Navigating the NCAA Employment Market: A Comprehensive Overview
The NCAA employment market is undergoing a significant transformation, driven by legal challenges, policy changes, and evolving perceptions of college athletes' rights and economic value. This article provides a comprehensive overview of the current landscape, examining key legal cases, emerging compensation models, and the ongoing debate surrounding the employment status of college athletes.
The Evolving Landscape of College Athletics
College athletic programs are integral to many college campuses, generating revenue from ticket sales, merchandise, and licensing agreements. Yet, the question remains: should the athletes themselves receive a portion of these earnings? There's a long-standing tradition of unpaid amateur athletics in the United States, with some arguing that scholarships are fair compensation for athletes' time and talent. However, the NCAA's growth into a billion-dollar enterprise raises questions about the legal status of college athletes - the workers who make this financial success possible. In recent decades, Division I college athletes have turned to Congress, the NLRB, and the judiciary to argue for their recognition as employees. For the athletes, employee status would mean minimum wage, overtime pay, and worker’s compensation, as well as the opportunity to bargain collectively.
Key Legal Battles and Their Impact
Several legal battles have significantly reshaped the NCAA employment market. Two prominent cases are Johnson v. NCAA and House v. NCAA.
Johnson v. NCAA: This ongoing federal case has the potential to redefine the employment status of college athletes. Led by former Villanova football player Ralph "Trey" Johnson and other athletes, the plaintiffs argue that student-athletes are employees within the meaning of the Fair Labor Standards Act (FLSA) and state minimum wage laws. They contend that Division I colleges and the NCAA act as joint employers, controlling athletes' schedules, supervision, and other workplace-like conditions.
The athletes point out that interscholastic athletics aren't part of any academic curriculum or course and aren't conducted for academic credit. Further, the life and career skills obtained through college sports are depicted as the kind found in work environments. The athletes additionally underscore how colleges provide the "tools and means," such as training, equipment and preventative care, needed for them to play NCAA sports.
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The NCAA, however, insists that the athletes should explain how college athletics interfered with their studies.
The case has seen a favorable trajectory for the athletes. District Judge John Padova denied the NCAA’s motion to dismiss, reasoning that the NCAA possesses substantial employer-like powers, including with respect to "hiring" in the form of recruitment rules and "firing" by rendering athletes ineligible. Padova also stressed the NCAA’s system for "Countable Athletically Related Activities" or "CARA," which limits time student athletes can devote to athletics, is consistent with an employment schedule and underscored how athletes’ time is controlled by athletic obligations and how schools, pursuant to NCAA rules, can restrict and discipline student athletes in more substantial ways than they can non-athlete students.
While the Third Circuit instructed Padova to apply a different test for employment, the athletes maintain they meet this test.
If Johnson advances, college officials, coaches, and staff would have to share time sheets, practice schedules, on-field activities notes, and other materials relevant to student employment, as FLSA discovery is more public-facing.
House v. NCAA: This antitrust litigation, along with Oliver v. National Collegiate Athletic Association lawsuits, challenged rules that restricted athletes from being compensated for the use of their NIL and prohibited conferences and schools from sharing revenue received from third-parties for commercial use of the athletes’ NIL.
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On June 6, 2025, Senior District Judge Claudia Wilken (N.D.C.A.) approved a settlement between the NCAA and a class of former and current college athletes to resolve three federal antitrust actions stemming from this reality. The $2.8 billion settlement accounts for backpay to former college athletes and constructs a revenue-sharing model to compensate current and future athletes. For at least the next ten years, each Division I school will receive $20.5 million to distribute to their teams.
The consolidated litigation addressed claims that NCAA rules restricting or prohibiting compensation for using athletes’ NIL, compensation for athletic services, and scholarship limits violated antitrust law.
The settlement stems from three lawsuits: the consolidated House v. National Collegiate Athletic Association and Oliver v. National Collegiate Athletic Association lawsuits, Carter v. National Collegiate Athletic Association, which alleged the NCAA’s rules prohibiting pay-for-play violated antitrust law; and Hubbard v.
Under the settlement agreement, the NCAA and the Power Five Conferences will contribute $2.576 billion to a settlement fund over the next ten years to pay former college athletes for the past use of their NIL going back to 2016. The agreement calls for a $1.976 billion settlement fund for NIL-related injuries, including NIL in broadcasts for certain college football and men’s and women’s basketball players. The settlement requires eliminating NCAA scholarship limits, potentially resulting in more than 115,000 additional scholarships annually. However, the NCAA will be permitted to adopt roster limits for Division I sports.
The plaintiffs brought claims under Section 1 of the Sherman Act for unreasonable restraint of trade, alleging that the NCAA’s rules constituted a horizontal agreement that caused anticompetitive effects in the labor market for college athletes.
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The settlement marks a significant shift in how college sports are governed and how athletes are compensated. The elimination of scholarship limits is particularly noteworthy.
The settlement agreement comes after years of upheaval in college sports amid a barrage of antitrust lawsuits challenging the NCAA’s “amateurism” rules, culminating in the 2021 Supreme Court of the United States ruling in Alston v. National Collegiate Athletic Association, in which the Court held that regulations that limited education-related pay and benefits are unlawful under federal antitrust law. This latest litigation challenged rules restricting athletes from being paid for using their NIL. The NCAA has already relaxed such rules and has reached a separate settlement in litigation over rules restricting schools from using NIL compensation as a recruiting tool. Under the new settlement, much of that money could be replaced with direct revenue sharing from the schools themselves.
