NCAA Says SCOTUS Defeat Boosts Brief That Athletes Aren’t Employees

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The NCAA might have lost Alston at the U.S. Supreme Court in a 9-0 shutout, but the organization contends last year’s historic defeat supports its assertion that college athletes aren’t employees.

The argument was raised in the NCAA’s opening brief filed on Tuesday at the U.S. Court of Appeals for the Third Circuit for Johnson v. NCAA. The case centers on a group of current and former college athletes from Villanova, Fordham, Cornell and other colleges who maintain they are employees under the federal Fair Labor Standards Act.

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The FLSA guarantees minimum wage and overtime pay, and the players assert their colleges and the NCAA, as a joint employer, are responsible to pay them hourly wages. The players have noted the peculiarity of work-study classmates being paid to work at the ticket gate and concession stands for games where the NCAA prohibits the athletes from pay.

Last year, U.S. District Judge John Padova rejected NCAA and the colleges’ motions to dismiss Johnson, reasoning, among other points, that Alston deemed restrictions on athlete compensation legally problematic and unnecessary for amateurism. Earlier this year, Padova certified the case for interlocutory appeal, meaning an appeal before a case is decided. Most of the claims in Johnson are now before the Third Circuit.

The NCAA’s brief portrays Johnson as opportunistic litigation that relies on “press reporting sympathetic to their cause.” The brief contends that other federal circuits have rejected the FLSA argument and the Third Circuit should as well.

To that end, the brief notes that in Berger v. NCAA, the Seventh Circuit held college athletes are not employees under the FLSA because their relationship is “too tenuous,” their participation in sports is voluntary, and their play does not constitute “work” as that word is understood in law. The NCAA also points out that in Dawson v. NCAA, the Ninth Circuit found that college athletes, unlike employees, lack an expectation of compensation, and thus can’t be employees of their school, conference or the NCAA.

The brief also highlights the U.S. Department of Labor’s Field Operations Handbook, an internal manual that offers guidance to agency investigators. The handbook opines that “college athletes who participate in activities generally recognized as extracurricular are generally not considered to be employees.”

More provocatively, the brief attempts to turn the NCAA’s defeat in Alston on its head, insisting that the majority opinion authored by Justice Neil Gorsuch reaffirmed the separation of pro and college sports.

First, the brief stresses that the issue at play in Alston was narrow and, the NCAA believes, meaningfully different from issues raised in Johnson. Alston centered on whether the NCAA and its members could, under federal antitrust law, cap schools’ opportunities to defray athletes’ education-related costs and to provide them other education-related benefits. The brief charges that such a question “has no bearing on the application of FLSA,” a different federal law which in Johnson concerns athletics-related benefits.

Second, the brief argues that Gorsuch’s opinion “actually praised the lower courts’ care in crafting a remedy” that would not “blur” the line between pro and college sports. Earlier in the Alston litigation, the players had challenged NCAA rules limiting athletic scholarships to the full cost of attendance and capping athletics-related benefits. Courts rejected those arguments, finding NCAA restraints reasonable under antitrust law.

The district court in Alston, for example, expressed concern that “unlimited, professional-level cash payments, unrelated to education . . . could blur the distinction between college sports and professional sports and thereby negatively affect consumer demand for Division I basketball and FBS football.” Gorsuch noted athletics-related caps “may be price-fixing agreements” but acknowledged that courts had accepted an “anti-professional principle” articulated in NCAA cases.

Third, the brief attempts to marginalize Justice Brett Kavanagh’s much-discussed concurring opinion in Alston. Padova has relied heavily on that opinion, which described NCAA amateurism as illegal “price-fixing labor” that “extinguishes the free market in which individuals can otherwise obtain fair compensation for their work” and that “would be flatly illegal in almost any other industry in America.” The NCAA’s brief stresses that “no other justice joined” Kavanagh in questioning an anti-professional principle.

Paul McDonald and other attorneys for the players will file their own brief and counter arguments raised by the NCAA and schools. They’ll stress that Padova flatly rejected these arguments and instead found that college athletes meet applicable tests for employee recognition.

If the Third Circuit sides with Johnson, there would be a so-called “circuit split” on whether college athletes are FLSA employees. The Third, Seventh and Ninth Circuits would have rendered inconsistent rulings. The NCAA would petition the U.S. Supreme Court to answer which circuit has it right.

Whether the Supreme Court agrees to hear the case, and how long a decision would take, would be unknown for some time, leaving the NCAA, conferences, colleges and athletes in an uncertain space. In a setting where college athletes are FLSA employees in part of the country (the Third Circuit covers Pennsylvania, New Jersey, Delaware and the Virgin Islands) but not others, the NCAA would be hard-pressed to not allow FLSA recognition in all states. Otherwise, college athletes at some colleges would have a superior set of legal rights—they would get paid to play—which would, in turn, supply their colleges with a decisive advantage in recruiting.

Johnson is one of several ongoing legal efforts to have college athletes recognized as employees. The National College Players Association and the College Basketball Players Association have filed unfair labor practices charges in which they argue that college athletes are employees under the National Labor Relations Act.

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