NCAA Athletes-as-Employees Case Heads to Federal Appeals Court

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As 2022 begins, college athletes’ quest to gain recognition as employees is headed to a federal appeals court. On Dec. 22, Pennsylvania district judge John Padova elevated, for appellate review, this provocative issue in the case Johnson v. NCAA:

Whether NCAA Division I student athletes can be employees of the colleges and universities they attend for purposes of the Fair Labor Standards Act, solely by virtue of their participation in interscholastic athletics.

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Judge Padova accomplished this step by certifying this issue for interlocutory appeal, meaning an appeal of a case before it is decided. Last fall, the judge denied motions by colleges and the NCAA to dismiss Johnson v. NCAA, a trial date for which has not yet been set. Former Villanova football player Ralph “Trey” Johnson and other current and former athletes maintain they are or were employees of their attended colleges. They also insist the NCAA functions as a joint employer by controlling college sports. If the case prevails, both schools and the NCAA could be on the hook to pay college athletes wages.

Judge Padova’s certification allows Villanova, Fordham, Cornell and several other colleges to ask the U.S. Court of Appeals for the Third Circuit to assess his reasoning at the motion to dismiss stage. The answer could eventually pave the way for the U.S. Supreme Court to decide whether college athletes are employees.

The athletes center their case on the Fair Labor Standards Act, a federal law that guarantees minimum wage and overtime pay. They also raise claims under state minimum wage and unjust enrichment laws. The case is distinguishable from the mid-2010s effort by Northwestern football players to gain employee status. The Northwestern players relied on the National Labor Relations Act, a different federal law that is not at issue in Johnson v. NCAA. Likewise, NLRB general counsel Jennifer Abruzzo’s memo last fall, arguing that college athletes are NLRA employees, is outside the scope of FLSA claims.

As Johnson and fellow plaintiffs see it, college athletes should be paid for the time they spend on sports in the same way their classmates are paid for work study—including those who work at the ticket gate and concession stands during games in which athletes aren’t paid. Both athletes and work-study students provide a service to their schools that is separate from their studies, they argue.

The schools and NCAA insist college athletes can’t be employees. College athletes are amateurs and, under NCAA rules, barred from receiving compensation for their labor. The defendants also cite guidance from the U.S. Department of Labor’s Field Operations Handbook, which warns: “college students who participate in activities generally recognized as extracurricular are generally not considered to be employees within the meaning of the [FLSA].” Other federal appeals courts, the defendants further stress, have nixed the players’ FLSA argument. In Berger v. NCAA, the Seventh Circuit deemed the relationship between college athletes and the NCAA “far too tenuous to be considered an employment relationship.” Similarly, in Dawson v. NCAA, the Ninth Circuit stressed the NCAA and conferences “are regulatory bodies,” not employers of college athletes.

Yet, Judge Padova describes the NCAA and its members as propping up circular logic: Classifying college athletes as amateurs, then denying them pay because they are amateurs. The 86-year-old judge, who served in the U.S. Army Reserve JAG Corps during the 1960s, finds it telling that college athletes “schedule classes around their required NCAA athletic activities,” and coaches arguably act more like bosses than professors. Judge Padova also highlights various NCAA rules, including oversight over the recruitment process and setting rules for permissible compensation, which suggest the NCAA behaves akin to an employer.

The Third Circuit could agree with Judge Padova, thereby setting up a conflict between federal appeals courts over whether college athletes are FLSA employees. That wouldn’t end the litigation, as there are remaining issues before Judge Padova. On that front, the judge rejected an interlocutory appeal of his denial of the NCAA’s motion to dismiss. Still, it would forecast an emerging dispute with national implications: Whether the more than 350 D-I schools need to pay wages to approximately 175,000 athletes and, possibly, back pay to hundreds of thousands of former D-I athletes. The U.S. Supreme Court is more inclined to review cases where there are circuit splits and national implications.

Alternatively, the Third Circuit could reverse Judge Padova and hold that college athletes cannot be employees under the FLSA or state laws. Although that wouldn’t end the litigation—the schools didn’t move to dismiss unjust enrichment claims, for instance—it would still greatly advantage the schools and the NCAA.

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