Challenges to the rules of the National Collegiate Athletics Association (NCAA) have increased in recent years. The U.S. Supreme Court struck the NCAA’s rule against paying intercollegiate athletes for use of their name, image and likeness (NIL) in 2021.[1] The General Counsel of the National Labor Relations Board, a federal agency that regulates labor relations in the private sector, stated that intercollegiate athletes can be classified as employees and allowed them to attempt to unionize[2]—as the recent case involving Dartmouth College demonstrated.[3] The NCAA and several Division I athletic conferences recently settled a $2.8 billion lawsuit brought by former intercollegiate athletes who demanded payment for NIL usage that accrued prior to the Supreme Court’s 2021 ruling.[4] And on July 11, 2024, the U.S. Court of Appeals for the Third Circuit ruled that six intercollegiate athletes could maintain a lawsuit against the NCAA and the institutions they attended that claims that they are employees under the federal Fair Labor Standards Act (FLSA) and thus deserve pay for the time spent in athletics activities.[5]

The students, who had participated in one or more Division I sports (including football, baseball, swimming and diving, tennis, and soccer), claimed that the amount of control of their activities levied by their coaches, and the restrictions on how they spent their time while enrolled, meant that they met the requirements of the wage and hour law for employment protection. Thus, they claimed, they deserved at least minimum wage for the hours that they spent in these mandatory activities. The defendants disagreed, arguing that the students were amateur athletes, not professionals, and did not qualify for the protections of the FLSA. The defendants moved to have the case dismissed by the U.S. District Court for the Eastern District of Pennsylvania, but that court denied the motion, ruling that Division I intercollegiate athletes were analogous to unpaid interns.[6] That court analyzed the students’ claims under a test used by the U.S. Department of Labor for determining whether interns were entitled to pay under the  FLSA.[7] The court also reviewed a 2016 case, Glatt v. Fox Searchlight Pictures, Inc.,[8] that analyzed whether college students serving as interns should be paid. The trial court in Johnson found that the allegations of the students with respect to the time they spent, their lack of control over how they spent their time, and several other of the factors involving interns, could meet the test for employee status, and that dismissal was inappropriate. The NCAA and college defendants asked the trial court to certify its ruling for an interlocutory appeal, rather than waiting until the trial court had ruled on the merits, and that court did so.[9] The appellate court agreed to hear the appeal.

On July 11, 2024, the U.S. Court of Appeals ruled 3-0 that the students could proceed with their case.[10] The appellate court rejected the “amateurism” defense, and agreed with the trial court’s denial of the motion to dismiss, although for other reasons, finding that the students might be able to provide sufficient evidence to meet the FLSA requirements for employee status. The appellate court found that the trial court’s use of the test for interns was erroneous, but affirmed the trial court’s ruling on different grounds. The appellate court said that the Glatt test did not control this set of facts because interns are learning skills that relate to their academic training, while intercollegiate athletics did not relate to the students’ academic curriculum. The court noted that time spent in required athletics activities actually was detrimental to the students’ academic performance because the time and scheduling requirements interfered with their choice of courses and, in some cases, their choice of majors.

Referring to earlier cases involving the determination of whether a particular individual or set of individuals were “employees” entitled to FLSA protections, the appellate court created a four-part test:

1. Whether the individual(s) perform services for another party;

2. Whether the services are necessarily and primarily for the other party’s benefit;

3. Whether the individual(s) are under that party’s control or right of control; and

4. Whether the services are performed in return for express or implied compensation or in-kind benefits.[11]

The court added: “The touchstone remains whether the cumulative circumstances of the relationship between the athlete and the college or NCAA reveal an economic reality that is that of an employee-employer.”[12]

It is likely that this litigation will be protracted because the stakes are so high and the arguments are so novel. A ruling that Division I intercollegiate athletes are employees could potentially entitle them to additional protections under other employment laws, such as worker’s compensation, employment discrimination laws, collective bargaining laws, or Social Security requirements, to name a few. For colleges and universities, determining which laws may apply, and whether a particular issue involves the athlete’s status as a student or as an employee, could be complicated. The application of laws affecting intercollegiate athletics has changed dramatically in just a few years, and it is quite likely that more change will come. 

For any questions on how this information may affect your institution, please contact Barbara A. Lee, any attorney in Bond’s higher education practice or the Bond attorney with whom you regularly work.

