Johnson v. NCAA: Why college sports fans need to pay attention to this court case

On the heels of three federal judges further tearing apart the NCAA’s already-frayed amateur model last week, the entire college athletics world is closely attuned to a case whose outcome could flip the college model on its head, potentially ushering in an entirely new era.

Johnson v. NCAA – just one of the slow-moving fights raging to designate athletes as employees of their universities – is among the reasons the NCAA is making what is viewed as a last-gasp appeal to Congress for a lifeline; why some forward-thinking universities already are modeling what a transformed landscape would look like; and why some conference commissioners and athletic directors are voicing concerns about what they believe would be fatal Title IX consequences for some non-revenue sports. 

The plaintiffs in Johnson v. NCAA, former Villanova football player Trey Johnson and other Division I athletes, are asking that athletes be deemed employees subject to the Fair Labor Standards Act. That requires covered employees be paid minimum wage and overtime pay. While the case’s focus is narrow, a determination that college athletes are employees would be monumental.

“It would fundamentally change the collegiate athletics model,” Mit Winter, a college sports attorney at Kennyhertz Perry in Kansas City, told On3 on Monday. “It would have broad implications for other pending proceedings and for college athletics as a whole.”

A ruling in the plaintiffs’ favor, Winter said, would not automatically lead to the formation of college athlete unions, collective bargaining and revenue sharing, all elements the NCAA is hell-bent on preventing. But it would lead to athletes being subject to various employment laws and workplace protections. And the National Labor Relations Board could use the outcome of Johnson v. NCAA to support a finding that college athletes are indeed employees of schools, conferences and/or the NCAA under the NLRB, and thus are entitled to unionize.

Appeals court didn’t buy NCAA’s argument

When the three-judge panel on the U.S. Court of Appeals for the Third Circuit in Philadelphia heard oral arguments last week, they weren’t considering the issue of whether the athletes are employees, per se. They were only considering the issue of whether the NCAA’s earlier motion to dismiss should have been granted. Regardless, the panel signaled that it believes at least some college athletes are employees of schools and also potentially the NCAA.

With pointed questions and stern commentary, the judges made clear they were not persuaded by arguments from Steven Katz, the NCAA’s attorney who asserted that college athletes are not professionals because they don’t have an expectation of compensation. They poked holes in Katz’s defense of the amateur model – and perceived consequences under an employee model – by pointing out the well-documented gender inequalities that came to light in recent years during the NCAA tournament and noting that conferences and schools are awash in media-rights revenue.

If athletes are deemed university employees, Katz said to expect a “minefield of unforeseen consequences,” a reference to a thicket of potentially significant Title IX implications that some believe could reverse a half-century of progress for female athletes. That sentiment is shared by various conference commissioners and athletic directors. In fact, if an employee model took hold, “we are going to see chaos across the country,” said Casey Schwab, CEO and founding partner of NIL advisory firm Altius Sports Partners who works with numerous schools.

Complete employee status ultimately could lead athletes to collectively bargain for university-provided benefits and perhaps receive a share of the revenue generated by athletic departments. That scenario, sources said, could create a seminal test of the power of Title IX, the federal law that bars discrimination on the basis of sex for any educational program or activity receiving federal financial assistance.

If Title IX still applies under the employee model, the protection would require the benefits that a university provides male and female athletes to be comparable, thus creating a sizable financial stress test for schools. And if Title IX does not apply to athlete-employees – keep in mind that football and men’s basketball fuel athletic departments’ economic engines – women’s sports (and non-revenue sports in general) would be vulnerable to being eliminated.

‘A very, very interesting fork in the road’

Under an employee model, how the courts ultimately interpret Title IX’s application is poised to be a “classic case down the road,” Tom McMillen, the former Maryland and NBA basketball player, U.S. congressman, Rhodes Scholar and now CEO of Lead1 Association, which advocates on policy issues facing FBS athletic departments, told me last year.

“This will be a very, very interesting fork in the road,” he said, “because I could see this going to the Supreme Court.”

In the view of Byron McLain, a Los Angeles-based partner at Foley & Lardner LLP, equitable protections for women under Title IX apply only to educational opportunities and not for those deemed employees. He wrote in a December 2021 article he co-authored on his firm’s website that the professionalization of college sports could spell the end of Title IX, saying that the unprecedented growth of women’s sports the last half-century could be “immediately stunted.”

But even if Title IX continues to provide protection, McMillen said, legal challenges abound. Consider if some male athletes believe profits of their labor are being proportioned unfairly to female athletes.

“If (male athletes) are getting 5 or 10 percent of the revenue, whatever it is, the revenue could have been twice that,” he said, hypothetically. “The men are getting $40,000 but (believe they) really should be getting $100,000 if it weren’t for Title IX. That’s the issue” that may be legally challenged.

The employee scenario may force some schools to operate under a new financial model, leading to existential athletic department decisions by campus leaders: Do we want to make college athletics on some campuses a purely educational enterprise – more like club sports or intramurals – or should certain sports teams be spun off from universities?

In recent years, the 7th Circuit and 9th Circuit courts have ruled that college athletes are not employees. But it’s now a brave new world when it comes to challenging the NCAA, especially after the U.S. Supreme Court’s unanimous ruling two years ago in the Alston case and after Justice Brett Kavanaugh effectively encouraged court challenges when he said the NCAA’s business model would be “flatly illegal in almost any other industry in America.”

As Johnson v. NCAA works its way through the courts – a ruling isn’t expected for months – the NCAA and new president Charlie Baker are left to appeal to Congress, hoping to convince it to pass a law stipulating that college athletes are not, and never can be, employees of schools, conferences and the NCAA. That is viewed as a longshot.

“It demonstrates that the NCAA is out of other options if it wants to keep the current college athletes model in place,” Winter said. “The courts are no longer reflexively accepting the NCAA’s amateurism arguments that worked in the past. So the only option left – besides acquiescing to a completely new model with athletes as employees – is asking Congress to change the law. I view that as a ‘Hail Mary.’ ”