December 23, 2024

The most legally significant development in college sports in 2024 occurred in February, when NLRB regional director Laura Sacks ruled that Dartmouth College men’s basketball players were employees within the meaning of the National Labor Relations Act (NLRA). 
She stressed the relevant legal question is not whether the basketball program is profitable—major companies report losses from time to time and their employees don’t suddenly become interns—and implicitly urged that people view the matter as one about labor, not sports. To that end, Sacks said the players are employees because they qualify under the applicable legal test: They perform work for Dartmouth in exchange for compensation (including preferred admissions into an elite university, per diem, clothing, sneakers, etc.) and the school has the right to control that work. 
Key to the situation: Dartmouth College has a tradition of employing students who in turn unionize, as students who work in dining services have done so and their union negotiated terms with their employer (i.e., Dartmouth). The Dartmouth basketball players, including one who also works in dining services, then voted to unionize. The players became the first unionized collegiate employee-athletes in American history.
Dartmouth College has petitioned the agency’s board to review and reverse Sacks’ ruling, but as of this writing, the board has not decided whether to review, let alone reverse. 
USC football and men’s and women’s basketball players could soon gain NLRA employment recognition as well. NLRB Administrative Law Judge Eleanor Laws is reviewing whether the University of Southern California, the Pac-12 and the NCAA are joint employers of Trojan football and men’s and women’s basketball players. She will determine whether USC athletes are employees within the meaning of the NLRA and misclassified as student-athletes.
Much has been speculated of President-elect Donald Trump reshaping the NLRB in ways that may be less amenable to a finding that college athletes are employees, but that might not prove true. Even if it does, it might not ultimately matter. The issue of whether these athletes are employees will almost certainly go from the NLRB to review by a federal court of appeals and possibly the U.S. Supreme Court. In other words, the NLRB is not going to have the final say. 

Also, if the Dartmouth players continue to remain unionized employees, it will set the table for other D-I athletes at private colleges to seek unionization. The prospective employment of athletes at public universities isn’t governed by the NLRA but is instead subject to state labor laws that vary widely across the country. 
Baker was known as a pragmatic dealmaker rather than an ideologue while he served as governor. That mentality seemed apparent when the NCAA, which for decades has stridently fought to separate college athletes from professional athletes, negotiated a settlement to resolve the House, Carter and Hubbard antitrust litigations that would feature colleges directly paying athletes subject to a pro sports salary-cap style limit. 
The settlement also calls for the NCAA and member institutions to pay some D-I athletes who have played since 2016 about $2.8 billion, with payments ranging widely by sport and other factors. The payments would occur over a 10-year period and reflect compensation for depriving athletes of NIL, video game and broadcast opportunities in recent years. 
U.S. District Judge Claudia Wilken granted preliminary approval to the settlement and will consider giving final approval after hearing from objections and other concerns in a fairness hearing scheduled for April 7, 2025. Assuming the deal moves forward, colleges can elect to pay athletes for media rights, ticket sales sponsorships and NIL. Those schools, however, cannot exceed annual payments of about $21 million total. Also, NIL deals with third parties that exceed $600 will be subject to potential independent review to ensure those deals aren’t pay-for-play arrangements cloaked as NIL deals.
Wilken’s review of the settlement is based on whether it addresses the antitrust issues at play in the three cases and whether the settlement complies with the legal requirement that it is fair, reasonable and adequate to class members. It is possible that implementation of the settlement will trigger separate legal challenges under Title IX, the Equal Pay Act and immigration and other laws, but Wilken will focus on the antitrust components. 
There’s no getting around the fact that college sports in the post-settlement world will look more like pro sports. Some teams are getting ahead of the curve by hiring general managers and others whose job responsibilities parrot those employed by pro teams.

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