[1] Alston v. NCAA, 141 S. Ct. 2141 (2021).

[2] NLRB, Statutory Rights of Players at Academic Institutions (Student-Athletes) under the National Labor Relations Act, General Counsel Memorandum 21-08, September 29, 2021.

[3] On February 5, 2024, a NLRB Regional Director ruled that the players on Dartmouth College’s varsity basketball team were employees under the NLRA’s definition, and ordered the College to bargain with the union representing these players. Trustees of Dartmouth College, Case No. 01-RC-325633 (February 5, 2024). The players voted to be represented by a union later that spring.

[4] Kristi Dosh, “10 Things to Know about the NCAA’s House Settlement,” Forbes, May 24, 2024, available at https://www.forbes.com/sites/kristidosh/2024/05/24/10-things-to-know-about-the-ncaas-house-settlement/

[5] Johnson v. NCAA, 2024 U.S. App. LEXIS 16953 (3d Cir. July 11, 2024).

[6] Johnson v. NCAA, 556 F. Supp. 3d 491 (E.D. Pa. 2021).

[7] U.S. Department of Labor. Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act, January 2018. https://www.dol.gov/agencies/whd/fact-sheets/71-flsa-internships.

[8] 811 F.3d 528 (2d Cir. 2016).

[9] 2021 U.S. Dist. LEXIS 246324 (December 28, 2021). An interlocutory appeal is an appeal of a ruling that is not final; its purpose is to resolve an unresolved matter of law prior to a ruling on the merits of a case.

[10] Although all three judges supported the outcome of the case, one judge, in a concurring opinion, stated that he disagreed with the reasoning of the case, but not its outcome.

[11] Johnson v. NCAA, 2024 U.S. App. LEXIS 26953 at *30.

[12]  Id.

Only about .007% of athletes who complete in NCAA sports are transgender. However, this group has attracted an outsized amount of social, media, regulatory and now litigant, attention. Under National Collegiate Athletic Association (NCAA) rules dating to January 2022, transgender female athletes may compete in women’s events if the national governing body for the specific sport allows transgender athletes to compete.

Read More >> Past and Present College Athletes Sue NCAA Over Transgender Participation Rules

As part of the NCAA’s efforts to promote diversity and gender equity in intercollegiate athletics, NCAA Bylaw 20.2.4.3 requires that all Division I athletic departments perform a diversity, equity and inclusion (DEI) assessment and file an attestation of completion of the review with the NCAA by November 3, 2023.   

Read More >> November 3, 2023 Deadline for NCAA Division I DEI Self-Assessment and Attestation

It is a common practice in collegiate athletics to separate teams in two or more “tiers” of “major” and “minor” or “revenue” and “non-revenue” sports. Tiering may not be explicitly intended by administrators, but informal tiering is relatively common by virtue of emphasizing some teams over others. While tiering is not per se a violation of Title IX, it must be organized properly to avoid violations.

Read More >> Hot Topics in Title IX Athletics: Does Having Separate Classifications for “Major” and “Minor” Sports Violate Title IX?

Introduction 

In February 2023, the U.S. Department of Education’s Office for Civil Rights (OCR) issued a resource to the higher education community reiterating some of the core concepts it uses to evaluate whether institutions are providing equal athletic opportunities consistent with Title IX. For colleges and universities, this new resource should serve as a not-so-subtle prompt to review their programs for compliance with applicable standards. 

Read More >> OCR Issues New Guidance on the Application of Title IX in Higher Education Athletics

The National Labor Relations Board (NLRB) General Counsel has issued a complaint against the University of Southern California (USC), the Pac-12 Conference and the NCAA claiming that certain USC student-athletes are employees under the National Labor Relations Act (NLRA), and that the conference and the NCAA, along with the university, can be held jointly responsible employers for the treatment of those students under the law. This NLRB litigation portends fundamental consequences for private college and university athletic programs.

