Student-athletes as employees? A potential game-changer for college athletics
November 10, 2023
Types : Alerts
November Author: Kristen E. Mericle
Editors: Ashley R. Lynam and Kacie E. Kergides
College sports are “overdue for change.” NCAA President Charlie Baker made the call for change in his opening statement at the 10th hearing on Capitol Hill concerning college sports since 2020. While Baker has been advocating for a federal law regulating Name Image Likeness (“NIL”) compensation, another fight for change in the status of college athletes is concurrently taking place in the courtroom.
The ever-changing landscape of college athletics raises many issues and questions for universities and colleges regarding the implications of various anti-discrimination laws.
In the case currently before the Third Circuit, Johnson, et al. v. The National Collegiate Athletic Association, et al., Case No. 22-01223 (3d Cir. 2022), a group of Division I student-athletes, led by former Villanova University defensive back Ralph “Trey” Johnson, are asking the Court to determine whether Division I student-athletes should be considered employees under the Fair Labor Standards Act (“FLSA”) for the purposes of receiving wages.
The plaintiffs in Johnson sued the NCAA and 25 Division I schools in 2019, alleging that they should be classified as employees and thus are entitled to minimum wage and overtime pay under the FLSA.
The plaintiffs survived motions to dismiss filed by the NCAA and the defendant schools. Judge Padova of the Eastern District of Pennsylvania determined that, among other things, the plaintiffs, for purposes of the FLSA, plausibly alleged an employment relationship between themselves and their schools as well as the NCAA.
The Third Circuit granted leave to hear this matter as an interlocutory appeal, and a panel of judges heard an oral argument in February 2023. Presently before the Court is whether Judge Padova applied the appropriate standard when it denied the NCAA’s and schools’ motions to dismiss. However, the panel’s decision, which is expected at some point later this year, may have far-reaching effects, which the NCAA’s counsel cautioned as “a minefield of unforeseen consequences.”
While previous cases that were similar in nature to Johnson have been struck down, post-NCAA v. Alston, the “tradition of amateurism” has been called into question, which may have opened the door to student-athletes’ claims proceeding further than before.
Potential impacts of a ruling in favor of the plaintiffs
Ultimately, a ruling in the plaintiffs’ favor would require colleges and universities to pay student-athletes minimum wage and overtime pay.
This raises the question of how pay would be distributed to the athletes as well as how resources would be allocated to different programs. Many have signaled that increased payroll costs would result in the reduction in rosters for many sports teams or the cutting of certain sports programs entirely and, consequently, would lead to further inequalities that already exist in college athletics.
Additionally, if student-athletes are classified as employees, they would be able to bring discrimination claims under various statutes, including Title VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and the Equal Pay Act of 1963.
There are many unanswered questions concerning the interplay between this classification under the FLSA and Title IX, as well as other anti-discrimination laws. Title IX, which prohibits discrimination on the basis of sex in educational programs and activities, would extend to ensuring equity in pay between male and female athletes.
That said, a wave of litigation can be anticipated should the plaintiffs prevail.
While a ruling in the plaintiffs’ favor would not bind other federal circuit courts, there is potential for this question to make its way up to the Supreme Court as the tradition of amateurism in college athletics continues to be challenged.
Employment status of college athletes takes center stage at the Senate hearing
At the 10th hearing on Capitol Hill concerning college sports since 2020, NCAA President Charlie Baker urged federal lawmakers to recognize the importance of athletes maintaining their status as students and not employees. Baker opened with the following remarks at the October 17 hearing: “[t]o enable enhanced benefits while protecting programs from one-size-fits-all actions in the courts, we support codifying current regulatory guidance into law by granting student-athletes special status that would affirm they are not employees[.]”
The NCAA’s recent reforms, including funds for the completion of degrees for up to 10 years, scholarship protections, and long-term health insurance, demonstrate efforts to modernize the NCAA while maintaining the spirit of amateurism.
Baker cautioned that athletic programs at Division II and III schools may cease to exist without congressional action. He added that athlete representatives from all three divisions in the NCAA have signaled that they do not want to be classified as employees.
Big Ten Commissioner Tony Petitti appeared before the Senate Judiciary Committee alongside Baker and several others. Petitti signaled the Conference’s support for a bill that would “codify benefits for student-athletes … without the need to classify student-athletes as employees.” Time is of the essence for the NCAA’s longstanding plea to Congress to pass a law to protect student-athletes’ status as amateurs before athlete employment status is decided by the courts or the National Labor Relations Board.
Colleges and universities must pay close attention to these developments to ensure compliance with federal and state laws as well as address the practical implications as the college athletics landscape continues to change.
If you have any questions regarding this ongoing matter, your current requirements and obligations under federal and state law, or your policies and procedures, Ashley R. Lynam, Kacie E. Kergides, or Kristen E. Mericle of Montgomery McCracken’s Higher Education group are available for assistance.