The college sports employment case that looms as the NCAA's next pivotal court battle

New York Times

a day ago

The final settlement of the House v. NCAA antitrust lawsuit is a huge relief to college sports. It's the start of a new economic model and a chance for college sports leaders to show legislators and the public they are capable of change.
Here is what it is not: The end of their legal troubles.
Throughout the final stretch of this case, many involved have pointed to the next big one coming down the pike. Johnson vs. NCAA, which has been moving through the courts for almost six years now, gets into one of the thorniest issues in college sports: employment. It could be a clarifying win for the NCAA, or it could be the case that hastens the big changes many have predicted — football breaking away from the rest of college sports, and a football Super League.
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In February 2019, Ralph 'Trey' Johnson, a former running back at Villanova, sued the NCAA and nearly a dozen schools, claiming that athletes should be recognized as employees under the Fair Labor Standards Act. The case has slowly wound through the system, growing to include other former athletes while NCAA efforts to have the case dismissed have been swatted away.
Essentially, the Johnson side argues that the NCAA and its schools have gotten away for decades — and continue to do so, even in the age of name, image and likeness payments and revenue sharing — with having athletes take part in a relationship that has all the appearances of employment, without paying them an hourly wage.
'Athletes should have the same, limited student employee status as classmates selling popcorn at NCAA games,' said Paul McDonald, the lead lawyer for the Johnson side.
The NCAA argues that the arrangement has worked for decades, benefits athletes and still works for them, especially with NIL, revenue sharing and cost-of-attendance payments added to the pile. But the organization also seems to acknowledge this as another challenge to the system, and hopes it can be solved through federal legislation rather than the courts.
'The NCAA is making changes to deliver more financial benefits to student-athletes but there are issues such as employment that can only be addressed by Congress,' the NCAA said in a statement to The Athletic this spring. 'The Association looks forward to working with student-athletes and lawmakers to set a stable, and sustainable future for all 500,000 student-athletes.'
The case could go to trial as early as next year. There's always a chance the NCAA and the plaintiffs will settle, as in the House case, which leads to new rules and perhaps collective bargaining. But for now, both sides seem dug in.
McDonald sees this as a civil rights and fairness issue, and asks why athletes aren't treated the same as student concession stand workers, teaching assistants or any student who does work for the university and is considered an employee. Those students are usually paid hourly, often minimum wage, because they are performing a job. McDonald argues athletes should have the same 'equal treatment' to classmates in work-study student employment, some of whom are also on academic scholarships that don't preclude them from earning a wage.
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'This would be easy to implement using NCAA-mandated timesheets, and affordable on hourly, minimum wage scales — particularly if colleges stop overpaying some coaches,' McDonald said. 'Colleges have never explained why they oppose this easy and equitable solution.'
Johnson filed his case before the NIL and revenue sharing eras began, but McDonald argues that should have no impact: While NIL payments are based on an individual's popularity and revenue sharing rewards a sport's popularity, all athletes should be deemed employees because they are performing a job.
For several reasons, colleges and universities are very much against employment. There's the culture of college athletics, the idea that these are students seeking a degree and also playing sports, rather than paid athletes. Some cynics say there's a measure of control involved too, especially with the coach-player dynamic. And of course, there's the money. Every employee has a salary and other costs attached, and paying them all hourly wages would wreck budgets.
The SEC and a group of education associations filed an amicus brief in the Johnson case, warning that only 2 percent of NCAA member schools generate enough revenue to cover operating costs. 'If colleges and universities are forced to pay their student-athletes (as employees) it is inevitable that many schools will simply eliminate athletics teams, with non-revenue sports teams the most likely to be on the chopping block,' the brief read.
The other possible result: The richest schools pulling away from the rest of the NCAA, as the disparity between the haves and have-nots widens. Every school, even the big brands, is adjusting costs and chasing more revenue to pay for revenue sharing. Employment for athletes could prompt another wave of cost-adjusting and revenue-chasing.
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Preventing athletes from being employees has been a central focus of the NCAA in federal legislation, and the House of Representatives' Education and Workforce committee plans to work to codify that restriction as part of a set of bills in the works from three House committees this week. Of course, any federal law could still be challenged in the courts, which is why outside observers think this will still be settled there.
What constitutes employment can be a complicated issue, including various tests. Does the employer have the right to hire and fire the employee? Does the employer set rules and working hours? How much day-to-day supervision is involved? There have been court cases before on employment status, but none quite like this.
'In the employment law world, you have employees and you have non-employees. There's only two buckets,' said Josh Nadreau, an employment lawyer in Massachusetts who has advised some schools on employment issues. 'And I think with respect to looking at student athletes, to try to put them into this two-bucket paradigm is complicated.'
There could be a lesson in what the Third Circuit said last year when it denied the NCAA's attempt to dismiss the case. The circuit court judges devised a test to determine whether athletes are employees, which could lead to different conclusions about athletes in revenue versus non-revenue sports.
'They're not subject to the same pressures, they're not subject to the same economic forces,' Nadreau said. 'I think at some point we'll start drawing circles around different groups, some will be employees and some will not.'
For many, that's the clean solution, but McDonald is not distinguishing between sports in his arguments. Field hockey players, though their sport is not a revenue driver, also work hard and compete for their school, serving essentially as brand ambassadors, and have expectations from their coaches. Meanwhile, the NCAA has expressed no interest in granting hourly wages to any athletes, even those in football and basketball, hoping the House settlement's revenue-sharing structure shows that athletes are now being sufficiently paid.
One final caveat: Expecting this to play out the same way as the House case ignores that it has a different lawyer and is also starting on the opposite coast. The House case, led by Steve Berman and Jeffrey Kessler, went before the same federal judge, Claude Wilken, in California, who oversaw the Alston case (also led by Berman and Kessler) that eventually went to the U.S. Supreme Court, which ruled unanimously against the NCAA's ability to cap education-related benefits. The Johnson case was filed in Pennsylvania, which the Third Circuit oversees, so it could proceed predominantly on the East Coast.
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But unless and until the case makes it to the Supreme Court — or gets settled — there could still be more lawsuits and differing rulings. The result could be a mish-mash of laws, with athletes' employment statuses depending on where you live.
'The question of common sense comes down to who's deciding,' Nadreau said. 'What some people might say is common sense might be different than the rest of the country.'