Read More >> NLRB Asserts Employment Protections for Student-Athletes and Seeks to Hold the University of Southern California, Pac-12 Conference and NCAA Liable

In its Bostock v. Clayton County, Georgia ruling in June 2020, the U.S. Supreme Court ruled that the prohibition on “sex” discrimination under Title VII of the Civil Rights Act of 1964 encompasses discrimination on the basis of sexual orientation and/or gender identity. The Bostock ruling raised, but did not decide, the question of whether or not other federal sex discrimination laws, such as Title IX of the Education Amendments of 1972 and the Fair Housing Act, might also inherently prohibit LGBTQ+ discrimination. While the Bostock ruling applies only to Title VII claims, the Biden administration has announced that federal agencies will apply Bostock’s definition of “sex” to other federal civil rights laws. On the day he was inaugurated, Jan. 20, 2021, President Biden issued an executive order stating that federal sex discrimination laws besides Title VII – including Title IX and the Fair Housing Act – should be interpreted as prohibiting gender identity and sexual orientation discrimination. Subsequently, in June 2021, the U.S. Department of Education (ED) issued guidance that Title IX prohibits LGBTQ+ discrimination. In addition, in February 2021, the U.S. Department of Housing and Urban Development (HUD) announced that it would enforce the sex discrimination provisions of the Fair Housing Act as encompassing LGBTQ+ discrimination.

Read More >> Implications for Colleges and Universities of Expanded Legal Protections for LGBTQ+ Students, Faculty and Staff

The General Counsel for the National Labor Relations Board (NLRB or Board), who has authority for setting prosecutorial policy for the NLRB, issued a General Counsel Memorandum (GC Memo) today, reversing the prior Board General Counsel’s position and asserting the employee status of certain student athletes at private educational institutions. Board General Counsel Jennifer Abruzzo conveyed her enforcement position in a memorandum to the Board’s Regional Directors. Because non-unionized employees have rights under the federal labor law, the immediate impact will be that the NLRB’s enforcement arm will be processing complaints related to allegations of adverse treatment of certain student athletes for all variety of internal complaints against private institutions.

Read More >> NLRB General Counsel Abruzzo Issues Memo on Employee Status of Players at Academic Institutions

One month has passed since the NCAA Board of Directors adopted emergency legislation permitting student-athletes to monetize their name, image and likeness (NIL) without violating the long-standing amateurism requirements of NCAA Bylaw 12. Specifically, the NCAA: (1) acknowledged that a state law/executive order regarding NIL supersedes NCAA rules; and (2) provided blanket NIL coverage to student-athletes located in states that do not have a state law/executive order in place. This major change in NCAA legislation is charting new pathways for how student-athletes must be monitored by their institutions to avoid ineligibility. The creation of an internal institutional policy is one way to help organize and manage this new process.

Read More >> NCAA Student-Athlete Name, Image and Likeness

On June 21, 2021, in an opinion providing a very interesting historical overview of collegiate athletics going back to the 19th century and the founding of what is now the National Collegiate Athletic Association (NCAA), the U.S. Supreme Court released its decision in the NCAA v. Alston case. The Supreme Court affirmed the lower court’s injunction of NCAA rules that restrict education-related benefits to Division I basketball and bowl subdivision football student-athletes. 

Read More >> NCAA v. Alston Case: Supreme Court Strikes Down NCAA Rules Restricting Benefits to Student-Athletes

On April 24, 2020, the Tenth Circuit Court of Appeals revived a former college coach’s retaliation claim brought against his previous employer. The case, Marc Benjamin v. Board of Trustees of Barton Community College, involves a former women’s softball coach who claimed he was terminated by the college because he “blew the whistle” on other college coaches who had violated league rules. The district court that first heard the case granted summary judgment in favor of the college, effectively finding that no reasonable jury could find in favor of Mr. Benjamin’s claims. Mr. Benjamin appealed, and the Tenth Circuit subsequently reversed the district court’s decision. 

Read More >> Tenth Circuit Decision Reminds Educational Institutions to be Wary of Whistleblower Retaliation Claims

The Supreme Court of the United States has denied both the NCAA’s and plaintiffs’ petitions for certiorari in the O’Bannon case.  The parties had petitioned for review of the United States Court of Appeals for the Ninth Circuit’s decision issued in September 2015. In that decision, the Ninth Circuit sided with the NCAA by vacating that portion of the District Court’s decision that would have required the NCAA to allow member institutions to pay limited deferred compensation to student-athletes for the use of their names, images and likenesses. At the same time, the Ninth Circuit also partly favored plaintiffs by upholding that part of the District Court’s ruling that enjoined the NCAA from enforcing its rules precluding member institutions from providing athletic scholarships up to the full cost of attendance. The Supreme Court’s denial, which signifies only that it declined to review the case and not that it agreed with the Ninth Circuit’s decision, means that the Ninth Circuit’s decision will stand unchanged.