NCAA Rule Intended to Protect Student-Athletes does Opposite, Court Says

An NCAA rule intended to protect student-athletes does the opposite, a court says.

When Major League Baseball holds its annual amateur draft June 9 and 10, hundreds of teenage boys will be forced to decide between signing a contract or postponing their dreams of becoming a professional ballplayer in order to attend college.

For those who have already decided to bypass college and play professionally, the next step is to sit down with team officials, and with the help of an agent or attorney, negotiate a contract. However, for those athletes who are unsure of their next step, the process is more difficult. Under NCAA rules, student-athletes are not allowed to have an agent or lawyer present during any contract discussions with a professional organization. Therefore, the athlete and his parents, who probably have no experience with contracts, must negotiate this first important contract without any help.

While NCAA rules clearly place these athletes at a disadvantage, the Common Pleas Court of Erie County, Ohio, in Oliver v. National Collegiate Athletic Association [Case No. 2008-CV-0762] was asked if the rule also violates state public policy.

In February 2006, Andrew Oliver, a senior at Vermilion (Ohio) High School, hired Robert and Tim Baratta of Icon Sports Group as sports advisors and attorneys. That June, the Minnesota Twins drafted Oliver in the 17th round of the MLB draft and, later that summer, representatives of the Twins met with Oliver, his father and Tim Baratta at the Oliver home. At the meeting, the Twins offered Oliver a contract for $390,000, but on the advice of his father, Oliver rejected the offer and chose to attend Oklahoma State University on a full scholarship.

Although Oliver didn't realize it at the time, Baratta's mere presence in the room violated NCAA Bylaw 12.3.2.1, even though he was not involved in any of the conversations between Oliver and the Twins' representative. Bylaw 12.3.2.1 ("Presence of a Lawyer at Negotiations") states:

In March 2008, Oliver terminated his relationship with the Barattas and Icon Sports. Icon Sports, in return, sent Oliver an invoice for $113,750 for legal services. Believing that the Barattas and Icon Sports had provided nothing of value to him, Oliver hired Attorney Michael Quiat to assist him in the matter.

Upon hearing from Oliver's new attorney, the Barattas and Icon Sports sent a letter to the NCAA reporting Oliver's violation of NCAA rules. Upon receiving the letter, the NCAA investigated the allegation, and having found that Oliver violated Bylaw 12.3.2.1, indefinitely suspended him from playing baseball for OSU. The NCAA eventually reduced Oliver's suspension to 70 percent of the 2009 baseball season.

In an effort to regain his eligibility, Oliver went to court requesting an injunction against the NCAA. Oliver argued that Bylaw 12.3.2.1 was unenforceable because the right to retain legal counsel is subject to the exclusive regulation of the Ohio Supreme Court. Therefore, Oliver argued, any rule that prevents a lawyer from competently representing his client must be a violation of public policy. In addition, Oliver argued that Bylaw 12.3.2.1 was arbitrary and capricious because it does not impact a player's amateur status, but instead limits the player's ability to effectively negotiate a contract.

In defense, the NCAA argued that as a voluntary association, it has the right to manage its affairs and apply its bylaws, within legal limits, without interference from the court. As long as the policies and procedures are within legal limits and not based on fraud, arbitrariness or collusion, no court, the NCAA argued, has the right to reverse them.

In examining Bylaw 12.3.2.1, the Common Pleas Court of Erie County acknowledged that private organizations usually have the right to manage their affairs and apply their rules without interference from the courts. However, the court held that just because member institutions agree to a rule or bylaw does not mean that a court cannot overturn it, especially if the bylaw violates public policy or is arbitrary and capricious.

The NCAA argued that its bylaws are designed to retain a clear line of demarcation between collegiate and professional sports. As Bylaw 12.3.1.2 ("Benefits from Prospective Agents," or the so-called "no agent rule") states, "an individual shall be ineligible for participation in an intercollegiate sport if he or she ever agreed (orally or in writing) to be represented by an agent for the purpose of marketing his or her athletic ability or reputation in that sport." However, the court noted, the NCAA has carved out an exception to the no-agent rule by allowing a student-athlete to retain legal counsel, although Bylaw 12.3.2.1 attempts to limit what an attorney can do for the student-athlete.

NCAA rules not only allow student-athletes to hire and consult with an attorney, they permit student-athletes and their parents to negotiate professional contracts with sports organizations and their representatives. Yet, if student-athletes and their parents were to allow an attorney to negotiate the contract for them, or even have an attorney present in the room, it would (the NCAA argued) in some way blur the line of demarcation between what is amateurism and what is professionalism.

In ruling that NCAA Bylaw 12.3.2.1 failed to preserve this line of demarcation, the court noted that the limitations placed on attorneys in such circumstances were akin to a doctor being prohibited from being present when the doctor's patient meets with a surgeon, with the rationale being that the conference could improve the patient's decision-making power. Therefore, the court ruled Bylaw 12.3.2.1 is unreliable (capricious) and illogical (arbitrary) and violates public policy by preventing attorneys from doing what they are trained and retained to do. An attorney's duty, the court held, is to represent his or her client competently. No entity, other than the one designated by the state, including the NCAA and its member institutions, can dictate to an attorney where, what, how or when he should represent his or her client.

In addition, the court held that it was very clear that the rule was impossible to enforce - and, as a result, it was being enforced selectively. Finally, the court also noted that as an unintended consequence, the rule allowed for exploitation of the student-athlete "by professional and commercial enterprises," in contravention of the positive intentions of the NCAA.

The NCAA has stated that it intends to appeal the court's decision in Oliver; if upheld, the case could have far-reaching implications. It is reasonable to assume, given the Ohio court's emphasis on the state's sole right to grant power to attorneys, that NCAA rules prohibiting student-athletes from seeking attorney/agent representation are in violation of the public policies of all 50 states.

If the NCAA and its member institutions are really concerned about protecting high school and college student-athletes, they should take this opportunity to revisit all such rules. As the court stated, by not allowing student-athletes the opportunity to have proper legal representation, the current bylaws create an atmosphere fraught with ethical dilemmas and pitfalls, and therefore do not serve their intended purpose.