United States: Title IX Implications Of The O'Bannon Decision

Philip Catanzano is Senior Counsel and David Santeusanio is a Partner in the Boston office.

HIGHLIGHTS:

  • The recent O'Bannon v. NCAA decision affirmed that the NCAA must allow colleges and universities to award scholarships up to the full cost of attendance for Division I men's basketball and football programs.
  • Allowing institutions to change the overall amount of athletic financial assistance to Division I men's basketball and football teams has the potential to create an imbalance that violates Title IX.
  • While the O'Bannon decision may be appealed further, in the immediate short term, colleges and universities seeking to alter student-athlete compensation practices will be challenged to ensure gender equity in athletics in accordance with Title IX.

The recent federal appellate decision in O'Bannon v. NCAA may have profound implications for colleges obligated to ensure gender equity in athletics under Title IX of the Education Amendments of 1972 (Title IX).

In the decision, the U.S. Court of Appeals for the Ninth Circuit affirmed that the NCAA's rule against paying Division I men's basketball and football student-athletes violated federal antitrust laws. The Ninth Circuit concluded that the NCAA must allow colleges to award scholarships up to the full cost of attendance for men's basketball and football programs – a change that the NCAA and the Power Five Conferences (ACC, Big 12, Big Ten, Pac-12 and SEC) put into effect voluntarily in January 2015. However, the Ninth Circuit struck down the district court's remedy of establishing a system that would pay certain student-athletes with deferred compensation of up to $5,000 per year. The NCAA and member institutions had argued that the deferred compensation system was fundamentally inconsistent with the principles of amateurism and the student-athlete model.

The Title IX impact of O'Bannon is more limited than it could have been in light of the court striking down the deferred compensation system. But, offering scholarships up to the full cost of attendance for men's basketball and football players presents its own set of Title IX challenges, which we outline below.

The Ninth Circuit's O'Bannon Decision

The O'Bannon case started in 2009. Class representative Edward O'Bannon, a former standout UCLA basketball player, asserted that it was an antitrust violation for the NCAA to prohibit Division I men's basketball players from being paid in exchange for the use of their names, images and likenesses (NIL). Sam Keller, a former Division I quarterback, filed a related action, and the cases were consolidated in a single class action.

The trial court held in August 2014 that the NCAA rules against paying student-athletes violated federal antitrust law and ordered a two-part remedy. First, the NCAA must allow colleges to award scholarships for Division I men's basketball and football programs up to the full cost of attendance. (The full cost of attendance includes tuition, room and board, transportation, books, supplies and other miscellaneous costs, and it is generally in the range of a few thousand dollars more per year than a traditional "grant-in-aid" scholarship.) Second, the NCAA must permit colleges to establish a deferred compensation system that would compensate certain Division I men's basketball and football players up to $5,000 per year in exchange for NIL rights, payable when the student-athletes left school or when their eligibility expired.

On appeal, the Ninth Circuit affirmed the district court's finding that the NCAA's prohibition on paying student-athletes unlawfully restrained trade in the competitive market of college athlete recruiting. As part of its antitrust analysis, the Ninth Circuit concluded that there were two procompetitive effects of the NCAA's rules: integrating academics with athletics and increasing the popularity of NCAA events by promoting amateurism. The Ninth Circuit went on to conclude that these procompetitive effects could be achieved by the less restrictive means of allowing NCAA schools to offer aid covering full cost of attendance. The Ninth Circuit vacated the district court's additional remedy of a deferred compensation system on the grounds that such payments would be inconsistent with the principle of amateurism.

While the O'Bannon decision may be appealed further, in the immediate short term, colleges and universities seeking to implement the O'Bannon decision on their campuses will be challenged to develop student-athlete compensation practices and policies that ensure gender equity in athletics in accordance with Title IX.

Gender Equity and Title IX

Title IX prohibits sex discrimination and requires gender equity in federally funded educational institutions, including athletic programs. The U.S. Department of Education's regulations set forth the areas of an athletic program for which there must be gender equity. These components – referred to colloquially as the "Laundry List" – are as follows:

  1. effective accommodation of interests and abilities
  2. the provision of athletic financial assistance
  3. the provision of equipment and supplies
  4. scheduling of games and practice time
  5. travel and per diem allowance
  6. opportunity to receive coaching and academic tutoring
  7. assignment and compensation of coaches and tutors
  8. recruitment
  9. provision of locker rooms, practice and competitive facilities
  10. provision of medical and training facilities and services
  11. provision of housing and dining facilities and services
  12. publicity
  13. support services

The U.S. Department of Education's Office for Civil Rights (OCR) enforces Title IX, and the U.S. Department of Justice also has been involved in certain Title IX cases. Many states also have gender equity laws that address these issues. Title IX also provides a private right of action to individuals, which has allowed student-athletes, coaches and others affiliated with collegiate athletics to bring federal claims based on gender equity.

