Legal Complaint Around Student Athlete Compensation Takes ‘Aggressive’ Next Step

National College Players Association's civil rights complaint against NCAA DI colleges referred to the Equal Employment Opportunity Commission.

September 15, 2022

A new government entity is entering the growing movement to have athletes deemed as employees.

The U.S. Equal Employment Opportunity Commission (EEOC) could soon begin what one legal expert describes as an “aggressive investigation” into whether unpaid college athletes are being discriminated against because they are not fairly compensated. The EEOC was recently referred to an employment and civil rights complaint filed by the National College Players Association (NCPA) to the Department of Education in March.

The complaint asserts that all 350 NCAA Division I schools are violating Black students’ civil rights by colluding to cap compensation. The NCAA limits what schools can offer athletes in terms of scholarship money and largely prohibits any direct pay to players.

The athlete-employment debate has gained momentum over the past several years as revenue growth within the college sports industry continues to expand in varying ways, mostly because of men’s basketball and football. For instance, in the most recent revenue windfalls, the Big Ten struck a TV deal to earn $1.1 billion annually, and leaders just approved an expansion to the College Football Playoff that could fetch $2 billion a year.

“It’s only a matter of time before college athletes are considered employees. That’s certainly one takeaway from this decision,” says Ramogi Huma, executive director of the NCPA. “But we do believe that each department should be doing their part in terms of enforcing existing laws relative to college athletes rights and college students, including the Department of Education.”

In a letter sent to NCAA schools last week, Anamaria Loya, the Department of Education Office of Civil Rights chief attorney, said the complaint did not fall under the department’s jurisdiction and was referred to the EEOC’s San Francisco district office. Sports Illustrated obtained a copy of the letter through an open records request.

Michael LeRoy, an Illinois law professor who has published extensive work on labor policy, says the referral move means the complaint is being “taken really seriously” and is a “big deal” for some who have pushed for college athletes to be considered employees.

“It will trigger an aggressive investigation,” LeRoy predicts. “I’d anticipate the EEOC will file a complaint casting this as part of employment discrimination, and schools will fall back on their 116-year-old argument that this is about amateur athletics. It will be one more thorn in the side of NCAA athletic programs.”

The EEOC receives up to 100,000 employment complaints a year and prosecutes about 500 of those, says LeRoy. The procedure starts with an investigation, which will invariably lead to an EEOC request for information from schools and athletes.

“It’s somewhat significant that [the complaint] is not completely dead and that there is another government agency looking into it,” says Mit Winter, a sports attorney based in Kansas City who has handled NCAA-related cases in the past. “The schools will get a chance to show they are not discriminating against the athletes. EEOC could just accept that reasoning and decide not to pursue charges further.”

The NCPA’s complaint, as reported by SI in March, is part of an athletes’ rights movement that has generated sweeping changes to archaic NCAA policies governing compensation and transfer policies. It follows the NCPA’s move in February to file unfair labor practice charges with the National Labor Relations Board (NLRB) against the NCAA office, the Pac-12 Conference and California schools USC and UCLA. The goal is to affirm employee status for D-I basketball players and FBS football players. An NLRB hearing is expected as soon as this fall.

The EEOC complaint is seeking to eliminate the cap on compensation, potentially opening the door for athletes to receive additional pay from their schools. In the complaint, the NCPA argues that because a high percentage of Black students are also college athletes, the NCAA-wide compensation limit causes a “disparate impact” on Black college students.

The letter notes that the EEOC enforces Title VII of the Civil Rights Act of 1964, which prohibits employers of 15 or more persons from discriminating against its employees and applicants for employment on the basis of race, color, origin, gender identity, sex or religion.

“This is another way for the Biden administration to say that they aren’t letting go of the employment-in-college-athletics issue,” says LeRoy. “They’ll investigate it. Given the fact it is a Biden board, they are probably going to request information from schools about the disparity.”

Many within college sports believe employment status is coming at some point for college athletes. The EEOC represents one of four possible routes for that to happen. The NLRB is another possibility. The Board’s general counsel, appointed by Biden, has expressed an openness to rule college athletes as employees. In Pennsylvania, a court case, Johnson vs. NCAA, is working its way through the system that would make athletes employees. The fourth route to athlete employment status is Congress. Several bills could lay a legal path for schools to provide athletes collective bargaining rights and even revenue sharing provisions.

Deeming college athletes as employees would have wide-ranging impacts on the athletes and their universities. Athletes would be introduced to federal taxation and may be at risk of termination by their new employer, the school. Schools could lose their Section 501(3)c designation, which impacts taxation on bond financing and charitable gifts. Experts say student fees and public support might disappear, as well.

It is a complex issue. Like a freight train, says one athletic director, it is bearing down on college sports, grouped with other changes that are quickly altering the industry’s landscape—some say for the better, others say for the worse.

The NCPA’s nine-page complaint outlines the millions of dollars basketball and football players are missing out on because of what it calls the “unjust compensation limits.” The complaint gives estimates of the percent of compensation of total revenue that each major sport’s athlete receives—29.9% for women’s basketball, $8.9% for men’s basketball and 8.1% for football. Women’s basketball players are each being denied $24,000 a year; men’s players $164,000; and football players $185,000, the complaint says.

“College athletes throughout predominantly white sports receive fair market compensation, but athletes in the only predominantly Black sports [FBS football and men’s and women’s basketball] do not,” Huma told SI in the spring. “All college athletes should have the opportunity to receive fair market pay. This can happen without cutting any sports. Colleges would just have to spend a bit less on coaches’ salaries and luxury facilities.”