The NCAA News - News and Features

May 18, 1998

Association to appeal restricted-earnings case

The NCAA Executive Committee has announced that the Association will appeal a judgment of almost $67 million in a case involving the restricted-earnings coaching position.

The NCAA will appeal to the U.S. Court of Appeals for the Tenth Circuit a jury's verdict to award $22.3 million to restricted-earnings coaches in men's basketball, baseball and other sports. The verdict amount is automatically trebled under antitrust law to $66.8 million; the NCAA also is required to pay the plaintiffs' attorneys fees. The Association also may have to pay interest.

"We have made this decision to appeal because we have been advised that in the opinion of our attorneys a number of reversible errors were made by the court during the trial," said Samuel H. Smith, chair of the NCAA Executive Committee and president of Washington State University.

"The court did not permit us to present evidence that would have explained to the jury the underlying rationale for the restricted-earnings legislation. Without that information, the jury could not properly understand the context within which it was asked to assess damages."

Smith said that the NCAA's position throughout the trial was that if the rule did violate the antitrust law, the Association wanted to pay fair compensation to those individuals who were actually harmed. He noted that the NCAA identified 59 individuals whose salaries were affected by the legislation. The plaintiffs asserted that 1,900 individuals were affected.

The restricted-earning coach legislation was adopted by the membership in January 1991 to take effect in August 1992 and was designed to create an entry level or apprenticeship position. Accordingly, a salary cap of $12,000 in the academic year and $4,000 during summers was established that corresponded to salaries paid to graduate assistant coaches.

"The intent of the legislation was to create opportunities for new coaches entering the field," Smith said. "The irony is that the restricted-earnings position was adopted in place of legislation that would have eliminated a coaching position altogether. In fact, the cap was established to assure that these positions would be filled by new coaches entering the field rather than veteran coaches."

A number of schools moved veteran coaches into these entry-level positions. In November 1993, suit was brought against the NCAA by three such coaches in the sport of basketball, claiming violation of federal antitrust laws. Two other suits, one in baseball and one in all other sports, were also filed. The three later were combined, representing all restricted-earnings coaches.

The court found in favor of the plaintiffs in May 1995 on their motion for a summary judgment (without the need for a trial) that the restricted-earnings rule violated the Sherman antitrust law. The NCAA immediately rescinded the rule and appealed the decision to the Tenth Circuit Court of Appeals.

The appeals court sustained the judge's decision in January 1998. The trial on the damages owed began April 6 in Kansas City, Kansas, and concluded with the jury's verdict May 4.

In addition to appealing the jury's verdict to the Tenth Circuit Court of Appeals, the NCAA is considering a review by the U.S. Supreme Court of the Tenth Circuit's January ruling upholding the May 1995 summary judgment decision.