The Ninth Circuit's decision most clearly implicates the equitable provision of athletic financial assistance, as additional scholarship aid – including additional aid to cover the cost of attendance – is a form of athletic financial assistance that must be provided equitably by gender. Consequently, by requiring the NCAA to allow institutions to decide whether to change the overall amount of athletic financial assistance available in its athletic program, there exists the potential to create an imbalance that violates Title IX.

Before heading down the path opened both by the Ninth Circuit's decision in O'Bannon and the NCAA's recent changes, institutions should ask the following questions:

  • Who is receiving the new athletic financial assistance, and is the athletic program still within the NCAA rules in terms of the number of scholarships allowed by team?
  • How does the new scholarship money provided via cost of attendance enhancements impact the institution's overall provision of athletic financial assistance in real dollars across the athletic program?
  • Is the provision of athletic financial assistance substantially proportional to the gender breakdown of the athletic program to keep it in compliance with Title IX?

Practical Title IX Challenges

Institutions well-versed in athletic financial assistance have long lamented the challenges of following the NCAA rules while also seeking to comply with Title IX. This is largely because while the NCAA provides scholarship limitations in the individual sports that it governs, Title IX simply requires that the overall amount of athletic financial assistance that an institution is providing to its athletes across the athletic program is substantially proportionate by gender.

In other words, while the NCAA limits the amount and number of scholarships in different contexts, it also gives institutions discretion in the way they provide scholarships for each of their teams. Many institutions take advantage of that discretion in different ways. For example, many institutions provide the maximum scholarships for their revenue generating sports, typically men's basketball and football, but provide scholarships in a more varied way for non-revenue generating sports. From an institutional or economic standpoint, this approach may make good fiscal sense. However, Title IX does not distinguish between revenue-generating and non-revenue-generating sports, nor does it matter to federal regulators that the revenue generating sports often subsidize the non-revenue generating sports. Title IX requires "substantial proportionality" with regard to the provision of athletic financial assistance across the athletic program, regardless of whether the male athlete plays for a team that garners millions of dollars in revenue or the female athlete plays on a team that is wholly subsidized by an institution.

What does this mean in practice? An athletic program could now decide that it will provide the NCAA maximum 85 scholarships to its football team and the NCAA maximum 13 scholarships to its men's basketball team. Moreover, it could decide to provide the maximum 15 scholarships to its women's basketball team. It could then decide to increase the value of these scholarships up to the cost of attendance for these 113 scholarships, and let's imagine that cost of attendance for each student-athlete is $50,000. This means that the institution is providing $5,650,000 in scholarships to just those three teams, but the bulk of that money ($4,900,000) is going to men's teams, which – viewed in a vacuum – would certainly put the institution out of compliance with Title IX with regard to athletic financial assistance.

So, what is an institution to do? The typical institutional answer is to build up the scholarships for the women's programs. However, if the institution cannot or will not provide scholarships up to the cost of attendance for those women's programs, then the multiplier might be smaller, say $45,000 per student. Similarly, because NCAA rules cap scholarships for all sports, both men's and women's, the institution cannot simply opt to provide 50 scholarships to the women's rowing team to counterbalance the football team, because the NCAA caps rowing scholarships at 20. This tension between the NCAA rules and Title IX results in an exacting push and pull across the athletic program that requires institutions to consider carefully which sports it offers for women and how scholarships are offered across all sports.

While achieving Title IX compliance was already a challenge before O'Bannon, the Ninth Circuit's decision and recent NCAA rule changes give institutions the ability to increase the total value of scholarships up to the cost of attendance. This then magnifies the challenge reaching compliance with Title IX and potentially provides an advantage to the wealthy institutions that can compete in what many athletic directors have referred to as a college athletics "arms race."

The O'Bannon decision is only the latest legal development affecting collegiate athletics and Title IX. In August 2015, the National Labor Relations Board ruled that scholarship football players at Northwestern cannot unionize. (See Holland & Knight's alert, " NLRB Decision on Student-Athlete Unionization a Win for Colleges, But Title IX Still in Play," Aug. 26, 2015.)

Meanwhile, for several years, the NCAA, conferences and individual colleges have implemented changes designed to address issues of scholarships, safety and the unique role of the student-athlete. (See Holland & Knight's alert, " Boston Ordinances Proposed to Address Student-Athlete Safety and Scholarships," Oct. 15, 2014.) For colleges and universities adjusting to these changes, the ongoing challenge is to effectively manage these reforms while competing on the field and complying with Title IX.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.