Zoe Smith
Associate Editor
Loyola University Chicago School of Law, JD 2026
Will name, image, and likeness (NIL) accelerate or hinder student-athletes being classified as employees? NIL refers to a person’s legal right to control how their image is used. For several years, college athletes forfeited these rights when they signed with collegiate sports teams. However, three years ago, NCAA rules changed, allowing athletes to profit off their NIL. Even without NIL deals, an increasing number of student-athletes have sought compensation while playing for universities. Student-athletes have sought compensation ranging from travel expenses to minimum wage. Historically, student-athletes have not been considered employees under labor and employment laws. Recently, courts have been divided on whether athletes receiving compensation should be considered a student or an employee. The addition of NIL rights that allows student-athletes to receive payment might be the factor that will ultimately decide this issue.
History of classifying student-athletes as non-employees
The National Labor Relations Board (NLRB) has recognized that college athletes receiving athletic scholarships may constitute “employees.” Yet in 2016, the Seventh Circuit Court of Appeals held that student-athletes were not employees eligible for minimum wage compensation under the Fair Labor Standards Act (FLSA) in Berger v. NCAA. According to Berger, to be considered an employee under the FLSA one must perform “work” for an “employer.” The court reasoned that the athletes did not meet this standard because they are considered “amateurs” and that is distinguishable from a traditional employer-employee relationship.
Increasing calls for re-classification
Many D-1 student-athletes and their supporters believe they should be classified as employees evidenced by the class action suits discussed below. After all, the schools control the players’ work hours by setting requirements on practices, training sessions, mealtimes, and travel. Furthermore, colleges control the athletes’ ability to conduct interviews and express their viewpoints.
After the decision in Berger, a new case was filed in the United States Eastern District Court of Pennsylvania in 2019 – Johnson v. NCAA. While the student-athletes in Berger were track athletes, Johnson involved a D-1 football player, along with other D-1 athletes. This time, the athletes claim they are entitled to back pay and damages for unjust enrichment. It is clear that schools and other member institutions profit at the athlete’s expense. Michael Hsu, the leader of the College Basketball Players Association, states, “There is no debate [the athletes] are generating billions of dollars for the industry or that they’re under the control of their schools, conference and the NCAA.” The Third Circuit Court of Appeals in releasing their opinion on the case ruled that college athletes may be considered employees under the FLSA, meaning they could be eligible for minimum wage/overtime pay; but remanded to the district court for determination of whether the students were properly classified as employees. This case remains pending in the district court, awaiting a final decision.
How may NIL rights affect the classification of student-athletes?
The new NCAA interim policy concerning NIL was passed in June 2021. It allows athletes to engage in NIL activities if they follow state laws and schools ensure such activities comply with state law. If a state does not have NIL laws, athletes can still participate in NIL activities without violating NCAA rules. If student-athletes were to become university employees, it would only be natural for the schools to request the use of the athlete’s NIL as part of a compensation package – something that is not allowed under the current policy. This may require athletes to surrender some of their economic freedom in a contract, which would restrict their ability to negotiate or even receive other NIL deals. While this may favor student-athletes as employees from the school’s viewpoints, athletes may not think the same.
NIL has already created an unequal playing field for many student-athletes as it heavily favors male athletes at top institutions. Furthermore, if student-athletes are classified as employees, it is likely those athletes that do have brand deals may suddenly face restrictions by their school on those deals that they did not have before. Institutions already place barriers on certain brand partnerships with students, employment status will likely only increase this.
While employee classification may have a potentially detrimental effect on NIL, federal regulation concerning NIL may help. The Johnson decision will likely force Congress to release federal regulation concerning NIL and employment status for student-athletes. The NCAA has been asking Congress for a federal bill relating to NIL since 2021 without success. It is unlikely we will see regulations any time soon, but we can expect that such regulation will determine how NIL affects athlete employment classification.
Conclusion
Classifying college athletes as employees is unlikely to help their situation, instead it would make it worse. Schools would face significant cost increases, not only regarding wages/salaries, but also employment taxes, union costs, etc. Additionally, athletes would also face significant costs. Most NIL receiving athletes are on tax-free scholarships that provide them with already generous benefits. If they are classified as employees, those benefits will be taxable, and athletes will face increasing limitations on NIL. A partner at Miller Nash law firm stated that comprehensive legislation would have to consider requirements for NIL deals and the classification of NCAA athletes as employees. As courts and policymakers navigate this evolving landscape, comprehensive legislation must balance athletes’ rights with broader implications not only regarding athletes, but collegiate sports itself.