Colleges and universities face the threat of gender discrimination lawsuits if they share revenue differently between male and female student athletes and fail to justify the disparities.
Under a pending NCAA antitrust settlement with former Division I players, colleges have agreed to pay their athletes at least 22% of media revenue each year. While colleges may be inclined to share more funds with the programs that generate the most revenue, attorneys and academics caution that doing so can open those schools up to litigation under workplace civil rights laws and Title IX of of the 1972 Education Amendments.
“They’re going to feel an enormous pull to spend their money on football because that’s where they make their money,” said Michael LeRoy, a University of Illinois College of Law professor who researches college athletes. “If schools give in to that temptation, they will be defendants in Title IX lawsuits. It’s a virtual certainty.”
Major employment anti-discrimination laws such as Title VII of the 1964 Civil Rights Act and the Equal Pay Act could come into play if student athletes are deemed employees of their schools—a contentious labor law issue currently being debated in courts, administrative tribunals, and on the Hill.
Schools should start thinking about obligations for equitable pay now, in anticipation of athletes winning employment status, said Shannon Liss-Riordan, a worker-side class action attorney with Lichten & Liss-Riordan PC.
Employment Fight
To settle three antitrust lawsuits over the treatment of student athletes, the NCAA and Power Five conferences agreed to share more than $20 million in media revenue per college every year with athletes going forward.
The framework, which still must be approved by a court, also includes $2.75 billion in damages to college athletes over a 10-year period, meant to stave off future antitrust litigation.
It doesn’t go as far as to deem athletes employees of their institutions, but the implementation of revenue sharing may increase the chance of the athletes gaining employment status. Colleges have argued to National Labor Relations Board officials, for example, that athletes aren’t employees in part because they don’t receive wages.
Payment of wages is one consideration that appears in various legal tests used to determine if someone is an employee. For Title VII and the EPA, courts also consider how much supervision and control the employer has over the worker, who is responsible for costs such as equipment, and the length of the relationship, among other factors.
This approach is slightly different from analyses used for federal labor and wage-hour laws. Those issues are currently at play as the NLRB and its judges consider employment status cases for men’s basketball players at Dartmouth College, and football and basketball players at the University of Southern California. Meanwhile, a federal appeals court in Philadelphia is weighing minimum wage rights for student athletes.
Workplace laws and precedents weren’t set up to examine the student athlete situation, said Gerald Maatman, an employment attorney at Duane Morris LLP.
“You have a bunch of guide posts that are going to be applied to a novel situation,” he said.
Joseph Schmitt, an employer-side discrimination attorney with Nilan Johnson Lewis, said it may be easier for athletes to obtain employment status through the NLRB.
“The NLRB is a body that changes its interpretation of the law with each different administration,” he said. “There’s a back-and-forth in labor law that doesn’t exist in employment law when it comes to Title VII.”
Maatman added that an employment determination by the NLRB wouldn’t lead courts to automatically consider athletes as employees in Title VII cases, but it would likely be considered “highly probative.”
Equal Pay for Equal Work
Title VII broadly covers intentional and unintentional sex discrimination in payment and working conditions.
Considering that proving Title VII intentional bias claims can be difficult, Schmitt said athletes would likely try to sue under the EPA, which only requires a showing of “equal pay for equal work” without an intent requirement.
But the EPA also mandates that jobs between men and women must be substantially equal. To prove that, the positions must be close in the skill and effort required, level of responsibility, and general duties, according to guidance from the Equal Employment Opportunity Commission. Title VII, meanwhile, requires that pay bias comparisons must be made between similarly situated employees.
Maatman said universities could defend against these claims by arguing that men’s and women’s sports are so different that they don’t reach the bar of being substantially equal. Colleges could also argue that men’s programs generate more revenue and therefore should be better compensated.
“A football team at a Division I university that plays in a stadium where 100,000 people come and pay tickets, they’ve got TV revenues and the like—there will be an argument that the value of the product or the work is different and justifies a higher pay,” Maatman said.
Paying employees differently, alone, also doesn’t necessarily run afoul of federal law. Employers can consider factors such as performance, tenure at the company, and prior experience, according to Schmitt.
He said colleges could look to the 2019 lawsuit by women soccer players against the US Soccer Federation to get an indication of how pay equity suits might play out. The women claimed that the federation had violated both Title VII and the EPA by setting up different pay structures for the men’s and women’s teams and gave the men better facilities, despite the women’s team performing better in international competitions.
A federal district judge threw out the pay disparity claims in 2020, saying the differences were down to terms negotiated in the teams’ collective bargaining agreements. The parties ultimately settled before an appeals court could rule on the case, but Schmitt said these issues could resurface in litigation between schools and college athletes.
Proportional, Not Same
In the absence of employment status, athletes could pursue disparate pay claims through Title IX, which prohibits sex discrimination at federally funded schools and colleges.
The law’s language may be broad enough to cover a revenue sharing model like the one proposed in the settlement, said Barbara Osborne, an adjunct professor of law at the University of North Carolina and an independent Title IX consultant.
“Ultimately, what Title IX requires is that male and female athletes have equitable experiences,” Osborne said via email. “If a football player who is on a full scholarship is being paid a share of broadcast revenues, that is a really different experience than what the female athlete has.”
The US Department of Education says when the law is applied to athletic scholarships, the dollar amount of that money must be proportional rather than exactly equal. If 45% of a college’s players are women, then they should receive about 45% of the available financial assistance, according to 2023 guidance from the department.
Obligations under the statute’s general provisions about treatment and benefits are even less precise, said Joshua Hammack, who represents college athletes in Title IX cases for Bailey Glasser LLP.
“At the bare minimum it would require an equitable method of distribution between men and women,” he said. “It couldn’t be for example, that we take all of the money, all of the revenue, that comes into the sports program and give it to football players.”
The final settlement may not spell out exactly how colleges distribute revenue between athletes so it’ll be up to the colleges to ensure compliance with education regulations, Osborne said.
“Colleges and universities exist not necessarily in the free market, they exist in a highly regulated environment that includes statutes like Title IX,” said Osborne, who was an expert Title IX witness for the NCAA and colleges in one of the antitrust cases. “The reason Title IX exists is because of huge inequities based on sex related to access to education.”
According to Maatman, Title IX cases tend to cite Title VII case law for analyzing discrimination claims. But he said judges are going to have to “struggle and tussle” over the questions raised by an athlete’s claims under either law.
“These are going to be push the legal envelope cases,” he said. “You’re talking about a new frontier here.”
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