NCAA changes: NLRB, lawsuits and mounting legal challenges

Pressure is mounting on the NCAA.

The governing body overseeing amateur sports is facing legal threats — some overlapping, some contradictory — to its status quo on several fronts. On Monday, the National Labor Relations Board told players on the Dartmouth men’s basketball team that they fit the definition of a university employee. The following day, a federal judge wrote that the Tennessee attorney general is “likely to succeed on the merits” of a claim that the NCAA can’t legally punish players or their schools for negotiating name, image and likeness deals during their recruiting process. The NCAA is already fighting existing court cases and lobbying Congress for national rules, and while there’s no clear, singular knockout punch on the horizon, it’s clear walls are closing in on what remains of amateurism in college sports.

It’s a lot to keep track of, so here’s a crib sheet to help you out.

The latest on NLRB cases

The federal agency that oversees collective bargaining rights for employees of private American companies is in the midst of two cases involving college athletes. In New Hampshire, Dartmouth’s basketball players cleared the first major hurdle toward joining a union. In Los Angeles, the NLRB will resume a similar trial later this month on behalf of football and basketball players at USC.

Administrators at Dartmouth said they plan to appeal this week’s decision to the NLRB’s national board — a process that could take more than a year to resolve. In 2014, an NLRB regional director ruled that Northwestern football players were employees, but an appeal by the school ultimately derailed the players’ effort to unionize.

Why might this time be more successful for the players? The legal and public perception of college athletes has certainly shifted (more on that below). But more importantly, the board punted a decision in the Northwestern case, in large part, because Northwestern’s Big Ten peers were public institutions, which have different laws for collective bargaining outside the NLRB’s purview. The board didn’t want to create an unfair market in which only one team had players that could bargain as employees. Dartmouth players in the all-private-school Ivy League would not face the same issue.

Dartmouth’s players said in a statement this week they intend to form a players’ association for all Ivy League players, and they hope athletes across the country “will be inspired to follow suit.”

In Los Angeles, the claimants are trying a new strategy to avoid the differences between public and private schools. They argue that athletes are not only employees of their school, but of their conference and the NCAA — both of which are private institutions under the NLRB’s purview. If successful, their claim could set a more impactful precedent for the wealthiest conferences, all of which are composed mostly of public schools.

“[Dartmouth’s ruling] definitely bodes well for the USC case. And it’s not too much of a surprise,” said Ramogi Huma, founder of an athlete advocacy group who filed the USC case. “The USC case is even stronger because they actually get scholarships. We expect to win this.”

Huma, who was also a key supporter in Northwestern’s union effort a decade ago, said even if the NLRB decides that only USC (and not the NCAA or its conference) is an employer, the public-private differences may no longer be a deal-breaker.

“We’re in a whole different world than in 2014,” he told ESPN. “That ruling emphasized the need to have common rules when it comes to player benefits. But we’re in the NIL era where laws are different from state to state and rules are different from school to school. And it’s clear that hasn’t cause college sports has collapsed.”

Antitrust arguments

No corner of the justice system has done more to erode the NCAA’s amateurism rules than antitrust lawsuits. After defeats in major paradigm-shifting cases such as O’Bannon and Alston, which established that the Supreme Court no longer viewed college sports as fully immune from the rules that regulate other industries, the NCAA is currently defending four different antitrust cases directly related to compensating athletes (in addition to another case attacking its transfer rules).

Some — House v. NCAA and Hubbard v. NCAA — are primarily financial threats to the NCAA’s future, claiming that former athletes deserve some compensation for the opportunities they were denied before NIL and academic-based payment rule changes. The House case, which is much further along in the legal process than Hubbard, is scheduled to go to trial in January 2025. If the plaintiffs are successful, it could cost the NCAA and its schools billions of dollars.

That looming, devastating price tag could end up being the leverage that athletes need to force collective bargaining or an employment model. If the NCAA wants to settle the case before it is potentially ordered to pay billions, it would likely have to agree to some new business model in the process.

Two other antitrust cases, including the one filed last week by the Tennessee and Virginia attorneys general, are taking aim at what remains of the NCAA’s pay restrictions. One case, in its beginning stages, led by Duke football player Dewayne Carter, argues it’s illegal for the NCAA to place any restrictions on how schools compensate their athletes.

In the other case, Tennessee and Virginia argue the NCAA’s rules that prohibit the usage of NIL deals as a recruiting inducement are unfairly limiting athletes’ full potential to make money from boosters. The initial complaint said the NCAA’s current set of NIL rules “prohibits prospective college athletes and collectives from open and transparent interactions relating to NIL compensation and thus denies these athletes the ability to effectively negotiate their NIL rights at the very time they would best be able to maximize the value of those rights.”

A judge denied a request earlier this week to remove the NCAA’s NIL restrictions while the case is pending. But in his denial, the judge wrote that he saw sufficient evidence in the initial claims that current NCAA rules are “analogous to an absolute ban on competitive bidding, which the Supreme Court found to be anticompetitive ‘on its face.'”

Testing the Fair Labor Standards Act

A separate battle to declare college athletes as employees is underway in Philadelphia. Former Villanova football player Trey Johnson has filed a lawsuit claiming that college athletes meet the definition of employees under a separate part of American law — the Fair Labor Standards Act (FLSA).

Unlike in the NLRB cases, Johnson v. NCAA does not address the right to form a union, but argues that athletes should receive certain rights as employees — including an hourly wage.

The case has been waiting for nearly a year on a ruling from the Third Circuit Court of Appeals after a hearing last February. The NCAA is attempting to get the case dismissed based on precedent set in past cases, when the association successfully argued the unique nature of college sports makes it unnecessary to apply the usual FLSA tests to determine employee status.

The pending decision is only an intermediary step in a case that is likely to take months or years to reach a conclusion. However, if this appeals court decides in favor of the athletes, it could signal some form of employee status is inevitable, adding another pressure point for the NCAA or some of its schools to make major changes before the case reaches an official conclusion.

State law changes

State lawmakers are also chipping away at the association’s ability to enforce NIL-related rules.

Six states passed laws in 2023 that in some form prohibit the NCAA from penalizing athletes or schools for NIL rule violations. Most of those laws also make it easier for schools to help athletes find or fulfill NIL deals. The NCAA and its member schools initially tried to avoid helping athletes find deals directly due to concerns that courts would interpret the move as a creative workaround to employing players.

At least five other states are moving to implement similar laws this year, including Oregon, where a new bill was introduced earlier this week. Max Forer, a former Oregon football player who now leads the sports division of the Miller Nash law firm, testified in support of the bill Tuesday. He told ESPN that changes to state laws — fueled by schools who want to do more to help their athletes — may end up having as much impact as federal cases in forcing the NCAA to change its current system.

“State law evolution is eroding the NCAA’s ability to penalize or enforce their rules in the way they’d like to,” Forer said. “They can’t use their power to punish schools that are trying to help athletes. The state law piece is the piece the NCAA never really thought about.”

Both the NCAA’s national office and individual conferences and schools have tried to fend off state laws by asking Congress for a uniform federal law that reaffirms its ability to enforce rules and establishes that athletes should not be employees of their school. The NCAA says many of its schools could not afford to pay athletes as employees, and that employee status could lead to a bevy of new complications (worker’s compensation, Title IX regulations and visas for international students, to name a few) for their athletic departments.

While many leaders in college sports believe Congress remains their best hope for a manageable path forward, the association has made little tangible progress after several years of lobbying for a federal law. The result is a high-stakes, slow-motion race for the NCAA to convince Congress to act before the mounting pressure from all its legal woes forces a change.