Student-Athletes Aren’t Employees

Seismic change in NCAA student-athlete experience avoided

By Allen Smith, J.D. Mar 11, 2016
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They may break a sweat more often than many workers, but student-athletes are not employees for purposes of the Fair Labor Standards Act (FLSA), the U.S. District Court for the Southern District of Indiana has ruled.

Three members of the women’s track team at the University of Pennsylvania sued the National Collegiate Athletic Association (NCAA), alleging that they are employees of the university and seeking at least minimum wage for the work they perform as student-athletes. But the court rejected their argument on Feb. 16. 

Randi Kochman, an attorney with Cole Schotz in Hackensack, N.J., summed up the court’s ruling: “Tradition of amateurism in college sports—without student thought of compensation—and the fact that thousands of amateur athletes have been around college campuses for years and the DOL [Department of Labor] has not taken any steps to apply the FLSA to them.” 

“To the contrary,” the court stated, “the DOL has expressly taken the position that ‘as part of their overall educational program, public or private schools and institutions of higher learning may permit or require students to engage in activities in connection with dramatics, student publications, glee clubs, bands, choirs, debating teams, radio stations, intramural and interscholastic athletics and other similar endeavors. Activities of students in such programs, conducted primarily for the benefit of the participants as part of the educational opportunities provided to the students by the school or institution, are not ‘work’ under the FLSA and do not result in an employee-employer relationship between the student and the school or institution.’ ” 

The determination of whether someone is an “employee” for FLSA purposes involves the flexible application of a broad standard, according to Gary Lieber, an attorney with FordHarrison in Washington, D.C. But student-athletes voluntarily participate in sports deemed to be for their own benefit. 

Northwestern Football Case

Unlike the Northwestern University football players who sought employee status under the National Labor Relations Act in a case before the National Labor Relations Board (NLRB) last year, the members of the Penn track team did not have athletic scholarships. The NLRB declined to exercise its jurisdiction in the Northwestern case, and did not decide whether they were employees.

“It did this because Northwestern was one of only 17 private schools in NCAA Division 1 FBS [Football Bowl Subdivision] football, and the NLRB does not have jurisdiction over the other 108 state-run football teams,” said Joseph Kroeger, an attorney with Snell & Wilmer in Tucson, Ariz. 

Neither case “obtained the desired ruling that student-athletes are ‘employees,’ ” Kroeger said. “If either effort had been successful, it would have fundamentally undermined the concept of amateurism in college sports and caused a seismic change in the NCAA student-athlete experience.”

He said the issue is not going away, though. While student-athletes without scholarships may not resemble employees, “There are a small number of athletes at major schools, primarily men’s basketball and football, that generate billions of dollars in revenue for their schools. It is hard for the average person to consider these individuals to be more students than revenue-generating athletes. As to these individuals, the case for compensating them for their efforts certainly becomes stronger and harder to reconcile with the amateurism concept.”

The two cases “demonstrate the lengths parties will go to to seek coverage by federal labor and employment laws,” said Kevin Cloutier, an attorney with Sheppard Mullin in Chicago. “HR professionals have seen this play out in connection with independent contractors and interns, to name a few.” He added, “HR professionals must be aware of the risks of misclassification of workers.”

This decision is Berger v. NCAA, No. 1:14-cv-1710-WTL-MJD (S.D. Ind. 2016).

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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