U.S. college athletes may soon be considered employees entitled to minimum wage under federal law. In a recent decision, the Third U.S. Circuit Court of Appeals ruled that college athletes could theoretically be considered employees of their schools under the Fair Labor Standards Act (FLSA), but remanded to the District Court for further analysis of the factual record under a different employment test. The District Court’s decision on remand has the potential to yield seismic changes to college athletes’ rights to be paid for their athletic endeavors and the obligations of Higher Education institutions to pay such compensation.
The lawsuit, Johnson, et al. v. National Collegiate Athletic Association, et al., (Johnson v. NCAA), arose in 2019 when a former Villanova football player filed a complaint alleging that players in major-college sports programs are “student employees.” The complaint, later joined by other Division 1 athlete plaintiffs, further alleged that college athletes dedicate an average of 30 or more hours per week to their sports and are entitled to be paid at least the minimum wage for such time. The NCAA moved to dismiss the complaint, arguing that student athletes cannot under any circumstances be employees under the FLSA due to their amateur status. The District Court denied the NCAA’s motion to dismiss and allowed the student athletes’ case to proceed. However, the NCAA and defendant schools sought permission form the District Court to file an interlocutory appeal of the motion to dismiss, asking the Third Circuit to review whether student athletes can be considered employees. On appeal after holding oral arguments, the Third Circuit affirmed the District Court’s decision that student athletes could be employees but remanded the case to the District Court to apply a different test to analyze the relationship between college athletes and their colleges and the NCAA. The Third Circuit directed the District Court to apply the FLSA’s economic realities test, which requires the District Court to answer the following questions:
- Do the athletes in question perform services for the college while playing their sport?
- Do the athletes perform services for the college’s benefit?
- Does the college control or reserve the right to control the athletes while they are performing their sport?
- Do the athletes perform their sport in return for “express” or “implied” compensation or “in-kind benefits”?
If, on remand, the District Court determines that an employer-employee relationship exists, college athletes would be granted the right to be paid for their services, along with broader protections and rights regarding their compensation. Lawyers for the college athletes in Johnson v. NCAA argue that college athletes can be “both students and employees,” similar to how students are employees in work-study programs. However, the NCAA released a statement emphasizing the resources that college athletes are already provided in furtherance of their athletics, including health benefits, scholarships, mental health support, academic counseling, and more. The NCAA expressed that athletes’ opportunities in women’s sports, Olympic sports, and sports at the HBCU and Division II and Division III levels could be negatively impacted if the District Court determines that they are employees because the majority of college athletic programs are already operated at a financial loss to the college without the obligation to pay players for participation.
There is a high likelihood that Johnson v. NCAA could return to the Third Circuit, especially because the Seventh Circuit (Berger v. NCAA, 2016) and Ninth Circuit (Dawson v. NCAA, 2019) rejected claims that college athletes were FLSA employees. The conflict between the circuits is problematic for the NCAA given that it seeks uniform rules across the country for student athletes, and the U.S. Supreme Court could eventually grant certiorari to consider this issue given the circuit split and the thousands of student athletes’ employment status implicated by the outcome.
Labor Status Disputes in Colleges and Congress
The current lawsuit adds to the landscape of other issues the NCAA is facing regarding the status of college athletes. In May 2024, the NCAA reached a multi-billion-dollar settlement granting revenue sharing with college athletes. That same month, the National Labor Relations Board (NLRB) heard a complaint against the NCAA, the University of Southern California, and the Pac-12 Conference for failing to classify student athletes as employees under the National Labor Relations Act (NLRA). Moreover, in February 2024, local Region 01 of the National Labor Relations Board held that Dartmouth College men’s basketball players are school employees under the NLRA. Dartmouth’s men’s basketball players then voted to unionize, but Dartmouth has so far refused to bargain with them and is currently awaiting review of the case by the full Board, which you can read more about here.
The status of employment and college athletes has also gained traction in Congress. The House Committee on Education and the Workforce recently approved a bill that could prevent college athletes from being considered employees of a school, conference, or governing organization. Several other bills have also been filed pertaining to college sports, such as bills governing college athletes’ rights to compensation for their image, name, and likeness.
