The Department of Justice recently joined a multi-state lawsuit and challenged the NCAA’s transfer eligibility rule as an illegal restraint on college athletes’ ability to sell their name, image and likeness and control their education.
The case against NCAA
Several states, including the Department of Justice, are challenging the NCAA’s rule that mandates college athletes who transfer more than once among Division I schools to sit out for one year before being eligible to participate in games.
Although the NCAA has already made an exception for first-time transfers in 2021, it continues to implement the rule for subsequent transfers, per the Ohio attorney general, it denies waivers inconsistently and often without any legitimate reasons.
It has come to light that the case is believed to be the first time that the DOJ has signed on to a state-led antitrust lawsuit. The House Innovation, Data and Commerce Subcommittee held a hearing titled, “NIL Playbook: Proposal to Protect Student Athletes’ Dealmaking Rights.”
The FAIR College Sports Act proposes to provide the NCAA with antitrust protection and establish that college athletes are not employees. In addition, it would prohibit universities from entering into NIL agreements with their athletes. This bill is one of several in Congress that seeks to regulate NIL on a federal level.
The proposed legislation received mixed reactions from the panel witnesses. UCLA quarterback Chase Griffin, who has signed more than 40 NIL deals in over a dozen states, was the most critical of the bill.
“This bill simply codifies an outdated NCAA business model that Supreme Court Justice (Brett) Kavanaugh wrote ‘would be flatly illegal in almost any other industry in America,’” Griffin told the committee. “If enacted, this bill would deprive another generation of college athletes of a proven and growing pathway to the American Dream.”
Total number of plaintiffs increase to 11
In addition to the DOJ, three more states and the District of Columbia signed onto the transfer rule lawsuit led by Ohio Attorney General Dave Yost and brought the total number of plaintiffs to 11. His office filed the lawsuit on Dec. 7 in the U.S. District Court for the Northern District of West Virginia.
“We are proud to stand with our state law enforcement partners on behalf of college athletes across the nation,” Jonathan Kanter, an assistant attorney general in the DOJ’s Antitrust Division, said.
“NCAA Division I institutions compete with each other not just on the playing field or in the arena, but to recruit and retain college athletes. College athletes should be able to freely choose the institutions that best meet their academic, personal and professional development needs without anticompetitive restrictions that limit their mobility by sacrificing a year of athletic competition.”
