The debate over whether student-athletes should be considered employees has persisted for decades but has recently gained renewed traction—especially during high-profile events like March Madness. The conversation started back in 1950 when Ernest E. Nemeth, a football player at the University of Denver, filed for workers’ compensation after sustaining an injury during spring football practice. Judge Francis Knauss ruled in favor of Nemeth, recognizing him as an employee of the university. This case was pivotal in establishing that student-athletes could be considered employees, making them eligible for workers’ compensation benefits if injured while performing athletic duties. While it has been 75 years since the Nemeth court case, Name, Image, Likeness (NIL) has brought this issue back to center stage.
The Evolution of Name, Image, and Likeness (NIL)
Name, Image, and Likeness (NIL) refers to the rights of student-athletes to earn money from their personal brand. This can include income from endorsements, sponsorships, social media activities, and other business ventures that utilize their name, image, or likeness. During her college career, Caitlin Clark, a basketball player for the WNBA, capitalized on NIL deals with Nike and Gatorade, along with nine other known partnerships, amassing an estimated worth of $3.1 million. These deals enabled her to leverage her growing fame and on-court success, setting the stage for even greater opportunities as she transitioned to the professional level.
The NIL era truly began in 2021 when the NCAA updated its rules, allowing student-athletes to receive compensation for their NIL rights. This shift has significantly impacted college sports, creating new financial opportunities for athletes while also introducing new challenges and considerations for both the athletes and their institutions.
Historical Milestones in NIL Rights
Federal Interest:
Naturally, as NIL became a prominent topic, Congress took an interest. NIL has been a bipartisan issue, with some bills introduced by Democratic sponsors, others by Republican sponsors, and some by both. Legislation has been introduced dating back to 2019 and continues to be a theme of new legislation, including the following notable ones:
State Legislation on NIL Rights
As of 2024, 32 states have enacted legislation regarding Name, Image, and Likeness (NIL) rights for student-athletes. California led the way with the Fair Pay to Play Act (CA SB26), inspiring many other states to model their laws after this groundbreaking bill. Below are the states with active NIL laws:
While there is significant federal and state interest in this matter, the question of whether student-athletes are employees remains unanswered. In 1950, Judge Knauss ruled that students were employees, and just this past July, the Third Circuit Court of Appeals ruled that student-athletes are not barred from being considered employees under the Fair Labor Standards Act (FLSA). Despite these rulings, the NCAA has not definitively answered whether college student-athletes should be viewed as employees. Additionally, Congress is currently considering Rep. Bob Good's (R-VA) bill, the Protecting Student Athletes’ Economic Freedom Act of 2024 (H.R. 8534118th), which aims to ensure student-athletes are not classified as employees of their institutions, conferences, or associations solely based on their participation in intercollegiate athletics. At present, student-athletes must rely on state legislation to understand if they could be covered as employees. As this discussion continues, it will be interesting to see how NIL affects college athletics and, ultimately, college admission rates.