Trump Executive Order Directs Labor Boards to Clarify College Athlete Employee Status Amid Evolving Sports Norms

President Donald Trump has directed federal labor authorities to determine whether college athletes should be classified as employees of their universities, signing an executive order on July 25, 2025, that aims to establish national standards amid evolving norms in collegiate sports. The order mandates that the U.S. Department of Labor and the National Labor Relations Board (NLRB) issue guidance or rules to clarify the legal status of athletes, emphasizing the need to “maximize the educational benefits and opportunities” of collegiate athletics. However, the directive does not specify how this classification should be resolved, leaving the controversial issue open for further debate [1].

The move follows a landscape of rapid change in college sports, driven by legal challenges and shifting NCAA policies. In July 2021, the NCAA permitted athletes to monetize their name, image, and likeness (NIL) through endorsement deals, a shift accelerated by a Supreme Court ruling that struck down NCAA restrictions on education-related benefits. Since then, schools have begun offering athletes up to $20.5 million in compensation per year, with a $2.8 billion House settlement further expanding athletes’ rights to transfer and earn income. These developments have destabilized the traditional amateurism model, creating a “bidding war for the best players” and prompting calls for federal oversight [1].

Trump’s order frames the issue as a matter of preserving the educational and developmental role of college sports, rejecting the notion that collegiate athletics should resemble professional leagues. The executive action criticizes the current system as “out-of-control” and warns that without regulatory guardrails, many college sports programs could collapse. It also highlights concerns about equity, urging the preservation and expansion of opportunities for non-revenue sports—those outside football and basketball—and addressing potential Title IX compliance challenges arising from unlimited scholarship policies [1].

The NCAA and major college conferences have long opposed classifying athletes as employees, arguing that universities are educational institutions, not employers. Yet some coaches, such as Purdue’s Barry Odom, acknowledge the need for government intervention: “We’ve gotten to the point where government is involved… We’ll get it all worked out,” he stated. NCAA President Charlie Baker and major conferences have called for federal legislation to establish uniform NIL standards, though existing congressional bills addressing college sports reform have stalled [1].

Legally, the issue is complex. If athletes are deemed employees, universities would face obligations related to wages, benefits, and workers’ compensation—a prospect institutions and conferences have signaled they would contest in court. Public universities, governed by state labor laws, face additional challenges, particularly in Southern states with “right to work” laws that limit unionization efforts. Private institutions, meanwhile, fall under the NLRB, which has historically been reluctant to classify athletes as employees [1].

Trump’s order also tasks the Department of Justice and Federal Trade Commission with protecting athletes’ rights through litigation, a stance that could influence ongoing lawsuits challenging NCAA rules. Additionally, it mandates collaboration with the U.S. Olympic and Paralympic Committee to safeguard the pipeline of collegiate athletes to the Olympics, as schools increasingly allocate revenue to top-tier programs in football and basketball [1].

The executive action underscores a broader struggle to balance the commercialization of college sports with its educational mission. While Trump’s focus remains on regulatory clarity and oversight, the NCAA and its member schools continue to advocate for federal legislation to unify state-level NIL laws and prevent further legal fragmentation. As the debate unfolds, the classification of athletes as employees—or not—will shape the future of collegiate athletics, influencing everything from compensation models to labor rights and institutional accountability.

Source: [1] [Are college athletes employees of their schools? Trump signs executive order asking labor authorities to figure it out] [https://fortune.com/2025/07/25/are-college-athletes-employees-trump-executive-order-ncaa/]