At its essence, this is a wage-fixing claim alleging that the coaches’ wages were fixed at zero. Such claims have become increasingly popular in parallel with the government’s focus on the issue.
On November 29, 2022, a group of volunteer college baseball coaches filed a proposed class action against the NCAA for alleged antitrust violations in the Eastern District of California. The plaintiffs in the case, captioned Smart, et al., v. NCAA, claim that by limiting the number of paid baseball coaches to three, with one volunteer coach allowed, the NCAA member schools illegally agreed to set the volunteer coaches’ salaries to zero. This practice is done pursuant to an NCAA rule.
Smart et al. v. NCAA is in line with the recent focus on labor market issues by the antitrust plaintiffs’ bar as well as by government enforcers. The complaint alleges that a volunteer coach “performs significant valuable work” and that he or she “would be paid for that work in a competitive market.” At its essence, this is a wage-fixing claim alleging that the coaches’ wages were fixed at zero. Such claims have become increasingly popular in parallel with the government’s focus on the issue.
It seems likely that NCAA v. Alston opened the door to Smart and could potentially lead to other similar antitrust litigation based on NCAA wage and labor restrictions. Alston, a unanimous decision by the United States Supreme Court last year, established that the NCAA is subject to antitrust scrutiny under the standard “rule-of reason” analysis that assesses the actual competitive impact of a particular practice rather than a standard more deferential to the NCAA’s practices. The NCAA had argued that it was entitled to a deferential, “quick look” analysis that assumed the pro-competitive rationale behind the NCAA’s restrictions outweighed any potential anti-competitive harm. Alston thus opened the door for plaintiffs to get past dispositive motions and established that the NCAA has monopsony power in these types of markets, which can form the basis for antitrust claims.
As alleged in the Smart complaint, head college baseball coaches can make over $1 million per year, and many head and assistant coaches in other sports like college football and college basketball make much more that. Many college sports also face restrictions on the number and type of paid coaches. It will be interesting to see whether there will be additional antitrust challenges to labor and wage restrictions regarding college coaches and staff. Likewise, organizations and companies considering wage and labor restrictions should consult with experienced antirust counsel to help them navigate this rapidly changing landscape.
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