The NIH IDC – Where Are We Now
On February 7, the National Institutes of Health (“NIH”) issued a Notice (NOT-OD-25-068) entitled “Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates” (the “Notice”), though which NIH announced the adoption of a uniform indirect cost rate (“IDC Rate”) of 15% applicable to all new grants, and to existing grants awarded to Institutions of Higher Education (“IHEs”) – encompassing the vast majority of postsecondary educational institutions in the United States – as of the date the Notice was issued (February 7, 2025). The Notice also indicates the policy will apply for “all current grants for go forward expenses from February 10, 2025 as well as for all new grants issued.”
The Notice, as written and supported by underlying regulations, appears to apply the 15% IDC Rate to existing awards only for IHE recipients (see the Notice’s acknowledgment that “NIH may deviate from the negotiated rate both for future grant awards and, in the case of grants to institutions of higher education (“IHEs”), for existing grant awards. See 45 CFR Appendix III to Part 75, § C.7.a; see 45 C.F.R. 75.414(c)(1).” (emphasis added)). However, there is some ambiguity in the wording and existing non-IHE awardees should be prepared for a possibly broader read by the NIH. The IDC Rate covers “facilities” and “administration” costs of the grantee institution. As a general matter, an institution’s IDC Rate is pre-negotiated and although the NIH cited 27-28% as the average negotiated IDC Rate, it has been reported that many institutions negotiate upwards of 50-60%, with some even as high as 75%.
The NIH justified its action under 45 C.F.R. § 75.414(c)(1), pursuant to which “[a]n HHS awarding agency may use a rate different from the negotiated rate for a class of Federal awards or a single Federal award only when required by Federal statute or regulation, or when approved by a Federal awarding agency head or delegate based on documented justification as described in paragraph (c)(3) of this section.” Paragraph (c)(3) goes on to require that “[t]he HHS awarding agency must implement, and make publicly available, the policies, procedures and general decision-making criteria that their programs will follow to seek and justify deviations from negotiated rates.” Presumably the NIH is taking the position that this Notice serves as the publication of the criteria it will follow (and is following in real time through the Notice) to seek and justify this likely downward deviation from already negotiated rates held by grantee institutions for existing awards.
The NIH Notice was challenged in two different motions for temporary restraining orders (“TRO”): one filed by a collection of State Attorneys General (see Commonwealth of Massachusetts vs. National Institutes of Health, Case # 1:25-cv-10338) and the other by the Association of American Medical Colleges and other similar associations (Case # 1:25-cv-10340). The motions are based on several similar arguments: (1) the indirect rate change is arbitrary and capricious, (2) the rate change violates Section 224 of the Further Consolidated Appropriations Act, 2024, (3) NIH failed to comply with its own regulations for indirect cost rates, (4) NIH has no authority to make retroactive changes to indirect cost rates, and (5) notice and comment procedures are required because this is a substantive change because it imposes a new obligation that did not exist previously.
On February 10, the District Court for the District of Massachusetts granted the State Attorneys General’s request and entered a TRO blocking the implementation, application, and enforcement of the Notice within the Plaintiff States (i.e., within Massachusetts, Illinois, Michigan, Arizona, California, Connecticut, Colorado, Delaware, Hawaii, Maine, Maryland, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Washington and Wisconsin) until further order is issued by the Court. A hearing date has been set for February 21, 2025 at 10 a.m.
In a separate ongoing litigation, State of New York v. Trump (C.A. No. 25-cv-39-JJM-PAS), the District Court of Rhode Island issued a TRO on January 31, 2025, prohibiting the Defendants from freezing federal funding based on the Trump administration’s Executive Orders or the OMB Memorandum M-24-13 dated January 27, 2025 (“Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs”). On February 10, 2025, the same day as the motions to block the NIH’s uniform IDC, the judge in that matter, Chief Judge John J. McConnell, Jr. issued an Order to enforce the funding-freeze TRO in response to Plaintiff’s emergency motion, indicating that the Defendants must take certain steps to both restore funding and refrain from further violation of the TRO. Some media outlets have reported this Order as also blocking the NIH’s Notice related to IDCs. It is unclear at this time whether the NIH’s action in the Notice could be deemed to fall within the scope of the Executive Orders or the OMB Memo, and it does not appear this argument was made in the two motions for TROs brought against the NIH on February 10, 2025. That said, it is possible a cognizable claim could be made that the NIH’s actions constitute an attempt to cut off funding under another “name or title,” which was explicitly incorporated into the TRO issued by Judge McConnell (“Defendants shall also be restrained and prohibited from reissuing, adopting, implementing, or otherwise giving effect to the OMB Directive under any other name or title or through any other Defendants (or agency supervised, administered, or controlled by any Defendant), such as the continued implementation identified by the White House Press Secretary’s statement of January 29, 2025.”).
Given the NIH’s Notice and the various ongoing litigations, Institutions will also have to carefully evaluate their approach to submitting new grant applications and administering current awards.
How NCAA Changes to Transgender Policy Following President Trump’s Executive Order Impact Schools
Takeaways
President Trump signed executive order “Keeping Men out of Women’s Sports,” barring transgender women from competing in women’s sports and citing fairness, safety, and privacy concerns. Schools that do not comply with the new federal policy risk losing federal funding under Title IX enforcement.
In response, the NCAA immediately revised its transgender participation policy, restricting competition in women’s sports to athletes assigned female at birth.
Legal challenges are expected, as some states and advocacy groups argue the policy is discriminatory and violates previous Title IX interpretations.
Background
On Feb. 5, 2025, President Donald Trump signed executive order “Keeping Men Out of Women’s Sports,” which prohibits transgender women from participating in female athletic categories at federally funded educational institutions. The order also directed the State Department to demand changes within the International Olympic Committee. The Committee has left eligibility rules up to the global federations that govern different sports.
The Trump Administration has made a push to redefine sex-based legal protections under Title IX of the Education Amendments of 1972, emphasizing biological sex as the deciding factor for athletic eligibility. Previously, on Jan. 20, 2025, the Administration issued an executive order declaring the federal government would recognize only two sexes, male and female, for all legal and regulatory purposes.
The NCAA has over 530,000 student-athletes, fewer than 10 of whom are transgender, according to a statement the NCAA’s president, Charlie Baker had provided to a Senate panel in December. In January, Baker called for greater legal clarity on the issue from regulators.
Finding that clarity in the form of the new executive order, in response, the NCAA Board of Governors voted to amend its transgender participation policy the day after Trump’s executive order was issued.
The new policy states that eligibility for NCAA women’s sports is now strictly limited to athletes assigned female at birth. Transgender men (those assigned female at birth but who have begun a medical transition) may still participate in men’s sports without restriction. However, an athlete taking testosterone for gender transition may only practice with a women’s team and is prohibited from competing in official NCAA-sanctioned events. If a team allows an ineligible athlete to compete, the entire team will be disqualified from NCAA championships.
Legal and Institutional Challenges
The executive order immediately ignited controversy as several states and legal groups vowed to challenge the order.
Pushback is expected, particularly in states like California, Connecticut, Massachusetts, and New York, where laws expressly protect transgender rights. Schools in these states now face a dilemma: Whether to comply with federal regulations or uphold state laws that recognize gender identity protections for student-athletes. Schools in these states may risk severe financial consequences if they refuse to comply with the new federal mandate, potentially losing millions in federal education funding.
More than two dozen states already bar transgender athletes from participating in school sports, whether in K-12 schools or at the collegiate level. In January, the House passed a bill barring transgender women and girls from sports programs for female students nationwide (the bill is not likely to pass in the Senate).
What Comes Next?
Some key questions remain:
Will federal courts uphold or strike down the new Title IX interpretation?
How will schools in certain states navigate the conflict between the executive order and new NCAA policy and state laws?
NCAA Bars Transgender Athletes from Women’s Sports Aligning With President Trump’s Executive Order
On February 6, 2025, the National Collegiate Athletic Association (NCAA) announced its new policy, prohibiting athletes assigned male at birth from participating in women’s sports competitions, aligning the NCAA eligibility rules with President Donald Trump’s recent executive order (EO) barring transgender athletes from women’s sports. The new rules reverse a prior policy of allowing athletes to participate in accordance with their gender identity.
Quick Hits
The NCAA Board of Governors voted to adopt an updated transgender athlete participation policy that prohibits athletes assigned male at birth from competing in NCAA women’s competitions.
The new policy aligns with President Donald Trump’s executive order barring transgender athletes from competing in women’s sports.
The executive order takes the position that allowing transgender participation in women’s sports undermines the fairness and opportunities for women and girls and threatens federal funding for educational programs that do not comply.
The NCAA aims to establish clear national eligibility standards in response to the differing state laws and court decisions surrounding this issue.
Under the updated participation policy for transgender athletes, “[r]egardless of sex assigned at birth or gender identity, a student-athlete may participate (practice and competition) in NCAA men’s sports, assuming they meet all other NCAA eligibility requirements.”
