Ongoing Developments and Impacts of U.S. Supreme Court Ruling Against NCAA Student-Athlete Compensation

In January of this year, the NCAA adopted a new constitution.  It is the first time the group’s governing document has been revised since 1997.  In addition to providing for a student athlete to serve on each division’s presidential body and the NCAA Board of Governors, the new constitution supports members’ providing additional educational and other benefits to athletes including benefits derived from athletes’ NIL’s.  The document retained its prohibition of pay-for-play, however.^x    

The NCAA has called on the US Congress to pass legislating addressing these issues, especially the NIL compensation change.^xi Congressional action would relieve pressure on the NCAA and assure a consistent standard that fleshes out rules as to exactly how the change would operate nationwide. Congress has shown interest in the matter by holding hearings and bipartisan talks on the subject.  Also, according to the Congressional Research Service, 8 bills on the subject were introduced in the 116th Congress and 3 in the 117th Congress.^xii Though none of the bills passed, they did propose solutions to many of the issues confronting the NCAA and its members at present as to how best to implement the change in the NCAA rules and the parameters of the new rules’ operation.

Other Post Supreme Court Decision Developments:

Recently, the next shoe dropped in the ongoing saga of the legal status of students who participate in college athletics.  On September 29, 2021, the National Labor Relations Board (NLRB) General Counsel issued a memorandum to all NLRB field offices with updated guidance to the effect that athletes at academic institutions are “employees” for purposes of the National Labor Relations Act (NLRA), enjoying the rights and protections that accompany such status.^xiii According to the memorandum, “{p}layers at Academic Institutions perform services for institutions in return for compensation and subject to their control.”  Thus, they constitute “statutory employees” under the NLRA with the “right to act collectively to improve their terms and conditions of employment.”^xiv The full impact of the memorandum is unclear; however, the possibility certainly exists that athletes at academic institutions will be granted the right to form unions and collectively bargain for pay and other benefits.

Not surprisingly, following this development, on February 8, 2022, the National College Players Association (NCPA) filed a complaint with the NLRB lodging unfair labor practices charges against the NCAA, the PAC-12 Conference, the University of California at Los Angeles and the University of Southern California. Specifically, the NCPA alleges that the parties in question misclassified the athletes and interfered with their rights to discuss compensation and working conditions.^xv   

Risk Management Ramifications:

In light of the NCAA and state rules regarding player NIL rights, it appears certain that college athletic programs will be laser-focused on developing strong NIL support teams to help with implementation of the rule changes. Funds from other less lucrative athletic programs will likely shift to NIL management and implementation, as will the attention of academic and sports leadership. In light of these new and substantial responsibilities, there are concerns about how college athletic departments will continue to manage other serious risks that still plague their athletic programs.  

Careful monitoring of the practices, policies, and protocols of the traditional ongoing risks such as the traumatic brain injury (TBI) program, competition-related heat-stress issues, athlete involvement in Title IX and other related behavioral violations is critically important. These negative headline grabbing issues have placed considerable pressure on athletic programs to better manage their staff and players and these risks remain. Campus risk managers are already taxed to their limits by dealing with the daily onslaught of compliance and regulatory matters.

Because the new rules applicable to college athletes will generate added work for college officials, the time may have come for athletic programs to expend a portion of the revenue they generate to employ “dedicated” athletic program risk managers. Academic institutions currently employ business managers/officers specifically assigned to large academic programs to ensure budgets are managed effectively and legally. The same logic suggests that creating an athletic program-specific risk management program would be money very well spent.  Such a program could operate under the supervision of the academic institution’s chief risk manager.  In this area of fast paced change (pay-to-play may even be on the horizon), with significant risks that simply cannot be neglected, a dedicated athletic risk manager may be the best way to continue to protect academic institutions against significant risks while also implementing these significant NCAA changes.