The Legal Implications of the House v. NCAA Settlement for Women's Collegiate Sports Programs

On June 6, 2025, the U.S. District Court for the Northern District of California granted final approval to the House v. NCAA settlement, marking a foundational shift in the governance and economic structure of college athletics.^[i] The settlement allows schools to directly compensate student-athletes through a revenue-sharing model tied to institutional athletic revenues, fundamentally reshaping the longstanding amateurism model. It also provides for the distribution of $2.576 billion in damages to current and former Division I athletes and eliminates NCAA-imposed scholarship limits across all sports. While the agreement stops short of explicitly classifying athletes as employees, it raises substantial legal questions regarding the application of federal labor law, the future scope of Title IX protections, and the financial sustainability of non-revenue sports programs, particularly those within women's athletics.

Employment Classification and the Erosion of Amateurism

Courts apply multi-factor tests to determine whether a worker qualifies as an employee. Two predominant frameworks guide this analysis: the common law agency test, which focuses on the degree of control an entity exercises over the manner and means of the work performed;^[i] and the economic realities test under the Fair Labor Standards Act (FLSA), which examines the worker’s economic dependence on the entity.^[ii] These standards are fact-intensive and flexible, and courts routinely look at the totality of the circumstances rather than relying on any single factor.

These tests are increasingly relevant in the context of college athletics. Administrative agencies have begun scrutinizing whether student-athletes, particularly those participating in revenue-generating sports, satisfy the criteria for employee classification. The National Labor Relations Board (NLRB), in particular, has taken a clear stance. In Memorandum GC 21-08, issued on September 29, 2021, the NLRB’s General Counsel Jennifer Abruzzo concluded that certain college athletes qualify as employees under Section 2(3) of the NLRA.^[iii] Specifically, she stated that “players at academic institutions,” including “FBS football players at private colleges and universities, and other similarly situated players,” perform services for compensation and are thus statutory employees.^[iv] The memorandum emphasized that the term “student-athlete” is a misclassification that “has been used to deprive those individuals of workplace protections,” and that such misclassification “has a chilling effect on Section 7 activity.”^[v] Abruzzo further warned that “inappropriate” use of the term “student-athlete,” when used to deter collective activity, “could itself be a violation of the Act.”^[vi] The memorandum identified three central indicators of employee status: athletes generate economic value for their institutions, receive forms of compensation such as scholarships and stipends, and are subject to significant institutional control, all factors aligning with traditional employment relationships.^[vii]

These legal frameworks and agency positions have become especially salient in the wake of the House settlement. Under the settlement, Power Five universities may allocate up to 22% of their average annual athletic revenue, estimated to start at approximately $20 million per school annually, as direct compensation to student-athletes.^[viii] This marks a significant departure from the traditional model of amateurism, which limited compensation to scholarships and education-related aid. Though the new compensation model is structured to avoid categorizing payments as “salaries,” the direct, revenue-based nature of the payments and their performance-linked structure strongly resemble characteristics of employment. When analyzed under both the common law and FLSA tests, the House settlement terms further blur the line between student and employee. These developments place college athletics more squarely within the domain of labor and employment law, raising the likelihood that courts and agencies will revisit long-standing assumptions about amateurism and athlete classification.

Title IX and the Unsettled Question of Gender Equity in a Post-Amateur Era

One of the most pressing legal uncertainties post-House is how Title IX will apply to a college athletics system increasingly grounded in compensation and market-based dynamics. Title IX prohibits sex-based discrimination in any educational program receiving federal funding and has served as a cornerstone for promoting gender equity in athletics, particularly through requirements concerning participation, scholarships, and equitable treatment.^[ix]

However, Title IX's protections are traditionally grounded in the educational relationship between student-athletes and institutions, not in employer-employee dynamics. If athletes are formally reclassified as employees, it is unclear whether Title IX would still govern compensation practices, or if institutions would instead be subject to statutes such as Title VII of the Civil Rights Act or the Equal Pay Act. These statutes apply different standards, offer distinct remedies, and focus on workplace discrimination rather than educational opportunity.