For women’s sports, “[a] student-athlete assigned male at birth may not compete for an NCAA women’s team.” However, such student-athletes “may continue practicing with a women’s team and receive all other benefits applicable to student-athletes.” “A student-athlete assigned female at birth who has begun hormone therapy (e.g., testosterone) may not compete on a women’s team.” However, they, too, may continue practicing with a women’s team and receive all other applicable benefits.
“We strongly believe that clear, consistent, and uniform eligibility standards would best serve today’s student-athletes instead of a patchwork of conflicting state laws and court decisions. To that end, President Trump’s order provides a clear, national standard,” NCAA President Charlie Baker said in a statement.
The change comes a day after President Trump signed an EO titled “Keeping Men Out of Women’s Sports.” The EO states that allowing transgender athletes to compete in women’s sports “is demeaning, unfair, and dangerous to women and girls, and denies women and girls the equal opportunity to participate and excel in competitive sports.”
While not directly addressing the NCAA, the EO declared that it is “the policy of the United States to rescind all funds from educational programs that deprive women and girls of fair athletic opportunities, which results in the endangerment, humiliation, and silencing of women and girls and deprives them of privacy.”
The EO had significant implications for the NCAA schools, which rely on federal funding. After the EO, NCAA President Baker said that the Board of Governors would “take necessary steps to align NCAA policy” with the EO.
Under the NCAA’s prior policy, adopted by the Board of Governors in January 2022, transgender women athletes were allowed to compete in NCAA women’s sports after submitting documentation of “gender affirming treatment” by a medical professional and evidence that their testosterone levels are “within the allowable levels for the sport” in which they plan to compete.
In addition, NCAA schools are faced with shifting interpretations of Title IX of the Education Amendments of 1972, which requires that schools provide equal opportunity to students, regardless of sex, including in terms of sports participation and “athletic financial assistance.”
On January 9, 2025, a federal court in Kentucky vacated a Biden-era U.S. Department of Education rule on Title IX adopted in 2024, which expanded the definition of sex-based harassment to include sexual orientation and gender identity. The Department of Education has since confirmed that it will enforce Title IX under a 2020 rule issued during President Trump’s first term.
The recent actions align with President Trump’s inauguration day EO 14168, titled “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which directed federal agencies to “enforce laws governing sex-based rights, protections, opportunities, and accommodations to protect men and women as biologically distinct sexes.”
Next Steps
The new NCAA participation policy will have significant implications for transgender athletes currently competing or seeking to compete in NCAA sports, likely meaning that they will no longer be able to compete in NCAA women’s competitions. Baker’s statements further indicate the NCAA’s desire for national standards in an era that has seen major changes to college sports and eligibility rules pushed by antitrust litigation and an inconsistent patchwork of state laws and regulations, including changes to athlete transfers, the allowance of compensation for name, image, and likeness, and the potential adoption of revenue sharing.
What to Know About the War Being Waged Against DEI
Can you still have DEI (diversity, equity, and inclusion) programs? How about affirmative action plans? The Supreme Court’s June 2023 decision in Students for Fair Admissions v. Harvard garnered national attention in holding that Harvard’s admissions program, which used race as a factor in admissions, violated the Equal Protection Clause of the 14th Amendment. Since then, major private corporations have made headlines with their decisions to scale back certain DEI initiatives. Other private companies, such as Costco and Apple, remain unwavering in their commitment to DEI. While not without legal risk, companies that have found DEI initiatives to be helpful to their business and culture can continue with their programs.
State Attorneys General Weigh In
In a recent letter, 13 Democratic attorney generals (from California, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Rhode Island, and Vermont) urged one retail giant to reconsider its scale back of DEI programs. The AGs’ letter reminded the retail giant that the Fair Admissions decision is a narrow ruling and does not prohibit private corporations from implementing DEI initiatives. The letter went on to remind the company that DEI initiatives are not only encouraged and beneficial but are in some cases necessary to comply with certain states’ anti-discrimination laws.
The New Administration Weighs In
President Trump’s recent executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” has made the future of DEI even more perilous. The executive order rescinded Executive Order 11246, a 1965 order that imposed affirmative action requirements on federal contractors. Additionally, the federal government has placed DEI employees on paid leave and ordered the termination of DEI activities within federal agencies. The recent executive order goes on to demand that the attorney general submit “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.”
Avoiding Legal Risks in Continued DEI Efforts
If you want to continue DEI efforts, do so thoughtfully and recognize the risks. The recent executive orders emphasize the idea of restoring merit to employment decisions. Therefore, your DEI measures should ensure that programs continue to be merit-based and are designed to provide equal access to opportunities for all applicants and employees. The executive order does not define the specific DEI programs or activities it deems to be illegal, however policies such as quotas, hiring preferences, or hiring goals are likely more susceptible to claims of discrimination. You should review any of your existing company policies and initiatives to ensure they comply with state and federal anti-discrimination laws, as well as recent executive actions.
In the aftermath of the Fair Admissions decision, the EEOC stated “[i]t remains lawful for employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.” Due to recent executive actions, we may get additional guidance from the EEOC on the topic of DEI.
Before you make a decision to change an existing workplace DEI initiative or to implement a new initiative, you should consult with your legal counsel to ensure compliance with state and federal anti-discrimination laws. Be on the lookout for developments in this space, as the president’s recent executive actions will likely face legal challenges so the landscape could change.
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Federal Court Acknowledges Catch-22 Involving FERPA and the NRLA
While union organizing among students flourished under President Biden’s labor board, colleges and universities face unresolved issues, including compliance with other federal laws.[1] In Vanderbilt University v. National Labor Relations Board, Vanderbilt University (Vanderbilt) sought a preliminary injunction enjoining the application of certain National Labor Relations Board (NLRB or Board) regulations that Vanderbilt argued conflict with the Family Educational Rights and Privacy Act (FERPA). The District Court for the Middle District of Tennessee (District Court) granted the injunction, recognizing a conflict between the Board’s disclosure requirements and FERPA’s privacy protections.
FERPA and the NLRB Regulations
The friction between FERPA and NLRB regulations is not surprising. Our last update addressed the NLRB’s General Counsel (GC) memorandum from August 2024, which attempted to reconcile a higher education institution’s disclosure obligations under the National Labor Relations Act (NLRA) and FERPA. In its recent decision, the District Court noted an outright conflict between FERPA and NLRB regulations. Generally, FERPA forbids the disclosure of student information from educational records without written consent unless an exception applies, such as when a student is given timely notice of a subpoena and the opportunity to initiate protective action. Failing to comply with FERPA presents a significant risk—losing federal funding. However, failing to comply with NLRB regulations could result in NLRA violations or preclude an institution from using certain defenses or strategies in a union election proceeding. The District Court recognized that FERPA protects student privacy rights, namely unauthorized disclosures of certain educational records and personal identifying information contained therein, but NLRB regulations enable unions and the Board access to certain personal identifying information for collective bargaining purposes and union elections. The District Court summarized the issue as a “seemingly impossible Morton’s Fork: either comply with those [NLRB] regulations and lose federal funding for violating its students’ privacy; or not comply and face punishment during union election proceedings.”
Vanderbilt University v. National Labor Relations Board
Vanderbilt is a 501(c)(3) FERPA-covered private university that accepts federal funding. The Vanderbilt Graduate Workers Union United, International Union, UAW (Union) filed a representation petition with Region 10 of the NLRB to represent 2,200 graduate student employees. NLRB regulations allow employers, upon filing a petition, to submit a statement of position (SOP), but that SOP must include, among other things, “a list of the full names, work locations, shifts, and job classifications in the proposed unit.” If the SOP omits information, an employer is precluded from raising any issue, offering any evidence, cross-examining witnesses, or presenting any argument related to the omitted information at the hearing concerning the petition. Vanderbilt argued that it had competing obligations—provide student information per the Board regulations or protect against unapproved disclosure and use of student education records under FERPA. After the Regional Director issued a subpoena directing Vanderbilt to provide the NLRB-required information, the university provided affected students an opportunity to object under FERPA. FERPA allows institutions to release protected records with students’ consent or in response to a lawfully issued subpoena, so long as affected students are given timely notice and an opportunity to take protective action. Over 80 students objected to the subpoena. After another subpoena, Vanderbilt again notified affected students, but it received even more objections. Two graduate students filed a request to intervene directly with the Board proceeding and a motion to stay enforcement of the subpoena to provide time to present their objections. The Regional Director later denied Vanderbilt’s motion to postpone the hearing, the SOP, and its response to the subpoena and further denied the students’ request to intervene and the motion to stay. The two students filed an emergency appeal to the Board. At the same time, Vanderbilt sought emergency expedited relief from the Board to avoid disclosing students’ FERPA-protected information before their objections were adjudicated.
Ultimately, Vanderbilt complied with the subpoena, filing its SOP with redacted student information. At the hearing concerning the petition, the Union moved to preclude Vanderbilt from presenting evidence or arguments contesting the appropriateness of the proposed union or any individual’s eligibility because the SOP did not provide full names. Vanderbilt opposed the Union’s motion for preclusion, arguing the redacted information was FERPA-protected. Eventually, at the Regional Director’s instruction, the hearing officer precluded Vanderbilt from offering evidence or argument on the unit’s appropriateness because it did not provide the required information and precluded Vanderbilt from offering proof regarding the evidence it would have presented.
