Student-Athletes Score In SCOTUS Decision Declaring that the NCAA is “Not Above the Law”
Student-athletes are gaining headway in their fight for additional compensation in exchange for the benefit they provide to the NCAA and its membership institutions. On Monday, the U.S. Supreme Court unanimously affirmed a ruling that struck down part of the NCAA amateurism rules restricting education-related compensation for student-athletes. In NCAA v. Alston, the athletes argued that that the NCAA’s restrictions on eligibility and compensation violate antitrust laws by preventing them from receiving fair-market compensation. The California district court agreed in part and entered an injunction barring the NCAA from prohibiting member schools from offering education-related benefits to student-athletes but refused to enjoin other NCAA restrictions on athlete compensation. The Ninth Circuit upheld the injunction, and the NCAA and athletic conferences appealed. The Supreme Court decision again sided with the athletes in allowing schools to provide education-related benefits.
Throughout this litigation and in the media, the NCAA has repeatedly argued that amateurism rules are necessary for the NCAA to function and differentiate itself from the professional leagues. Notably, the Court’s ruling was limited to the educational benefits issue and the Court did not decide whether the NCAA’s “amateurism” business rationale would justify other NCAA compensation restrictions because the student-athletes did not seek Supreme Court review of the lower court’s refusal to enjoin these other restrictions. Justice Kavanaugh, however, in a concurring opinion, signaled unequivocally that in his opinion, other NCAA compensation restrictions were equally problematic from an antitrust perspective, stating among other things that “[n]owhere else in America can businesses get away with agreeing not to pay their workers a fair market rate on the theory that their product is defined by not paying their workers a fair market rate. And under ordinary principles of antitrust law, it is not evident why college sports should be any different. The NCAA is not above the law.”
From a labor and employment law perspective, Justice Kavanaugh’s explicit recognition that student-athletes are akin to employees and provide “labor” to NCAA member schools is certain to rekindle the debate about whether the student-athlete relationship should be regulated under labor and employment laws, such as the National Labor Relations Act. Justice Kavanaugh even went so far as to note that unanswered questions could be resolved through Congress passing legislation or potentially through collective bargaining. While prior efforts to gain “employee” status for student-athletes have largely fallen short, Justice Kavanaugh’s concurrence may re-ignite this debate unless a comprehensive legislative solution is reached.
In light of the Supreme Court’s ruling, state and federal legislative efforts will undoubtedly take on a greater sense of urgency. The Alston decision is narrowly tailored and does not overturn amateurism any further. As Justice Gorsuch notes in his majority opinion, the NCAA has “considerable leeway” in deciding how to define an education-related benefit. However, numerous states have already passed laws allowing athletes in those states to earn money for the use of their names, images and likenesses (“NIL”), such as through sponsorships, endorsements and social media. Some of those laws take effect as early as July 1, 2021 including those in Alabama, Florida, Georgia, Mississippi, and New Mexico. The NCAA has not yet agreed to extend similar rights to student-athletes nation-wide, and the growing “patchwork” of differing state laws has increased the urgency for a comprehensive federal legislative solution.
Certainly, there will be much more to come on the treatment and compensation of student-athletes. Please contact your Franczek attorney with any questions.