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The 3rd Circuit Court of Appeals left open the question of whether college athletes are or could be considered employees under the Fair Labor Standards Act and sent Johnson v. NCAA back to the Eastern District of Pennsylvania. Despite the belief by some that the NCAA proposed settlement in House v. NCAA will be the end of the NCAA’s legal woes, the potential for college athletes to attain employment status through the court still looms.
Johnson v. NCAA was initially filed in 2019 by a group of then-current and former college athletes led by Villanova Football player Trey Johnson. The plaintiff athletes allege that they are employees of their institutions and the NCAA jointly. Therefore, the defendants violated the Fair Labor Standards Act by not paying them at least minimum wage. The NCAA filed a motion to dismiss the case, using their familiar arguments regarding the traditions of amateurism. As has been the trend for most federal courts over the past few years, the Eastern District of Pennsylvania wasn’t buying it. They denied the NCAA’s motion, the NCAA appealed, and the 3rd Circuit largely upheld the lower court’s decision.
This is far from a full win on the merits of the case for the Johnson plaintiffs. It does not mean all college athletes are employees, nor does it even mean the plaintiffs in this case are employees under the FLSA. However, it does mean that the NCAA will have to, once again, try to defend amateurism in federal court—a task which they are finding increasingly difficult to complete successfully.
This is not the first time the question of whether college athletes are or could be employees under the FLSA has reached the Federal Circuit Courts. In 2016, the 7th Circuit affirmed a District court’s decision to dismiss an FLSA claim brought by UPenn (University of Pennsylvania) women’s track and field athletes. Notably, UPenn is in the Ivy league which does not award athletic scholarships to any athletes regardless of sport. In their opinion in Berger vs. NCAA, the 7th Circuit relied, at least in part, on the “revered tradition of amateurism in college sports” and cited an infamous 1984 Supreme Court Case, NCAA vs. Board of Regents.
In 2019, former USC football player Lamar Dawson filed a similar suit alleging Fair Labor Standards Act violations. However, the suit puzzlingly named only the PAC-12 (R.I.P.) and the NCAA as defendants, leaving USC out of the complaint. In Dawson vs. NCAA, the 9th Circuit affirmed the lower court’s decision to dismiss the case, agreeing that the plaintiff was not an employee of the defendants. The court explicitly declined to state that college athletes could not be employees under FLSA, stating that the “pure question of employment… is left, if at all, for another day.”
The 3rd Circuit’s recent decision in the Johnson case departs from the reasoning and rulings in the 7th and 9th Circuit cases, setting up a clear Circuit split, a frequent reason for the Supreme Court to grant certiorari. Johnson may eventually end up before the Supreme Court, but some significant caveats in the Dawson and Berger cases could render this “Circuit split” a little less interesting to the highest court in the land. The college sports landscape (and the legal landscape surrounding it) has changed considerably since decisions were rendered in Berger in Dawson and now more closely aligns with the 3rd Circuit’s decision.
The “revered tradition of amateurism in college sports” has received significantly less reverence of late, particularly since the Alston case was decided in 2021 with a blistering concurrence from Kavanaugh that called into question the legality of almost all of the NCAA’s amateurism rules and business practices. In the present case, the 3rd Circuit went as far as to call it a “frayed tradition of amateurism,” which may sound like a mild criticism, but this is about as close to a “sick burn” as judges typically get. The Berger case also had a concurring opinion that openly questioned whether their ruling should apply to scholarship athletes in revenue-producing sports (the Berger plaintiffs were non-scholarship track and field athletes). The Dawson decision was explicitly narrow, and the Berger decision was criticized as being too broad.
There have also been significant developments in the athlete-employee question as it pertains to the National Labor Relations Act and college athletes’ potential ability to form labor unions. In 2021, NLRB general counsel Jennifer Abruzzo issued a memo announcing her opinion that some college athletes are statutory employees. A few years later, the NLRB filed a complaint against USC, the Pac-12 (again, R.I.P.), and the NCAA. Early this year, the NLRB determined that Dartmouth Men’s Basketball players, who are also non-scholarship athletes, are employees of Dartmouth and eligible to form a labor union. While the NLRA and FLSA are different laws and enforced by different agencies, the common law employment tests for both laws are similar.
Regarding the arguments in the present case (Johnson), they are headed back to the Eastern District of Pennsylvania with instructions to apply a specific common law test to determine whether the plaintiff athletes are employees. Per the 3rd Circuit, a college athlete may be an employee under FLSA if they perform services for another party, primarily for the other party’s benefit, under that party’s control, and in return for express or implied compensation. Similar (if not identical) factors were analyzed in favor of employment status in the Dartmouth case. Regardless of who the District court sides with on the merits, their decision will almost certainly be appealed, once again, to the 3rd Circuit. It would be an understatement to say this ruling showed their hand on how they may rule on an appeal of the case’s merits.
