Lawsuit accuses NCAA of antitrust violation due to transfer rule
Charleston, W.Va. — A federal lawsuit filed by a group of states alleges the NCAA's transfer rule for college athletes violates antitrust law.
The lawsuit, filed in West Virginia's northern district, challenges the NCAA's authority to impose a one-year delay in the eligibility of certain athletes who transfer between schools. The suit said the rule “unjustifiably restrains the ability of these college athletes to engage in the market for their labor as NCAA Division I college athletes.”
The lawsuit filed by West Virginia and six other states alleges violations of the Sherman Act.
NCAA rules allow underclassmen to transfer once without having to sit out a year. But an additional transfer as an undergraduate generally requires the NCAA to grant a waiver allowing the athlete to compete immediately. Without it, the athlete would have to sit out for a year at the new school.
The NCAA has implemented stricter guidelines for granting those waivers on a caseby-case basis.
In an interview with The Associated Press, North Carolina Attorney General Josh Stein said the target is the waiver process.
“As long as the kid is in good academic standing and on track to graduate, that kid should be able to decide for him or herself what's in their best interest, for their personal growth, their happiness, their economic opportunity,” Stein said. “That is absolutely the American Way. And that's a requirement of federal law. The rule offends that requirement.”
The states seek a temporary restraining order against the NCAA from enforcing the transfer rule. Other states involved are Colorado, Illinois, New York, Ohio and Tennessee.
“The NCAA is disappointed in the decision by seven state attorneys general to bring legal action — with the tacit support of a small number of schools — the result of which could potentially mean team rosters changing monthly or weekly," NCAA spokeswoman Saquandra Heath said in a statement.
"The NCAA believes that if a member school objects to a rule or policy, that member should propose alternative rules that apply to everyone, not turn to lawsuits to bypass the system they designed.”
The complaint alleges requiring athletes to sit can mean lost potential earnings from endorsement deals with their name, image and likeness (NIL) or professional careers. It points to exposure from competing in national broadcasts, noting: “One game can take a college athlete from a local fan favorite to a household name.”