Vanderbilt requested the District Court issue a preliminary injunction enjoining the Board from enforcing three regulations that essentially present a catch-22 when considered alongside FERPA obligations. Namely, the regulations forced a FERPA violation by disclosing protected personally identifiable information, which would penalize Vanderbilt for FERPA compliance by precluding evidence or argument about the unit’s appropriateness.
The Court Finds A Preliminary Injunction Necessary
The Court ultimately found the regulations contrary to FERPA and thus “not in accordance with law” under the Administrative Procedures Act (APA).[2] The Court granted immediate injunctive relief based on the four factors considered for an injunction, detailed below.
1. Vanderbilt had a Strong Likelihood of Success on the Merits
The Court concluded Vanderbilt is likely to succeed on the merits of its claim that the Board is applying the regulations in a manner not in accordance with the law, particularly because the application directly conflicts with Vanderbilt’s FERPA obligations and penalizes it for compliance. The particular requirements of the NLRB regulations and FERPA illustrate Vanderbilt’s conflict.
The three NLRB regulations at issue provide that:
A statement of position must contain “a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit[;]”
If a party fails to “timely furnish the lists of employees,” the employer is “precluded from contesting the appropriateness of the proposed unit” and “from contesting the eligibility or inclusion of any individuals at the pre-election hearing, including by presenting evidence or argument, or by cross-examination of witnesses[;]”
Absent extraordinary circumstances, an employer must provide the Regional Director, within two business days after issuance of direction, “a list of the full names, work locations, shifts, job classifications, and contact information (including home addresses, available personal email addresses, and available home and personal cellular “cell” telephone numbers) of all eligible voters.”
At the same time, FERPA provides (absent exception to disclosure under particular circumstances) that:
[n]o funds shall be made available under any applicable program to any educational agency or institution which has a policy or practice of permitting the release of education records (or personally identifiable information contained therein other than directory information . . . ) of students without the written consent of their parents to any individual, agency, or organization[.]
The Court found Vanderbilt likely to succeed in showing FERPA protections apply to student information NLRB regulations require for disclosure and that the university would be forced to enact a “policy or practice” of disclosure during election proceedings. According to the Court, the information required by the regulations to avoid preclusion, including the voter list related to students and maintained by Vanderbilt, constitutes education records or personally identifiable information. The Court concluded the information, such as work locations, shifts, job classifications, and personal email addresses, did not constitute “directory information,” which FERPA permits an institution to disclose.
The Court held that the Board’s application of the regulations to Vanderbilt clearly conflicted with FERPA obligations. The Court noted that even if the Board adequately contested Vanderbilt’s claim under FERPA’s subpoena exception, the argument would likely fail because of the Board’s strict application, i.e., the Board did not give Vanderbilt a significant opportunity to allow students to seek protective action in response to the subpoena before mandating disclosure. The Court also noted that the Board failed to make a meaningful effort to agree on an accommodation to honor Vanderbilt’s concerns, as the GC recommended, or follow any other related guidance to facilitate compliance and consent procedures. The Court noted that Vanderbilt could not comply with FERPA and the regulations as currently written during the election proceeding and that “a valid statute always prevails over a conflicting regulation.” Therefore, the Court concluded Vanderbilt will likely succeed in its APA claim that the regulations are not in accordance with FERPA.
2. Vanderbilt Would Suffer Irreparable Injury
The District Court also found that Vanderbilt would suffer irreparable injury without an injunction. The Court noted Vanderbilt suffered harm from a previous preclusion order and would continue to suffer if forced to participate in election proceedings governed by regulations that required the university to choose between rights in NLRB proceedings and federal obligations. The Court emphasized the threat of Vanderbilt losing federal funding if forced to continue to comply with the election. Accordingly, given the past harm Vanderbilt experienced—which would continue to pervade—and the potential loss of funding, the Court found irreparable injury.
3. The Third and Fourth Factors Proved Neutral
As for the remaining factors—whether issuance would cause substantial harm to the opposing party or others and the public interest—the Court noted its neutrality. On the one hand, the Court acknowledged that Congress gave the NLRB significant power to regulate election proceedings and that an injunction could delay administrative proceedings, cause confusion regarding the proper application of the regulations, and deprive students of the ability to unionize quickly. However, the Court also noted Vanderbilt’s significant likelihood of success on the merits, which strongly indicated that a preliminary injunction would serve the public interest as “there is generally no public interest in the perpetuation of unlawful agency action.” The Court noted that granting relief would likely benefit over 100 students who objected to disclosing FERPA-protected information. While Congress enacted the NLRA and created the NLRB with specific objectives to not be infringed upon, the Court gave great weight to the fact that Congress similarly intended to protect the privacy rights of students under FERPA—students objected under the rights delegated by Congress. Those rights should not need to be set aside for agency expediency.
After balancing those factors and considering the irreparable harm, the Court found the circumstances warranted a preliminary injunction and narrowly tailored the scope by enjoining the Board from applying and enforcing the regulations to Vanderbilt in a way that violates the APA or FERPA. Shortly after the Court’s decision, the Union withdrew its petition.
What’s to Come
As the Courts and the Board navigate these challenges, the very legal foundation for students being able to unionize could face challenges under a Trump labor board. During President Trump’s prior term, the NLRB proposed but later withdrew regulations that would have excluded students at private universities from the NLRA’s definition of an employee. Will a Trump labor board reintroduce those proposed regulations? With the Senate failing to confirm Lauren McFerran to another term, Republican appointees will have a Board majority in early 2025. With precedent established by President Biden, Trump has already removed the General Counsel that President Biden appointed. In light of existing complex issues involving higher education, labor law, and other developments likely to come, colleges and universities should consult with competent legal counsel to stay abreast of these issues and prepare for any potential compliance obligations.
ENDNOTES
1. Aside from the FERPA compliance issues addressed in this article, higher education institutions may face additional issues with students being recognized as employees, including potential conflicts with federal immigration law and the Fair Labor Standards Act. The Third Circuit Court of Appeals addressed possible minimum wage requirements in Johnson v. NCAA, 2024 WL 3367646 (3d Cir. July 11, 2024), and the NLRB’s regional directors have addressed arguments that under federal immigration law, the characterization of a student as an employee has the potential to violate that student’s immigration status. For instance, international students must comply with federal immigration requirements, which can limit pursuit of full-time work in the United States and hours worked for certain visas. Educational institutions often limit international students’ work hours to comply with such requirements. However, with more and more students recognized as workers, these limits may be exceeded unintentionally if an international student is classified as an employee of their higher education institution, placing certain international students’ visa status at risk. Some regional directors have recognized this potential conflict when presented with election petitions, while others have given less weight to this issue—the facts of the particular case and what students are actually doing appear significant to this determination. See Trustees of Dartmouth College v. Service Employees International Union, Local 560, Case 01-RC-325633 (Feb. 5, 2024); Massachusetts Institute of Technology, Case 01-RC-304042 (March 13, 2023).
2. The Court did not address Vanderbilt’s arguments that the regulations are arbitrary and capricious because it found the regulations as applied were not in accordance with the law (i.e., FERPA).
U.S. Department of Education Confirms That It Will Enforce 2020 Title IX Rule
On January 31, 2025, the U.S. Department of Education’s Office for Civil Rights (OCR) issued a “Dear Colleague Letter” (DCL) announcing that it would enforce Title IX of the Education Amendments of 1972 under the provisions of the 2020 Title IX Rule, rather than the recently invalidated 2024 Title IX Final Rule.
The DCL and Executive Order 14168 (“Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”) have significant implications for schools, colleges, universities, and other recipients of federal financial assistance that are subject to Title IX. These institutions will likely need to review and revise their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and the executive order and to prepare for potential enforcement action by OCR or the U.S. Department of Justice.
Quick Hits
OCR will enforce Title IX protections under the 2020 Title IX Rule, not the 2024 Title IX Final Rule.
The 2020 Title IX Rule provides procedural protections for complainants and respondents and requires supportive measures.
The 2024 Title IX Final Rule, which was criticized for impermissibly expanding the definition of “sex” to include gender identity and other categories, has been invalidated by federal courts.
OCR’s new course for enforcement aligns with Executive Order 14168. The 2020 Title IX Rule, issued by the first Trump administration in May 2020, defines “sexual harassment,” provides procedural protections for complainants and respondents, requires the provision of supportive measures to complainants, and clarifies school-level reporting processes. The 2024 Title IX Final Rule, issued by the Biden administration in April 2024, expanded the definition of “on the basis of sex” to include gender identity, sex stereotypes, sex characteristics, and sexual orientation, and mandated that schools allow students and employees to access facilities, programs, and activities consistent with their self-identified gender.
