SPORTS INDUSTRY
2024 RECAP
House v. NCAA Settlement
Johnson v. NCAA Litigation
• May 2024: The NCAA and the Power Five conferences agreed to a $2.7 billion settlement in the House v. NCAA class-action lawsuit. This settlement will allow schools to pay student-athletes directly for the first time ever, and includes back payments to athletes who were previously prohibited from earning endorsement money. • October 2024: A federal judge granted preliminary approval over the settlement. • Current Status: Interested parties can file objections until January. A fairness hearing will take place in April 2025, after which the judge will issue her final decision.
• July 2024: The 3rd Circuit Court of Appeals became the first federal appeals court to rule that student-athletes at NCAA Division I schools can bring lawsuits claiming they are employees and may be entitled to minimum wage and overtime payments under federal wage and hour law. This decision runs in conflict with two other federal appeals courts and prior DOL Guidance stating that interscholastic athlete participation in extracurricular activities does not create an employment relationship.
2024 RECAP
Student-Athlete Employee Status Battle Waged All Year
The fight over the status of collegiate student-athletes took place on at least four different fronts in 2024. We’ll recap what happened and give you a current status for each of them.
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Current Status: Plaintiffs in the Johnson case filed a Third Amended Complaint on November 4. The defendant universities and NCAA have until February 7 to respond. The House settlement described above will not resolve this litigation as they apply to two different areas of law. What Will Happen in 2025? We expect one or more of the individual universities and the NCAA to file renewed motions to dismiss the most recent Complaint, possibly teeing the case up for another trip to the Third Circuit Court of Appeals, and perhaps a request for Supreme Court intervention. We also believe the Republican-held Congress could step in to resolve the matter given the outsized importance this matter holds in many states.
Dartmouth Case
USC Case
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What Will Happen in 2025? We expect the judge to approve the settlement, perhaps with some minor tweaks. We’ll see student-athletes enjoy direct payments and benefits from a pool made up of 22% of the Power Five schools’ average athletic annual revenue – estimated to be worth over $20 billion over the life of the deal. All scholarship limits will be eliminated and replaced with roster limits. We’ll also start to see an advent in new Title IX litigation when female athletes test the pay equity structure of the restructured system. But this decision will not resolve the underlying question of whether student-athletes are “employees” for union or other purposes.
• February 2024: The National Labor Relations Board (NLRB) Regional Director in Boston ruled that Dartmouth College men’s basketball players are employees under the National Labor Relations Act (NLRA) and allowed them to hold a union election. • March 2024: After the men’s team voted 13-2 in favor of unionizing under the SEIU, Dartmouth declined to negotiate with them and maintained they were student-athletes and not employees. • August 2024: The union representing the players filed an unfair labor practice (ULP) complaint against the college for refusing to bargain with the players.
• May 2023: The NLRB’s Los Angeles Regional Office issued a ULP complaint against USC, its conference, and the NCAA itself, alleging they unlawfully misclassified players as student-athletes rather than employees.
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• August 2024: The parties closed the
administrative hearing and filed their post- hearing briefs. Current Status: The case is now pending and the ALJ could issue a decision at any time.
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• What Will Happen in 2025? We do expect Trump to fire the NLRB’s General Counsel shortly after his inauguration, just as Biden did with her predecessor. If the ALJ rules in favor of USC, the new Trump-appointed GC won’t appeal and will let the case die. If the ALJ rules in favor of the student-athletes, the decision would go to the full NLRB – and see above for a discussion about what to expect then.
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Current Status: The case remains pending at the Board on a request for review. What Will Happen in 2025? The wild card here is knowing when the Republicans will retake control of the NLRB. It appears at time of publication that the current Board chair’s pending nomination will fail. That means that President Trump could start his second term with two vacancies he can fill with GOP appointees. The outcome of the Dartmouth case will hinge in the balance.
Do You Have Your Investigation House in Order? Dominating headlines in 2024 yet again were story after story about alleged inappropriate conduct in professional and collegiate sports settings. From harassment to toxicity, and from pay equity to discrimination, you should feel lucky if you escaped this past year without such a claim in your inbox. But don’t press your luck in 2025. Make sure you proactively engage FP counsel to establish best practices that better your odds and your success rate, and call on our Workplace Investigations team should you face the need.
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Adam F. Sloustcher
Todd B. Scherwin
Dallas/San Diego Regional Managing Partner and Co-Chair, Sports Team asloustcher@fisherphillips.com
Los Angeles/Woodland Hills Regional Managing Partner and Co-Chair, Sports Team tscherwin@fisherphillips.com
Joshua D. Nadreau
Boston Regional Managing Partner and Vice Chair, Labor Relations Group jnadreau@fisherphillips.com
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