On May 23, 2024, the NCAA and the Power 5 conferences announced a $2.8 billion settlement that was reached in several antitrust class action lawsuits concerning payment for college athletes. The settlement marked a watershed moment, effectively sounding the death knell of “amateurism,” the longstanding argument by the NCAA for why college athletes should not be paid in Division I college sports.

The settlement, pending final approval of the federal judge presiding over the case, will result in millions of dollars in back pay to former athletes, with millions more set aside for direct payment to athletes from their schools for their performance. It is expected that the direct payments from schools to athletes will begin in the 2025-2026 school year and the distribution of such payments would be at the discretion of the schools.

The question remains how this settlement will impact the employment status of these athletes. There is an overwhelming sense that the NCAA will use the momentum of this settlement to push for Congressional action to exempt it from antitrust legislation, and essentially create a carve-out for college athletes. The desired carve-out would maintain athletes’ ability to share in revenue and receive compensation but preclude universities from being the athletes’ employer. Congress, however, has been reluctant to interfere thus far.

In recent months, the National Labor Relations Board (NLRB) signaled that they are willing to enable college athletes to unionize by allowing the Dartmouth men’s basketball players to do so. Football and basketball players from the University of Southern California are currently seeking the right to be classified as employees in an NLRB case against the university, the PAC-12 and the NCAA. With the NLRB’s General Counsel already taking a proactive stance on college athletes as employees, the pressure is on the NCAA to have Congress provide a more favorable status when it comes to classifying students. Without such intervention, student athletes becoming employees of their respective schools may soon be the reality universities must face.

As the details and logistics of the settlement are finalized, the impact of the settlement on extent to which college athletes will have rights as employees remains to be determined. Also lurking in the background are potential issues under Title IX and the ultimate distribution of any system of pay that follows on the settlement.