The DCL follows a series of federal court decisions that vacated or enjoined the 2024 Title IX Final Rule, finding that it violated the plain text and original meaning of Title IX, which prohibits discrimination on the basis of sex in federally funded education programs and activities. The most recent decision, issued by the U.S. District Court for the Eastern District of Kentucky on January 9, 2025, stated that the 2024 Title IX Final Rule “turn[ed] Title IX on its head” by allowing males to identify as and thus become women and vice versa, and by requiring schools to treat such claims as valid. The court also noted that “every court presented with a challenge to the [2024 Title IX] Final Rule has indicated that it is unlawful.” On this note, the DCL states that OCR’s enforcement measures will interpret the word “sex” to mean “the objective, immutable characteristic of being born male or female.”
The DCL also aligns with President Trump’s Executive Order 14168, issued on January 20, 2025, after the president was sworn in for his second term of office. The executive order declares that “[i]t is the policy of the United States to recognize two sexes, male and female” that are “not changeable and are grounded in fundamental and incontrovertible reality.” It directs all executive agencies and departments to “enforce all sex-protective laws to promote this reality,” to use “clear and accurate language and policies that recognize women are biologically female, and men are biologically male,” and to refrain from using federal funds to “promote gender ideology,” a concept that the executive order defines as including a “spectrum of genders that are disconnected from one’s sex.”
The executive order also rescinds several previous executive orders, presidential memoranda, and agency guidance documents issued by the Biden administration that addressed sexual orientation and gender identity issues. The order instructs the attorney general to issue guidance to agencies to “correct” what it describes as the “misapplication of the Supreme Court’s decision in Bostock v. Clayton County, Georgia (2020) to sex-based distinctions in agency activities.” (In Bostock, the Supreme Court of the United States held that Title VII of the Civil Rights Act of 1964’s prohibition against unlawful sex discrimination encompassed discrimination based on sexual orientation or gender identity.)
The executive order authorizes agency action to “ensure that intimate spaces [such as prisons, shelters, and bathrooms] designated for women, girls, or females (or for men, boys, or males) are designated by sex and not identity.” It also prohibits the use of federal funds “for any medical procedure, treatment, or drug for the purpose of conforming an inmate’s appearance to that of the opposite sex.”
Next Steps
In light of OCR’s “Dear Colleague Letter” and President Trump’s Executive Order 14168, schools, colleges, universities, and other recipients of federal financial assistance may want to consider:
reviewing and revising their policies, procedures, and practices to ensure compliance with the 2020 Title IX Rule and executive order; and
providing training and education to staff, faculty, and students on the new requirements and changes related to Title IX enforcement.
Executive Order Covers DEI, Affirmative Action Programs in Private, Government and Educational Sectors
Highlights
A recently issued executive order seeks to end illegal DEI programs
The order bans certain federal contractor affirmative action programs and a subsequent order ends enforcement actions
Further, the order promises formal guidance to educational agencies and higher education institutions relating to affirmative action in admissions and educational programs
Among the executive orders issued this past week is an order titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity. Issued late in the day on Jan. 21, 2025, the order addresses diversity, equity, and inclusion (DEI) programs in the private sector, affirmative action programs by government contractors, and affirmative action in higher education and other educational agencies.
The executive order seeks to end diversity, equity and inclusion programs and affirmative action programs that “violate the text and spirit” of civil rights laws and “undermine the traditional values of hard work, excellence, and individual achievement.”
The executive order revokes four prior executive orders stretching back to 1965, while leaving in place certain earlier orders relating to non-discrimination and equal protection.
Private Sector DEI Programs
One focus of the executive order is to encourage private sector employers to end DEI programs involving “illegal discrimination and preferences” and advance “the policy of individual initiative, excellence and hard work.” To accomplish this, the executive order requires the U.S. Attorney General, in consultation with the heads of all federal agencies, to formulate a strategic enforcement plan to:
Outline steps to deter DEI programs involving “illegal discrimination or preferences”
Identify the “most egregious and discriminatory DEI practitioners.” This includes charging each federal agency to identify up to nine businesses/organizations/institutions of higher education to target for investigation
Evaluate litigation against organizations whose DEI programs are unlawful
Identify strategies to end illegal DEI programs in the private sector and encourage compliance with federal civil rights laws
Propose potential regulatory actions or sub-regulatory guidance on the topic of DEI
The Attorney General, after consulting the heads of federal agencies, is to provide the strategic enforcement plan by May 21, 2025.
Federal Contractor Affirmative Action Programs
Perhaps the most significant part of the executive order is that it revokes Executive Order 11246, the long-standing legal authority from 1965 that requires federal contractors and subcontractors to take affirmative action with respect to the employment of women and minorities and prohibits discrimination on the basis of race, color, national origin, sex and religion. Although federal contractors are permitted to continue to comply with Executive Order 11246 through April 21, 2025, there are significant long-term implications for contractors. These include:
Federal contractors are no longer required or allowed to take “affirmative action” with respect to women and minorities.
Federal contractors are not allowed or encouraged to “engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” This effectively means that federal contractors will no longer set hiring goals when their workforces do not reflect the availability of women and minorities in the pools from which they recruit. Likewise, federal contractors will no longer take good faith efforts to address goals or measure progress toward goals.
Federal contractors are held to strict non-discrimination requirements, including not considering race, color, national origin, sex, sexual preference, or religion in violation of federal civil rights laws.
Federal contracts will require contractors to agree that payment under the contract is contingent upon compliance with all federal non-discrimination laws.
Federal contractors will be required to certify they do not have DEI programs that violate federal non-discrimination laws.
The Office of Federal Contract Compliance Programs (OFCCP), the agency within the Department of Labor that enforces employment laws applicable to federal contractors, will immediately cease enforcing non-discrimination and affirmative action obligations with respect to women and minorities under Executive Order 11246. In follow-up, on Jan. 24 the newly appointed Acting Secretary of Labor issued an order halting all investigations and enforcement activity relating to Executive Order 11246. Accordingly, all complaints, investigations and cases pending before OFCCP, administrative law judges and the Administrative Review Board relating to Executive Order 11246 are closed. The Department of Labor is to notify contractors with pending cases of the closure by Jan. 31, 2025.
Not affected by this executive order are federal contractors’ obligations with respect to veterans and individuals with disabilities. Because Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) (applicable to veterans) and Section 503 (applicable to individuals with disabilities) are legislative, the executive order does not overturn those laws. Federal contractors will continue to have affirmative action and non-discrimination requirements with respect to veterans and individuals with disabilities. OFCCP may continue to enforce those laws but in accordance with the Jan. 24 order by the Acting Secretary of Labor, pending VEVRAA and Section 503 investigations and reviews are placed on hold pending further guidance.
New audits of government contractors are most certainly delayed until that guidance is issued. To commence new audits related to VEVRAA and Section 503, OFCCP will need to amend its current audit letter (scheduling letter and itemized listing). Changing the audit letter will require OFCCP to go through a notice, comment and approval process.
Affirmative Action in Education
The final prong of this executive order addresses affirmative action in educational programs. The executive order requires the Attorney General and Secretary of Education to issue joint guidance to higher education institutions and state/local agencies receiving federal funding with respect to complying with the holding of Students for Fair Admissions, Inc. v. President and Fellows of Harvard College. It is anticipated this guidance will address the use of race in admissions, scholarships, financial assistance and other aspects of the educational process.
Takeaways
In light of the executive order, employers should consider reviewing DEI programs to ensure they comply with anti-discrimination laws.
Government contractors should continue to comply with affirmative action requirements with respect to veterans and individuals with disabilities. They may continue their affirmative action programs with respect to women and minorities until April 21, 2025, but should watch for additional guidance on eliminating the affirmative action aspects of these plans, while continuing to focus on a commitment to non-discrimination.
Higher education and other educational agencies should continue to comply with the holding of Students for Fair Admissions and wait for further guidance from the Secretary of Education and Attorney General.
The Stop Campus Hazing Act—The Bipartisan Effort to Prevent Hazing in Higher Education Settings
At least forty-four states have enacted laws prohibiting hazing. However, the regulations, penalties, and requirements vary significantly by state. The enactment of the federal Stop Campus Hazing Act (SCHA) exemplifies the bipartisan effort aimed at combating hazing and protecting the health and safety of students on college campuses.
The SCHA’s focus on transparency allows students and their parents to make informed decisions when choosing which institutions to attend for postsecondary education and what institutional student organizations they should join. The SCHA also significantly increases the obligations of institutions to not only track, report, and publicly disclose incidents of hazing on campus, but also to develop hazing prevention and awareness programs for students, faculty, and staff.
Quick Hits
The SCHA requires that higher education institutions participating in Title IV of the Higher Education Act of 1965 programs collect, report, and publicly disclose hazing-related incidents and implement hazing prevention and awareness programs.
The SCHA also mandates that institutions, as part of their Clery Reports, begin collecting hazing data and statistics as of January 1, 2025, and include, among other items, all hazing incidents that were reported to campus security officers or local law enforcement within their 2026 Clery Reports.
The SCHA provides the first federal definitions of “hazing” and “student organizations.”