Even within the existing Title IX framework, the House settlement introduces practical challenges. Although it eliminates scholarship limits and theoretically preserves equal access, it allows for unequal pay structures through school-controlled “Pools” based on athletic revenue.^[x] Institutions are not required to distribute compensation evenly across sports or genders. As a result, male athletes in football and basketball, whose programs generate the bulk of athletic revenue, are likely to receive disproportionately high compensation, while athletes in non-revenue sports, including many women’s programs, may receive minimal or no compensation.^[xi]

While such compensation disparities may not necessarily constitute a Title IX violation, they risk undermining the statute’s broader objective of promoting gender equity in educational programs and activities. In the absence of clear federal guidance, institutions may continue to rely on formal compliance frameworks, such as the “substantial proportionality” prong of the NCAA and Office of Civil Rights (OCR) three-part test, which evaluates whether athletic participation opportunities reflect student enrollment demographics.^[xii] However, that prong and the broader three-part test focuses solely on participation numbers, not on athlete compensation. As a result, disparities in financial compensation for athletes can persist entirely outside the scope of current Title IX enforcement mechanisms.

Financial Restructuring and Risk Exposure for Non-Revenue Sports

The House settlement imposes new and significant financial pressures on college athletic departments. Universities will now face multimillion-dollar annual compensation obligations in addition to existing NIL-related commitments and the potential for collective bargaining. As institutions attempt to balance their budgets, non-revenue sports, many of which are women’s programs, may face the risk of reduction or elimination.

Historically, high-revenue sports like football and men’s basketball have subsidized broader athletic offerings.^[xiii] However, under the settlement, these sports will now absorb substantial new expenses in the form of direct compensation, reducing their capacity to support other programs. The elimination of scholarship caps may help some athletes, but it could also be used as a budget-cutting tool, allowing schools to shrink teams while maintaining numerical Title IX compliance.

Some universities have already signaled a potential reduction in investment for sports with limited commercial value, citing compliance costs and anticipated liabilities tied to the settlement.^[xiv] For example, the University of Texas at El Paso (UTEP) recently eliminated its women’s tennis program.^[xv] Meanwhile, Cal Poly discontinued its men’s and women’s swimming and diving teams in early March 2025, citing “financial realities,”^[xvi] including significant impacts from the NCAA House Settlement.^[xvii] Cal Poly President Jeffrey Armstrong stated that “the rapidly evolving and changing NCAA Division I landscape… presents many challenges and uncertainties,” underscoring why the programs were deemed unsustainable.^[xviii] These institutional responses risk triggering litigation over whether program eliminations have a disparate impact on women, potentially violating Title IX’s broader principles, even if technical compliance is maintained.

Charting a Path Forward

The finalized House settlement underscores the urgent need for regulatory and legislative guidance. Federal agencies such as the Department of Education and Department of Labor may need to clarify how Title IX should apply to hybrid student-athlete employment models and what standards will govern compensation structures moving forward. In particular, new rules may be needed to ensure that gender equity is not undermined by the shift to market-based athletic compensation.

Congress may also consider enacting new legislation to define uniform standards for athlete compensation, protect the status of non-revenue sports, and provide a framework for balancing labor rights with educational equity. Absent such intervention, the legal landscape will likely evolve through piecemeal litigation, an outcome that risks deepening institutional uncertainty and generating inconsistent outcomes across jurisdictions.

The House v. NCAA settlement marks a pivotal turning point in the governance of college sports. As athlete compensation becomes institutionalized and more closely resembles employment, the legal system will be forced to grapple with the resulting tensions between amateurism and professionalism, labor rights and educational values, and commercial viability and gender equity. Ensuring that the gains of the Title IX era are not eroded in this transformed landscape will require proactive legal, policy, and institutional engagement.