Minor Questions to Belabor in the NIL Era: The Status of High School Athletes

For years, many have advocated that participation in college athletics is “work” and, consequently, college athletes should be treated as “employees” of the schools they attend under federal and state labor and employment laws. That advocacy has become more full-throated with the ever-increasing commercialization of college sports, especially during the past five years in which college athletes have been allowed to unlock and earn money on their name, image, and likeness (NIL) rights. In full transparency, this author has questioned the push to make student-athletes employees — see here, here, here, and here.

Advocates for employee status of college athletes cite a variety of factors, often in relation to applicable legal tests (e.g., economic realities or control test), including supervision and control by coaches (and conversely the athletes’ lack of control over their own schedules and lives), the benefit to the schools from athletic participation (e.g., ticket and television revenue and more school applicants), and the commercial asphyxiation of amateurism and education. But if that makes college athletes employees, what about high school athletes? All these same factors appear to apply similarly to high school athletes. Yet, we have not heard any government agency or prosecutor proclaim that, by calling their athletes “student-athletes,” high schools are violating labor law (as seen at the collegiate level).

Many will explain this away, arguing that there is so much money in college sports now that the athletes deserve some share of what is generated by their performance. Here again, the same applies to high schools, with games being televised and streamed, and with football powerhouse high schools (i.e., California’s Mater Dei) inking eight-figure marketing/media deals, of which the student-athletes see not a penny. With “Friday Night Lights,” someone is making money on the backs of high school athletes. Yet, we have not seen the Service Employees International Union trying to unionize the Mater Dei football team (as we saw with Dartmouth’s men’s basketball team).

It is unclear how NIL money has altered the push to establish college athletes as employees of their schools, as a matter of law. Many contend that NIL compensation serves as evidence of employee status under certain applicable legal tests. Others might say that employment status is unnecessary, as NIL money is alone enough for college athletes, who are pulling in seven-figure deals. If anything, employment status is more likely to arrive via a collectively bargained pro-style system with pay caps and floors that creates economic certainty for schools in some sports (i.e., football and basketball) beyond the reach of antitrust law and litigation. In the meantime, no one apparently cares that high schools are presumably misclassifying their student-athletes “employees” and, in doing so, are perhaps unwittingly violating labor and employment laws, including child labor laws.

Even if high school athletes are not employees, child labor and other laws are potentially relevant as NIL money is becoming more prevalent in high school and youth sports. It was only four years ago when Quinn Ewers — a 5-star college recruit in Texas — gave up his senior year in high school to go to Ohio State and start earning NIL money, because Texas specifically prohibited NIL activities prior to college enrollment. Fast forward to today, most states allow high school athletes to earn NIL money, with the exception of Alabama, Hawaii, Indiana, Michigan, Mississippi, and Wyoming. Texas remains an outlier, permitting only prospective collegiate athletes to sign NIL agreements with colleges and universities, provided they are 17 years of age or older.

NIL agreements with high school athlete should trigger a panoply of legal considerations for the contracting parties, including the potential applicability of laws protecting minors.

1. NIL Rule Variations. As noted, state laws vary in allowing NIL and, if allowed, may impose certain limitations.
2. High School Association Rules. Within each state, NIL rules are commonly established and governed by state athletic associations (e.g., New Jersey State Interscholastic Athletic Association (NJSIAA); Massachusetts Interscholastic Athletic Association (MIAA)).
   
   For example, in New Jersey (and many other states):
   
   – High school athletes cannot endorse certain “vice” products or services, including alcohol, tobacco, adult entertainment, cannabis, gambling, prescription drugs, controlled substances, and weapons.
   
   – NIL activity cannot be enmeshed with interscholastic athletics, e.g., no using a team jersey or making reference to a school name, logo, or mascot.
3. Child Labor Laws. In NIL agreements, the athlete is generally treated as an independent contractor, not an employee (notwithstanding the misclassification issue addressed above). Even if a minor is properly classified as an independent contractor, promotional activities and services (e.g., appearances, film shoots, or TikTok posts) may still be governed and restricted under applicable child labor laws, which vary from state to state. These laws may limit the hours and timing of the promotional activity and may require a labor certificate or “working papers.”
   
   Some states (e.g., California and New York) have laws that provide additional protections specific to child performers and athletes, which, among other things, require that a percentage of earnings be held in trust until the minor reaches adulthood. While it is often not clear that such laws would apply to high school athletes contracting for their NIL rights rather than athletic performance, California recently expanded its law to apply expressly to minors serving as paid influencers and online content creators, which is often a component of a student-athlete’s contract for NIL activity.
4. NCAA. Prospective college athletes are now required to report to the NCAA’s College Sports Commission any NIL deal paying more than $600 on or after the start of athlete’s junior year of high school.

It seems unlikely that high school athletes will ever be deemed employees of their schools (as there is not now, nor likely will there ever be, a push for it). Nevertheless, the commercialization of high school sports appears to be following in lockstep with college athletics. The advent of high school NIL deals and money, and the “labor” associated with NIL activity, implicate a minefield of state laws and regulations. A failure to navigate that minefield carefully could have serious consequences, including the loss of eligibility for (and/or forfeiture of compensation by) the athlete and potential criminal and administrative penalties for the party contracting with a minor athlete in ways that violate child labor laws.