On December 23, 2024, President Joe Biden signed the Stop Campus Hazing Act into law, making it the first federal law to create anti-hazing requirements for institutions of higher education. The SCHA amends Section 485(f) of the Higher Education Act of 1965, otherwise known as the “Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act” (Clery Act). Notably, the SCHA also renamed the Clery Act the “Jeanne Clery Campus Safety Act,” evidencing the growth of the Clery Act over the last few decades and its application to a full spectrum of campus safety issues, which now includes hazing.
The SCHA went into effect on January 1, 2025, and focuses on increasing transparency around the issue of hazing on college campuses. It mandates that higher education institutions participating in programs under Title IV of the Higher Education Act of 1965 comply with, among other things, enhanced reporting guidelines and hazing prevention education requirements in order to achieve this goal of transparency.
In an effort to achieve its goal of transparency, the SCHA created two new hazing incident reporting procedures: (1) a new “Campus Hazing Transparency Report” requirement; and (2) a new mandate requiring higher education institutions to include campus hazing incidents within their annual security reports (often referred to as “Clery Reports”), as well as information relating to the institutions’ hazing policies and campus-wide hazing education and prevention programming.
The Implementation of Campus Hazing Transparency Reports
The SCHA requires institutions to create, publish, and update Campus Hazing Transparency Reports. The Campus Hazing Transparency Report must be posted on an institution’s website in a “prominent location” and include a statement notifying the public of the annual availability of statistics on hazing, including a link to the same, and information about the institution’s policies related to hazing and applicable local, state, and tribal laws.
Beginning on July 1, 2025, institutions must begin drafting Campus Hazing Transparency Reports summarizing their findings related to student organizations that are found to be in violation of the SCHA. The SCHA requires institutions to publish their Campus Hazing Transparency Reports no later than December 23, 2025. These reports must be updated “not less frequently than 2 times each year” and must include the following information: (1) the name of the organization involved in the hazing incident; (2) a description of the violation; (3) the date of the incident and investigation; (4) a description of the institution’s findings; and (5) the sanctions that were imposed as a result thereof.
Additionally, Campus Hazing Transparency Reports must not include any personally identifiable information (PII) about any particular student, or any information that could reveal PII. Further, information included in each report and update must be maintained by the institution for five calendar years.
New Disclosure Mandates for Clery Act reports
Institutions are currently mandated by the Clery Act to publish and distribute annual security reports, also known as Clery Reports. Clery Reports disclose campus crime statistics and campus security policies. The SCHA requires that institutions begin collecting hazing data and statistics as of January 1, 2025, and include all hazing incidents that were reported to campus security officers or local law enforcement within their 2026 Clery Reports.
In addition, each institution’s Clery Report must include a statement of its current hazing policies, how to report incidents of hazing, the process used to investigate alleged hazing violations, and information on applicable local, state, and tribal hazing laws. A Clery Report must also detail the institution’s hazing prevention and awareness programs.
Implementation of Hazing Prevention and Awareness Programs
In addition to the obligations outlined above, the SCHA also compels institutions to enact hazing prevention and awareness programs in their efforts to prevent hazing. The SCHA specifies that any such program implemented by an institution be “research-informed” and available “campus-wide” to effectively reach students, staff, and faculty. Further, the SCHA suggests that the program include “skill building for bystander intervention, information about ethical leadership, and the promotion of strategies for building group cohesion without hazing.” Therefore, if an institution does not have a hazing prevention and awareness program in place, or such program does not comply with the SCHA’s requirements, the policy must be in compliance on or before June 23, 2025.
In conjunction with implementing a hazing prevention and awareness program, the SCHA also requires an institution to create a hazing policy statement reflective of its anti-hazing policies on or before June 23, 2025. Pursuant to the SCHA, the hazing policy statement must include (1) a “statement of current policies relating to hazing (as defined by the institution)”; (2) the process by which someone may report an incident of alleged hazing; (3) an overview of the institution’s procedure for investigating a claim of hazing; and (4) all applicable local, state, and tribal laws.
Notably, while the SCHA requires institutions to enact anti-hazing policies, it does not specify what information should be included within those policies. However, the SCHA does mandate that the policy statement describe the institution’s hazing prevention and awareness program. Further, the information contained within the policy statement must also be included within the institution’s hazing prevention and awareness program. Therefore, institutions may want to immediately either begin reviewing their current hazing policies and prevention and awareness programs or begin creating policies and programs to ensure compliance with the SCHA’s guidelines.
Federal Definitions for ‘Hazing’ and ‘Student Organization’
The SCHA is the first law to provide federal definitions of “hazing” and “student organization” for purposes of Clery Act reporting. These definitions are important, as they dictate what incidents are deemed “reportable incidents” for higher education institutions to include within their Clery Reports. Because the SCHA’s definitions for “hazing” and “student organization” are broader than most state laws’, to the extent that these definitions conflict with state or local laws, institutions likely should utilize the new federal definitions of “hazing” and “student organizations” when drafting the applicable incident report in order to ensure compliance.
“Hazing” is defined under the SCHA as “any intentional, knowing, or reckless act committed by a person (whether individually or in concert with other persons) against another person or persons regardless of the willingness of such other person or persons to participate, that (I) is committed in the course of an initiation into, an affiliation with, or the maintenance of membership in, a student organization, [e.g., a club, student government, athletic team, fraternity, or sorority]; and (II) causes or creates a risk, above the reasonable risk encountered in the course of participation in the institution of higher education or the organization (such as the physical preparation necessary for participation in an athletic team), of physical or psychological injury.”
The SCHA provides a list of examples of conduct that “causes or creates a risk,” including:
“whipping, beating, striking, electronic shocking, placing of a harmful substance on someone’s body, or similar activity”;
“causing, coercing, or otherwise inducing sleep deprivation, exposure to the elements, confinement in a small space, extreme calisthenics, or other similar activity”;
“causing, coercing, or otherwise inducing another person to consume food, liquid, alcohol, drugs, or other substances”;
“causing, coercing, or otherwise inducing another person to perform sexual acts”;
“any activity that places another person in reasonable fear of bodily harm through the use of threatening words or conduct”;
“any activity against another person that includes a criminal violation of local, State, Tribal, or Federal law”; and
“any activity that induces, causes, or requires another person to perform a duty or task that involves a criminal violation of local, State, Tribal, or Federal law.”
Further, the SCHA defines the term “student organization” as “an organization at an institution of higher education (such as a club, society, association, varsity or junior varsity athletic team, club sports team, fraternity, sorority, band, or student government) in which two or more of the members are students enrolled at the institution of higher education, whether or not the organization is established or recognized by the institution.” However, the SCHA does not define what constitutes “above the reasonable risk” or what actions establish “an affiliation with” a student organization.
Summary of Critical Reporting Deadlines
Pursuant to the SCHA, the critical reporting deadlines are as follows:
January 1, 2025: Institutions must begin compiling statistics on hazing to include in their 2026 Clery Reports.
June 23, 2025: Institutions must publish their hazing policies and prevention programs.
July 1, 2025: Institutions must have systems in place for documenting violations of their anti-hazing policies in order to include those violations within their Campus Hazing Transparency Reports.
December 23, 2025: Institutions must publish their Campus Hazing Transparency Report on their website, documenting violations occurring since July 1, 2025.
October 1, 2026: Institutions must include 2025 hazing statistics within their Clery Reports for the first time.
Key Takeaways
As of January 1, 2025, institutions may want to begin collecting data for mandatory Clery Reporting. Institutions may want to confer with their campus Clery Act coordinators and other applicable staff to understand what constitutes an incident of “hazing,” how to properly count and document each incident of hazing, and which campus groups constitute “student organizations” under the Stop Campus Hazing Act.
Institutions may want to complete a thorough review of all current anti-hazing policies and/or enact anti-hazing policies on or before June 23, 2025. All policies are required to comply with the definition of “hazing” as outlined within the SCHA, include information on how to report an incident of alleged hazing, and outline the process of investigating an incident of alleged hazing.
Institutions may want to update and/or create hazing prevention and awareness programs for students, faculty, and staff.
Institutions may want to ensure that student handbooks and other institutional documents reflect the SCHA’s requirements and definition of “hazing.”
Lastly, institutions may want to ensure staff, including campus security authorities and campus Clery Act coordinators, are properly trained and notified of their responsibilities when a report of alleged hazing is made and have established a system for the collection, reporting, and documentation of the required data and information on hazing incidents.
Update: Former Collegiate Football Stars’ NIL Lawsuits for Retroactive Compensation
For many years, college athletes fought for the right to license their name, image, and likeness (NIL) while keeping their amateur status and participating in college athletics. Since the NCAA conceded and allowed payments to student athletes, litigation has shifted to those athletes who now want to receive compensation for failing to be permitted to collect such payments while they were playing collegiate sports. Following our recent article in Sports Litigation Alert about former collegiate student athletes filing NIL antitrust lawsuits against the NCAA and others for retroactive compensation, interesting developments have ensued in the NIL legal landscape. In this update, we cover advancements in previously discussed lawsuits, newly filed NIL lawsuits, and new NIL legislation.
