh’s concurring opinion — opened the door to viewing the NCAA in the same light as other entertainment industry groups rather than an academic-focused institution, which makes every legal challenge the organization has faced since then a larger potential threat.
Two other groups are fighting for employee status for college athletes using a different legal lever — the National Labor Relations Board. Success for the claimants in either of those cases could potentially lead to the ability for college athletes to form unions and bargain collectively. One of those efforts took a significant step forward in December, but it is also still likely at least a year from reaching a conclusion.
Antitrust lawsuits also remain a large, looming threat for the NCAA. While the Alston decision affirmed it was illegal for the NCAA to limit what kind of academic-related benefits a school could provide to its athletes, others are already looking to expand that list of benefits. Another antitrust lawsuit (House v. NCAA) making its way through the courts could take away the NCAA’s power to enforce any restrictions on endorsements for college athletes and put the association on the hook to pay a potentially crippling financial settlement to past athletes who were prevented from making endorsement money while in college. That case isn’t slated to reach a trial until September 2024.
Outside the courtroom, NCAA leaders are increasingly wary of state lawmakers creating legislation that either grants employees’ rights to college athletes or would force schools to share significant portions of their revenue with teams that turn a profit. It was, after all, state legislators who forced the NIL rule changes into existence after years of unsuccessful legal attempts. They could prove to be a similar catalyst in the next frontier of professionalizing college sports.
The NCAA’s lawyers have presented the court with other examples of industries in which the normal tests of employee status don’t effectively capture the “economic reality” of the relationship between parties. They have successfully argued that the athlete-to-school relationship deserves special consideration in the Berger and Dawson cases mentioned above.
McDonald says the root source of legal precedent for their argument is a case called Vanskike v. Peters. A judge in that case ruled that inmates who do work while they are incarcerated don’t qualify as employees of the prison. The judge justified the ruling by citing the 13th Amendment, which says that slavery is illegal except as punishment for a crime.
No, not really. The NCAA’s lawyers use the Vanskike case to argue that the court system recognizes there are some circumstances when the normal test for employee status doesn’t work. Although they say both college sports and imprisonment are examples of special circumstances, they aren’t arguing that the circumstances are the same.
Despite the noteworthy nuance in its argument, the NCAA is still building its legal argument on a case that tethers back to the slavery loophole of the 13th Amendment. McDonald, the plaintiff’s attorney, said the implication is, at best, racially insensitive given the high percentage of Black athletes in the NCAA’s most profitable sports.
The NCAA and its lawyers were certainly aware of the comparisons they might be inviting by mentioning college sports and a prison labor case in the same legal filings. Legal analysts say that, if nothing else, the use of the Vanskike case at least illustrates the limited options the NCAA has to make its best case.
“There is nuance in the argument, but it just looks bad. It’s tone-deaf,” Winter said. “The people who work in the NCAA are smart people. They had to have known and considered the PR aspect of it. They probably just determined: This is the argument we have to make to put forth our best arguments.”
The NCAA could appeal the 3rd Circuit’s decision to the U.S. Supreme Court immediately, or it might wait to see how the case concludes in the district court. In either event, if the plaintiffs are going to succeed in making athletes into employees, it won’t happen before the NCAA asks the Supreme Court to weigh in on the issue.
The country’s highest court declines the overwhelming majority of requests it receives for appeal, but there’s reason to believe this case could have better odds than most of piquing the justices’ interest. If the 3rd Circuit judge rules in favor of the plaintiffs in this case, that will be disagreeing with previous rulings in other federal circuits on a high-profile subject. Those types of inconsistencies are often what garners interest from the Supreme Court.
At the NCAA convention last month, board of governors chair Linda Livingstone told reporters that the NCAA wanted federal legislators to create a new law that would codify their argument that college athletes aren’t employees and give them some protection against the antitrust lawsuits they are facing. Livingstone said she felt a sense of urgency to get a new law because “Congress is really the only entity that can affirm student-athletes’ unique status.”
NCAA members are hoping that the arrival of the organization’s new president — former Massachusetts Gov. Charlie Baker — will help them make some friends on Capitol Hill when he starts his tenure March 1. Lobbying efforts under outgoing president Mark Emmert failed to gain any real momentum in Washington. Even if they are able to gain more of a foothold with legislators moving forward, Livingstone and others realize they are fighting against time to try to get a new law signed before one of the ongoing legal efforts deems athletes to be employees. Wednesday’s hearing could provide a good indication of how short their window might be.