Still, the settlement will have profound implications for labor markets in college sports. By allowing NCAA college athletes to receive compensation for their NIL and eliminating scholarship limits, the settlement effectively recognizes college athletes’ economic contributions to the college sports industry. While approving the settlement, the court specifically noted it does not address other labor rights of NCAA college athletes.
The settlement may prompt federal lawmakers to consider new legislation that addresses the employment status of NCAA college athletes and provides the NCAA with clearer guidelines on NIL compensation. Congress to pass legislation that would prevent college athletes from being deemed to be employees of schools and to provide the NCAA with an antitrust exemption or immunity to allow it to enforce rules related to transfers and other potential compensation guardrails.
The settlement is a landmark decision that will have lasting effects on antitrust and labor markets in college sports. Still, further legal questions remain, including regarding the influence of boosters, the lawfulness of certain transfer restrictions, and whether college athletes could be considered employees.
The Rise of NIL and Revenue Sharing
Prior to 2021, the NCAA prohibited student-athletes from receiving compensation outside of tuition, fees, and room and board, in an effort to preserve amateurism in college sports. Then, in 2021, the NCAA began allowing student-athletes to benefit from their name, image, and likeness (“NIL”), which set into motion a billion-dollar market. Now, as of June 2025, the NCAA is allowing universities to share its athletic revenues with college athletes.
Name, Image, and Likeness (NIL): Starting in July 2021, the NCAA allowed all Division I-III student-athletes to be compensated for the use of their NIL. This policy change reversed the previous prohibition on college athletes earning "benefits linked to their participation in a sport." Now, college athletes can accept endorsement deals with both national and local businesses.
Revenue Sharing: Universities can now directly provide compensation to athletes, worth up to twenty-two percent of Power Five schools’ average athletic revenues each year.
Are College Athletes Employees? Examining the Arguments
Now that universities can directly compensate college athletes for their athletic services, athletes may seek to solidify themselves as employees of their universities to secure benefits and rights. If a person does not fall under one of these exemptions, it is helpful to apply existing tests for determining employment status: 1) the common law definition of a servant, which analyzes whether a person “perform[s] services in the affairs of another and who…is subject to the other’s control” or 2) whether the employer has an economic relationship with the employee.
Arguments against Employee Status: A prevalent argument against college athletes being recognized as employees is based on the outdated 2004 NLRB decision in Brown University. In that case, the NLRB found that graduate student assistants had a predominantly educational, rather than economic, relationship with the university; therefore, the NLRB decided graduate assistants were not employees within the meaning of the NLRA.
The "primarily student" argument is inapplicable to college athletes in 2025, especially after the decision reached in In Re: College Athlete NIL Litigation to allow universities to directly share millions of dollars in revenue with their athletes. Although college athletes must still fulfill education requirements under NCAA policies, their ability to earn substantial income and the ease at which they can transfer to increase their financial and athletic opportunities now makes them primarily employees as opposed to students.
Arguments for Employee Status: College athletes generate staggering amounts of revenue for their universities, demonstrating that athletes perform services in the interest of their universities. Additionally, the NLRB has already established that college athletes are subject to their universities’ control. It is undisputed that college athletes generate revenue, whether directly or indirectly, for their universities such that an economic relationship is established. Additionally, now that athletes benefit from the use of their Name, Image, and Likeness and universities can directly share revenue with athletes, the athletes’ earnings are evidence of the economic relationship with universities.
Unionization and Collective Bargaining: A New Frontier
Unless athletes obtain employee status and bargaining rights, the power is largely in the hands of the universities to determine how the revenue share is allocated within its athletic department. Collective bargaining may not solely result in salary negotiations. Athletes could negotiate for health care assurances for sports-related injuries and even post-eligibility medical care, as studies show that former Division I athletes report significant decreases in mental and physical health, and overall quality of life, after college. Athletes might also consider mental health support a focus of bargaining.
The NLRA would cover athletes at private universities, which ensures unionizing rights. However, it is more complicated for athletes at public universities to secure unionizing rights, as individuals employed by the state government are excluded from the NLRA and are governed on a state-by-state basis.
Monopsony Power and Antitrust Concerns
The National Collegiate Athletic Association (NCAA) was originally founded to set standards and safety practices for college athletics. Today the NCAA has more than 1,000 member colleges and universities organized into three divisions. Many of the standards and regulations the NCAA established have to do with how member schools can recruit and compensate athletes for participating in college athletics. As college athletics increased in popularity, they created more and more revenue for both the NCAA and the colleges and universities.
The Supreme Court found that because member schools compete against each other to recruit student athletes, the NCAA, through rules like limiting education-related benefits, used its monopsony power to “cap artificially the compensation offered to recruits.” The Court ruled that these caps violate antitrust law, which has opened the door to further debate and rule changes related to student athlete compensation.
Monopsonies are less common and certainly less visible than monopolies; but monopsony labor markets still have a large impact on the income and wages of laborers within those markets. With changes in policies around NIL and education-related compensation for student athletes, the landscape of college sports is changing.
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