Case Update: Retroactive Compensation for Ex-Michigan Football Players’ NIL
After filing their lawsuit on September 10, 2024, against the National Collegiate Athletic Association (NCAA), among others (the MI Defendants), on December 12, 2024, the ex-Michigan football players (the MI Plaintiffs) asked a judge to certify their proposed student-athlete class on December 5, 2024; the MI Plaintiffs admit that it is early in the case to do so. The motion asks the judge to certify a plaintiff class, defined as follows:
All persons who were NCAA student athletes prior to June 15, 2016, whose image or likeness has been used in any video posted by or licensed by the NCAA, Big Ten Network, or their agents, distributors, contractors, licensees, subsidiaries, affiliates, partners, or anyone acting in concert with any of the foregoing entities or persons.
According to the motion, “Plaintiffs’ counsel has over 270 former student athletes who have joined this action,” and they estimate that there will be thousands of members. The NCAA and Big Ten Network have not yet responded to the MI Plaintiffs’ complaint. On December 17, 2024, the parties filed a joint stipulation to adjust deadlines, which provided the Defendants until January 13, 2025, to file responsive pleadings (the Defendants indicated that they intended to file motions to dismiss and/or to transfer venue), with a deadline to respond to the Motion for Class Certification suspended pending “resolution of Defendants’ forthcoming responsive motions.”
On January 13, 2025, the MI Defendants filed a Motion to Dismiss the Amended Complaint, arguing the MI Plaintiffs’ claims are untimely, as much of the alleged conduct took place well over four years before the action commenced and was thus barred by the four-year statute of limitations for antitrust claims. The MI Defendants also argued that the MI Plaintiffs’ claims are barred because of their participation in previous lawsuits that addressed NIL compensation, all of which have settled. In a separate filing, the MI Defendants moved to transfer venue to the United States District Court for the Southern District of New York (SDNY) to proceed alongside the earlier-filed action Chalmers v. National Collegiate Athletic Association, No. 1:24-cv-05008 (PAE) or, in the alternative, to stay proceedings pending the outcome of Chalmers, which was filed in New York federal court in July, before this case was commenced.
Case Update: Retroactive Compensation for Reggie Bush’s NIL
On September 23, 2024, Reggie Bush filed suit against the University of Southern California (USC), the Pac-12 Conference (Pac-12), and the NCAA (collectively, the CA Defendants), alleging violations of the California Cartwright Act for unreasonable restraints of trade or commerce, a violation of the California Unfair Practices Act, and for unjust enrichment. The CA Defendants have since urged a Los Angeles state court to dismiss the case, arguing that Bush’s claims are time-barred under the Cartwright Act’s four-year statute of limitations, since Bush explicitly alleged that his injuries occurred while he was in college. The NCAA attorneys also argue that the Complaint is “legally insufficient,” with “few facts” beyond Bush’s football career.
Case Update: In re College Athlete NIL Litigation
As the parties in In re College Athlete NIL Litigation await final court approval for the proposed $2.78 billion settlement for NIL compensation, on December 5, 2024, the National College Players Association, an advocacy group made up of four politicians who are involved in drafting NIL laws in their states, released a statement objecting to the settlement. The lawmakers provided that their states’ NIL laws shared several common clauses that conflict with the terms of the House v. NCAA settlement – including “(complying) with or enforcing any conference or NCAA rules that restrict or prohibit NIL compensation paid by athletic boosters and NIL collectives to athletes and rules that otherwise do not comply with our state’s NIL law.” They also emphasized that because their states were not party to the NIL class action, “the settlement does not affect our states’ ability to enforce our NIL laws.” However, just six days later, the lawmakers retracted their statement, admitting that the settlement “has not been deemed illegal in any way.”
On December 20, 2024, the parties jointly filed a supplemental brief addressing the court’s Tentative Ruling on their Joint Motion for Approval of Additional Settlement Class Communications. The parties had agreed to a revised question-and-answer document that can be published. This document was necessitated by the number of prospective student athletes who have “frequently approached NCAA member institutions with clarifying questions about the settlement.” The parties have requested that the court approve a standardized communication that can be provided to prospective and current student athletes. Objectors to the settlement filed opposition to the proposed standardized communication, claiming that one of the items in the question-and-answer document was incorrect and needed to be corrected, insofar as the objectors claim that:
“Question No. 4 misleadingly implies that schools’ discretion is currently bound by set roster sizes under NCAA rules. It is not. The Amended Settlement imposes those boundaries. This incomplete Q&A ‘will surely result in confusion’ among potential Class Members and must be corrected.”
The objectors believe even posing the question “Is a student athlete’s roster spot guaranteed?” is itself misleading and have submitted that the proposed Q&A omits the most important information about how the Amended Settlement changes the state of play for countess student athletes.
On December 23, 2024, the court granted the Joint Motion for Approval of the Additional Settlement Class Communication, which permits the publishing of the revised Q&A.
The final settlement approval hearing for In re College Athlete NIL Litigation is scheduled for April 7, 2025.
On December 17, 2024, counsel in the instant three consolidated cases (House v. NCAA, Hubbard v. NCAA, and Carter v. NCAA) filed a motion requesting Judge Wilken to approve more than $500 million in attorneys’ fees and costs, to be paid over 10 years – the same time frame that NIL money and shared revenues are to be paid out to athletes going forward. Counsel noted that their request of 20 percent of the settlement funds in the House and Hubbard cases was reasonable in relation to the work involved, and also below the generally accepted market rate of 25 percent.
Case Update: Terrelle Pryor’s NIL Suit
Following former Ohio State football player Terrelle Pryor’s complaint filed on October 4, 2024, the NCAA, Learfield Communications LLC, The Ohio State University, and The Big Ten Conference, Inc. (the OH Defendants) filed motions to dismiss on January 3, 2025. In a joint motion, the OH Defendants argued that Pryor’s claims are time-barred because he left college football at least 14 years ago, which is outside the Clayton Act’s four-year statute of limitations for federal antitrust claims. Further, the OH Defendants argued Pryor’s claims are barred by his alleged participation in the Alston and Keller settlement releases and the O’Bannon judgment. Additionally, the OH Defendants argued that Pryor has not plausibly pleaded an injury since he has “nonexistent rights,” “no copyright interests in games in which he played,” and “no cognizable right of publicity in rebroadcasts of NCAA game footage.” In the joint motion, the OH Defendants also requested oral arguments.
Individually, The Ohio State University filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that Eleventh Amendment “sovereign immunity bars the Plaintiff’s claims against Ohio State” since “Ohio State is a public university and instrumentality of the State of Ohio, and Plaintiff is a citizen and resident of Pennsylvania.” Similarly, Learfield Communications filed its own motion to dismiss, citing immunity under both the state action doctrine and the Noerr-Pennington doctrine.
New Case: South Dakota NIL Lawsuit
While the In re College Athlete NIL Litigation settlement was pending preliminary approval before District Court Judge Wilken, on September 9, 2024, by and through the South Dakota attorney general, Marty Jackley, the State of South Dakota, and the South Dakota Board of Regents on behalf of South Dakota State University and the University of South Dakota (collectively, SD Plaintiffs) filed The State of South Dakota et al. v. National Collegiate Athletic Association 4:24-cv-04189 in Brookings County Circuit Court in South Dakota. The University of South Dakota and South Dakota State University are members of the Summit League Basketball Conference, which is a non–Power Four conference member of the NCAA.
The complaint claimed that the $2.78 billion proposed settlement would go primarily to student athletes from the “Power Four” conferences – the Atlantic Coast Conference, Big Ten Conference, Big 12 Conference, and Southeastern Conference – leaving smaller schools such as those in South Dakota to face an unfair burden of the settlement’s cost. Jackley argued that such smaller schools would have to collectively shell out roughly $960 million in NCAA distributions over the next 10 years to assist the deal – noting that less than 10 percent of the proceeds have been saved for female student athletes. Further, Jackley argued the proposed settlement would unlawfully rid the NCAA of its guiding principle of amateurism. In their prayer for relief, the SD Plaintiffs seek damages, declaratory relief, and injunctive relief.
On October 9, 2024, the NCAA filed its Notice of Removal under federal-question jurisdiction. The SD Plaintiffs subsequently argued for remand to state court, arguing that “the California court has already ruled that there is no common question of law or fact between the settlement approval and the NCAA’s allocation model under its rules, bylaws or constitution.” In response, the NCAA argued the SD Plaintiffs voluntarily chose to participate in the NCAA, and “a lawsuit seeking to undo a federal court’s preliminary approval of a settlement of claims under federal law plainly belongs in federal court.”
Further, the NCAA argued that Count 6 of the Complaint raises a federal issue, “namely whether the settlement meets the requirements imposed by Fed. R. Civ. P. 23 for judicial approval of the settlement.” Thereafter, on November 15, 2024, SD Plaintiffs filed their Amended Complaint, removing Claim 6. On November 18, 2024, SD Plaintiffs filed their Reply Brief in Support of Motion for Remand, arguing that “Claim 6 was the only ‘federal question’ the NCAA identified in its response brief.”
