|
By: Alexandra C. Hains
College athletics have always been a topic of interest and debate, especially when it comes to the classification of student-athletes as employees. Student-athletes dedicate countless hours to their sports, juggling practice and competition, with demanding academic commitments. In return, they receive scholarships, which cover tuition, room, and board. However, the conversations are changing surrounding the compensation of student-athletes. The question of whether these athletes should be considered employees has sparked legal battles and discussions across the country.
In this series of articles, we will examine the complex legal landscape surrounding student-athlete compensation and discuss the ethical and legal considerations and potential consequences of transforming student-athletes into employees. The first article in this series will paint the current landscape and discuss the pending federal legislation.
The Current Landscape
Historically, the National Collegiate Athletic Association (“NCAA”), the governing body for college athletics, has maintained strict regulations prohibiting student-athletes from receiving compensation beyond their scholarships. These rules were designed with the purpose of preserving the amateurism of college sports and led to harsh punishments and penalties for student-athletes and schools who were found to break these rules. Presently, NCAA rules prohibit student-athletes from receiving compensation beyond scholarships and cost-of-attendance allowances.
However, the NCAA has recently moved towards allowing student-athletes to profit from their name, image, and likeness (“NIL”) rights. In 2021, the NCAA adopted an interim policy that allows student-athletes to earn compensation for their NIL, subject to state laws and school policies, a significant shift in the NCAA’s longstanding position on amateurism.
Legal Challenges
Federal Lawsuits
In recent years, the Seventh and the Ninth Circuits have held that student-athletes are not employees under the Fair Labor Standards Act (“FLSA”). See Berger v. NCAA, 843 F.3d 285 (7th Cir. 2016), (holding that student-athletes were not employees and are not covered by the FLSA); Dawson v. NCAA, 932 F.3d 905 (9th Cir. 2019) (holding a student-athlete in a football program was not an employee of the NCAA or Pac-12 under the FLSA).
Now, the Third Circuit, which covers Pennsylvania, New Jersey, and Delaware, is considering this same question - whether student-athletes are employees for purposes of the FLSA in Johnson, et al v. The National Collegiate Athletic Association, et al. In Johnson, former and current Division I student-athletes are suing the schools they attended, and the NCAA, seeking wages for their participation in Division I athletics under the FLSA and various state laws. The student-athletes are arguing that they are employees subject to the FLSA and should be paid for their time related to athletic activities, in part because of the control the NCAA and the universities held over their activities and the revenue generated by their sports.
The schools and the NCAA filed a motion to dismiss the plaintiffs’ complaint. The District Court denied the motion and held that the student-athletes “plausibly allege[d]” that they were employees. The schools and the NCAA appealed the District Court’s decision, arguing, among other things, that the District Court improperly disregarded the 7th Circuit Court’s ruling in Berger, and improperly analogized student-athletes to student interns. At this stage, the Third Circuit will not directly answer whether student-athletes are employees, but its decision may shed some light on the direction the case will ultimately take. Oral arguments were held on February 15, 2023, and the Third Circuit’s decision is pending.
National Labor Relations Board (“NLRB”)
In 2021, NLRB General Counsel Jennifer Abruzzo issued a memo in which she stated that student-athletes should be classified as employees and gain the statutory rights of employees, including the right to unionize and receive workers' compensation for work-related injuries. Abruzzo argued that colleges control players’ terms and conditions of employment, such as the number of practice and competition hours, scholarship eligibility, limits on compensation, minimum GPA, restrictions on gifts and benefits athletes may accept, and control on various aspects of student-athlete’s daily lives. While this memo is not binding, it clearly lays out the NLRB’s current position regarding student-athletes.
For example, in December 2022, the NLRB filed charges against the NCAA, the Pac-12 Conference, and the University of Southern California, alleging that the student-athletes are employees. The NLRB contends that the organizations have intentionally misclassified these athletes as “non-employee student-athletes” for the purpose of depriving them of their right to union representation to discourage them from speaking out to improve their working conditions. The complaint sets a trial date of November 7, 2023.
Conclusion
The legal landscape surrounding the classification of college student-athletes as employees is complex. Pending federal legislation, NCAA rules, state-level laws, court decisions, and the impact on college athletics all play a role in shaping the discussion and potential outcomes. Colleges and universities must prepare for a potential major change in their athletic departments and would benefit from starting to think through how certain decisions will impact them.
| 