On November 13, 2024, SD Plaintiffs filed a motion to compel defendants to provide notice to South Dakota, and other affected states and their institutions of higher education, under 28 U.S.C. section 1715(b), since the “NCAA’s notice facially fails to comply” with the two requirements under the statute. The State of South Dakota contacted the NCAA’s counsel on October 17, 2024, stating that the notice was deficient; the NCAA did not respond within the 10-day period provided by the State of South Dakota.
On January 15, 2025, the SD Plaintiffs filed a Notice of Decision Re: Motions for Remand and Stay. In the notice, the SD Plaintiffs asked the court to take notice of the decision in Royal Canin, Inc. v. Wullschleger, 23-677 (U.S.), wherein the court “unanimously held that when an action is properly removed to federal court on the basis of federal-question jurisdiction, but the plaintiff then amends the complaint to omit the federal questions leaving only supplemental state-law claims, ‘the federal court loses its supplemental jurisdiction over the related state-law claims [and] [t]he case must therefore return to state court.’”
Additional NIL Updates: New Legislation
In other NIL news, on November 18, 2024, Ohio Governor Mike DeWine signed Executive Order 2024-08D, effective immediately, allowing Ohio colleges to pay student athletes for their NIL. The law provides that any post-secondary educational institution may offer compensation or compensate a student for the use of the student athlete’s NIL provided that no post-secondary education shall use funds allocated by the State of Ohio. The executive order will expire if the settlement comes into “full operational effect.” Despite this Order, Ohio State continues to be at the top of the list of schools benefitting from NIL deals, reportedly spending “around $20 million to keep their 2024–2025 football team intact.”
Conclusion
This is a highly active time for college athlete compensation, and the impact it will have on the industry is still unknown. College sports is already showing signs that the availability of this money has reshaped recruiting dynamics, as schools and boosters are using NIL deals to entice high school athletes and transfer students. A survey conducted by the National College Players Association reported that nearly 75 percent of athletes consider NIL opportunities an important factor when choosing a school. The competition on the field is now met by competition off the field in trying to attract the top talent.
As these competitions increase, universities must contend with the litigation from prior athletes and there does not seem to be any signs that this will be slowing anytime soon. Whether legislation will help is also undetermined at this time. In the interim, it appears that the current top student athletes are benefitting from the new availability of money, and prior standouts are interested in their own gain.
Two-Minute Drill: Department of Education Guidance and Department of Justice Weigh in on House Settlement
Change is inevitable. This sentiment resonates across the college sports landscape. Few, if any, would argue that the current model of college athletics is sustainable. While fans continue to tune in and March Madness remains a cornerstone of excitement, the line between amateurism and professionalism in college sports has grown increasingly blurry since July 2021.
As the fallout continues from the potential settlement of an antitrust class-action lawsuit filed against the NCAA — providing for nearly $2.8 billion in backpay to former athletes — new guidance from the Department of Education’s Office for Civil Rights and a Statement of Interest from the Department of Justice may disrupt the approval and impacts of the settlement, as well as the immediate future of college sports. The new DOE guidance warns NCAA schools that name, image, and likeness (NIL) payments must be distributed in a nondiscriminatory manner, pursuant to Title IX regulations. Meanwhile, the DOJ’s statement objects, among other things, to the settlement’s 22% cap on revenue sharing, citing concerns over antitrust violations since the cap was not collectively bargained.
With the potential final approval of the House v. NCAA settlement on the horizon, a hearing is set for April 7, 2025, rampant claims of transfer portal tampering, and headlines about college athletes signing deals rivaling NFL rookie contracts, the call for a solution to this largely unregulated system is louder than ever. Proposals for a “new model” are making headlines, but without fundamental legal and organizational changes, any attempts to fix college sports’ NIL system are as futile as us trying to guard Cooper Flagg at the top of the key — doomed to fail.
Under the proposed settlement in House v. NCAA, which has been preliminarily approved, in addition to the nearly $2.8 billion in backpay to Division I athletes who competed from 2016 to the present, a 10-year revenue-sharing plan would allow NCAA conferences and their member schools to share 22% of annual revenue with student-athletes. The settlement would establish a salary cap framework, in which schools would initially be able to pay their athletes up to $22 million annually.
Title IX
The new fact sheet from the Department of Education, released on January 16, 2024, may impose new guardrails on how the proposed revenue-sharing plan is implemented. The department’s guidance states that the department considers NIL compensation provided by a school as “athletic financial assistance.” Under Title IX, schools must provide equal athletic opportunity, regardless of sex, including “athletic financial assistance” awarded to student-athletes. The department further stated: “The fact that funds are provided by a private source does not relieve a school of its responsibility to treat all of its student-athletes in a nondiscriminatory manner [and it] is possible that NIL agreements between student-athletes and third parties will create similar disparities and therefore trigger a school’s Title IX obligations.”
Whether or not the new guidance from the Department of Education will significantly impact the distribution of the payments under the House v. NCAA settlement, with objections to the settlement due at the end of January, remains an open question. Jeffrey Kessler, an attorney for one of the plaintiffs in the class action, said that the guidance “has no impact on the settlement at all.” Instead, “the injunction does not require the schools to spend the new compensation and benefits that are permitted to any particular group of athletes and leaves Title IX issues up to the schools to determine what the law requires. [The House v. NCAA case] resolved antirust claims — not Title IX claims.”
Additionally, the timing of the new guidance, only days before the beginning of President Donald Trump’s new administration, may also influence how long the fact sheet will be relevant, if at all. Gabe Feldman, a professor of sports law at Tulane, stated that “the timing does call into question the impact this is going to have, because it is likely, as in a number of areas of law, that a new administration will reverse, rescind, amend, or completely change the guidance.” Indeed, the guidance itself states that the fact sheet “does not have the force and effect of law” and is “not meant to be binding” beyond what is required by actual law. Finally, in the wake of the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo last year, overruling the Chevron doctrine that required courts to defer to agency interpretation of ambiguous statutes, the new guidance will likely have an even less binding effect.
The new guidance, released just days before the beginning of a new presidential administration, implies that schools may face risks under Title IX with the distribution of NIL payments, even if third parties or collectives are providing the funds. However, with a new administration, the position of the DOE could change resulting in even more uncertainty.
Cap on Revenue Sharing
The DOE was not the only government agency to raise concerns over the proposed House settlement. In a Statement of Interest filed on January 17, the DOJ raised objections surrounding the proposed settlement’s 22% cap on revenue sharing. The DOJ argues that the cap “functions as an artificial cap on what free market competition may otherwise yield” and raises “important questions about whether the settlement is fair, reasonable, and adequate.” The DOJ argues that even though the settlement would increase the cap on NIL payments from zero to $22 million, “the new amount is still fixed by agreement among organizations that collectively control the entire labor market.” Additionally, the DOJ objects to arguments that the revenue share cap is similar to caps imposed in professional sports leagues. The DOJ argues that salary caps in professional sports leagues were collectively bargained, which are generally immune from antitrust scrutiny. In this case, however, the 22% cap was not collectively bargained, and the proposed settlement was negotiated without college athletes benefiting from the substantive and procedural rights afforded to workers during collective bargaining.
The DOJ is also concerned that the proposed settlement could be used by the NCAA and power conferences as a defense in future antitrust cases. The DOJ has asked the court to either decline to approve the settlement or make it clear that the approved salary cap does not constitute a judgment on its competitive impact or that it complies with antitrust laws. Effectively, the DOJ has asked the court to either decline to approve the settlement or allow future litigants to file antitrust claims regarding the cap.
In order to approve the settlement, Judge Claudia Wilken, the presiding judge over the House case, must assess whether the settlement is fair, reasonable, and adequate. It remains to be seen whether Wilken will follow the DOJ’s requests. Regarding the settlement being used as a defense, the proposed settlement has certainly not dissuaded litigants from filing antitrust actions against the NCAA. Even after preliminary approval, at least two college athletes brought antitrust claims against the NCAA — a trend that is likely to continue, even if the settlement is granted final approval. The timing of the Statement of Interest is also notable, as it was filed mere days before Trump was sworn into office. The new administration might not align with the previous DOJ’s position, but the timing of confirmation hearings could delay any retraction or opposing opinion prior to the April 7th hearing.
Schools and athletes alike should continue to closely monitor the progress of the House v. NCAA settlement, as well as potential changes or rollbacks from the new administration that would affect distribution of the settlement payments and the proposed new revenue-sharing plan. With so much uncertainty surrounding college sports, schools are navigating uncharted waters, trying to maintain a competitive edge. Without a clear picture of the future, any decisions may feel like walking a tightrope — one wrong move could lead to success or setback.
Vigorous Immigration Law Enforcement Is Here: I-9 Inspections, Site Visits, and More
President Trump’s new administration takes charge this week with a renewed focus on enforcing federal immigration law. In fact, as explained in today’s companion article, one of President Trump’s first action items on Inauguration Day was the issuance of a series of executive orders relating to immigration policy. Employers should therefore review their operations and identify steps to improve compliance and prepare for possible government visits. Here are a few key areas to consider.
Form I-9 Inspections
Under the new administration, Immigration and Customs Enforcement (ICE) will increase its scrutiny of employers’ compliance with Form I-9, Employment Eligibility Verification by initiating a higher number of I-9 inspections. Some inspections will be targeted, and some will be random to encourage I-9 compliance among employers. As to targeted inspections, ICE likely will focus initially on employers operating in areas that may affect infrastructure or national security (e.g., electrical grid, other energy, transportation, some technology). ICE also may target employers in sectors that historically have employed higher numbers of unauthorized individuals. These sectors include hospitality, food processing, manufacturers that heavily rely on temporary staffing agencies, retail, and certain construction and agriculture operations.
Poor I-9 compliance can lead to significant fines. The United States Department of Homeland Security (DHS) increases fine levels annually. On January 2, 2025, DHS announced the following new I-9 fine schedule:
I-9 Paperwork Violations: $288 to $2,861 per Form I-9
Knowingly Employing Unauthorized Alien (First Offense): $716 to $5,724 per individual
Knowingly Employing Unauthorized Alien (Second Offense): $5,724 to $14,308 per individual
Knowingly Employing Unauthorized Alien (Third or More Offense): $8,586 to $28,619 per individual
The federal government will announce additional I-9 related fine increases in the weeks to come. These will include penalties for violating the antidiscrimination provisions of the I-9 rules, such as for document abuse (asking for specific documents or for more or different documents after the employee already has presented qualifying I-9 documents).
To defend against the risk of I-9 penalties, employers should conduct periodic training of employees and ensure that only well-trained employees handle I-9 duties. Employers also should plan and conduct periodic internal I-9 audits. ICE may consider an employer’s internal audits as a mitigating factor when assessing fines. While internal I-9 audits can be helpful, they must be correctly completed. Flawed internal audits can result in additional mistakes and higher fines. Some of the mistakes may lead to complaints of discrimination to the United States Department of Justice’s Immigrant and Employee Rights (IER) division.
For information, please see our recent post with I-9 compliance tips. Guidance also can be found in the government’s I-9 Handbook for Employers and at I-9 Central.
Site Visits
Immigration-related government visits to employer facilities are likely to increase. Among others, United States Citizenship and Immigration Services (USCIS), ICE, and the United States Department of Labor (DOL) may soon be visiting. These visits may occur with or without advance notice. They may occur randomly or based upon tips that an agency has received regarding a particular employer.
FDNS Visits
USCIS is likely to increase the number of Fraud Detection and National Security (FDNS) visits related to an employer’s recent immigration cases. Most FDNS visits are unannounced and are related to H-1B specialty occupation and L-1 intracompany transfer cases. FDNS Officers usually visit the employer in the months following favorable decisions on cases. In doing so, the Officers ask to interview the person who signed the immigration petition on behalf of the employer. FDNS Officers usually will not have a subpoena or warrant. USCIS asserts that the employer agreed to these visits when it signed and submitted the immigration petitions and applications. If the employer refuses to cooperate with the FDNS site visit, the Officers will note the employer’s response and refer the matter to a higher level within USCIS. USCIS may reopen the immigration case for further review or to issue a Notice of Intent to Revoke the approval. In some situations, USCIS may refer the matter to ICE to investigate.
If the site visit proceeds, FDNS Officers will ask questions about the employer’s business operations, the business locations, the number of employees, the job title and job duties of the H-1B or L-1 employee named in the immigration case, the employee’s regular hours of work, and employee’s current rate of pay. The FDNS Officers may ask to see documents to verify the active business operations and the employee’s rate of pay. The Officers also may ask to speak with the foreign employee.
STEM OPT Site Visits
ICE may increase visits to employers that employ foreign students based upon STEM Optional Practical Training (“STEM OPT”). ICE often will notify the employer a few days in advance of the upcoming visit, unless ICE has received information suggesting a serious violation. ICE will have a copy of the employer’s Form I-983 Training Plan and seek to confirm that the employer is following the plan. ICE also may review the employer’s compliance with the E-Verify program.
Best Practices to Prepare for Immigration-Related Site Visits
Employers that are commencing immigration cases or are submitting STEM OPT training programs must prepare for this increased scrutiny. Here are a few tips:
Review even more carefully all future submissions to USCIS, DOL, or ICE, and confirm the accuracy of the employer’s representations before signing and filing.
Review again the approved immigration applications, petitions, or active training programs that provide the employer’s basis for employing any current employees. Confirm that the company is complying with the representations made to the federal government (business information, job title, job duties, hours, rate of pay, worksite location, etc.). File an amended application, petition, or training program if appropriate.
For H-1B cases, review the related Labor Condition Application (LCA) Public Access File and make sure it is up to date and contains all of the required documents. (In addition to FDNS, the DOL may conduct a site visit to review LCA compliance. The DOL usually will give the employer advance notice.)
For E-Verify employers, review your organization’s Memorandum of Understanding and compliance with the E-Verify program.
Alert the receptionist that no government visitor should be given access to the facility beyond the lobby and that in-house counsel or the Human Resources manager should be contacted immediately should such a visitor arrive.
Obtain the business card of the government officials who visit. Call counsel before admitting the government officials beyond the reception area. In most circumstances, counsel may participate by phone or in person during the government’s interview of the employer.
Facility Wide Enforcement Actions (Worksite Raids)
In circumstances where the employer is suspected of employing a high number of unauthorized individuals, ICE is more likely to conduct enforcement across the employer’s facility (surround the facility and initiate a worksite raid that may result in numerous arrests of employees suspected to be unauthorized). ICE will come with a warrant, and the employer is usually unable to stop the worksite action.
Employers that encounter ICE initiating such action should do the following:
Ask to speak with the ICE Officer or Special Agent in Charge.
Ask the ICE Officer for his or her business card, badge number, and the warrant to confirm the scope of what ICE is permitted to search or seize.
Call counsel immediately and put counsel in contact with the ICE Officer or Special Agent in Charge of the raid.
If you are comfortable doing so, ask the ICE Officer to observe ICE’s actions within the facility. ICE may deny the request and instruct the employer’s management to remain in a certain location. Occasionally, shadowing the Officer in Charge is permitted. Do not obstruct or otherwise take steps that could constitute interference with the operation.
Ask to make copies of any documents seized by ICE and for an inventory of the items taken.
Follow up further with counsel regarding legal issues and potential employer liability arising from the raid. Develop a plan to cover positions that may be open following the raid.
Conclusion
Employers should be vigilant in complying with all employment-related immigration laws. Many of these laws contain compliance and antidiscrimination provisions.
OCR Issues Guidelines on Title IX’s Application to NIL Payments
As the sun sets on the Biden administration, the Office for Civil Rights of the U.S. Department of Education (OCR) provided a new Fact Sheet on Jan. 16, 2025, to “clarify” how Title IX will apply to universities’ direct payments to student-athletes for use of their names, images and likenesses (NIL) under the proposed House vs. NCAA settlement. The Fact Sheet is consistent with decades of prior OCR guidance. It is not surprising that “compensation from a school for use of a student-athlete’s NIL” under the House settlement will qualify as “athletic financial assistance” subject to Title IX. It is also not surprising that OCR reminded schools that they retain responsibility to treat male and female student-athletes equitably even when NIL payments are made by affiliated third parties like collectives.
The key, as always, to Title IX compliance is in the implementation – the details of how schools are implementing their House structures.
Title IX Applies to Schools’ House Payments
While OCR inaccurately mingled two different Title IX standards applicable to athletic financial assistance on page 4 of the Fact Sheet (which confused many commentators on social media), OCR ultimately set forth the standard in the applicable Section 4 that is consistent with Title IX regulations dating back to 1979:
“When a school provides athletic financial assistance in forms other than scholarships or grants, including compensation for the use of a student-athlete’s NIL, such assistance also must be made proportionately available to male and female athletes.” (Emphasis added.)
This is not necessarily a dollar-for-dollar proportionality test. There may be legitimate non-discriminatory justifications to explain differences in who qualifies for House payments as well as their amounts, as long as a school’s House payment structure provides for equitable availability.
Implementation Is Key
The pathway for schools to implement House consistently with federal civil rights laws remains available for those universities that choose to take it.
The keys for schools’ Title IX-compliant implementation will remain implementing an equitable NIL marketing strategy and structuring good-faith NIL valuations, as many schools have begun to do. Of course, there are many nuances to the legal implementation.
Conclusion
Because the new Fact Sheet doesn’t change long-standing Title IX guidance, this particular Biden administration action is unlikely to affect Judge Claudia Wilken’s approval of the House settlement itself, and nothing would be accomplished if this Fact Sheet were withdrawn by OCR next week because it merely reiterates existing Title IX concepts. Of course, the incoming administration or Congress may take a new legal approach to this evolving area of our industry.
Lawsuits are inevitable over Title IX’s application to schools’ House implementation strategies. Developing Title IX-compliant NIL and House frameworks now are essential for future defense strategies.