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Federal District Judge Finds FLSA Does Not Apply to College Athletes

Lucie Riviere and Owen H. Laird, Esq.

On February 16, 2016, U.S. District Judge William T. Lawrence of the Southern District of Indiana held that the Fair Labor Standards Act (“FLSA”), the federal labor law that prohibits employers from paying their employees less than minimum wage, did not cover college athletes.

In Berger v. National Collegiate Athletic Association, the three plaintiffs, members of the University of Pennsylvania (“Penn”) women’s track and field team, alleged that they were entitled to be paid at least the minimum wage for the work they performed as student athletes (e.g. practicing, playing in games, appearing at events, etc.). They argued that, by virtue of being on the team, they were Penn’s employees for purposes of the FLSA because they performed work for their universities for no academic credit, like students participants in work-study program. The plaintiffs sought an order from the Court allowing a collective action with a class of “[a]ll current and former National Collegiate Athletic Association (“NCAA”) Division I student athletes on NCAA women’s and men’s sports rosters for the [Defendant schools] . . . from academic year 2012-13 to the present” against Penn as well as the NCAA and the 123 NCAA Division I Member Schools.

Regarding the plaintiffs’ claims against the NCAA and other NCAA Division I member schools, the District Court disagreed with the plaintiffs’ argument that plaintiffs were NCAA employees. The Court reasoned that because an employment relationship is a necessary condition for an FLSA suit and the NCAA and NCAA members schools did not employ the plaintiffs, they could not have violated the FLSA. Thus, the District Court dismissed the claims against these defendants.

Regarding plaintiffs’ claim against Penn, the plaintiffs argued that the question of whether student athletes were employees under the FLSA was governed by the intern test set forth in a 2010 U.S. Department of Labor (DOL) Fact Sheet. According to the plaintiffs, student athletes are either interns (not covered by the FLSA) or employees (covered by the FSLA), according to the DOL fact sheet. Plaintiffs argued that because application of the DOL factors supported the position that they were not interns, they must be employees. The District Court rejected this argument, stating that “there is not even one set of immutable factors that applies to all interns in all situations, and there is certainly not one test that applies equally to interns and student athletes.”

The District Court then examined the “economic realities” of the relationship between Penn and its athletes in order to determine whether the plaintiffs were employees. Finding against the plaintiffs (and putative class), the court held that employees are only those who, as a matter of economic reality, are dependent upon the business to which they render service. The District Court, referring to the Supreme Court recognition that there exits in this country a “revered tradition of amateurism in college sports,” concluded that “the fact that the Plaintiffs participate in an NCAA athletic team at Penn does not make them employees of Penn for FLSA purposes.” The Court further supported his conclusion that “student athletes are not employees…[by] the fact that the existence of thousands of unpaid college athletes on college campuses each years is not a secret, and yet the Department of Labor has not taken any action to apply the FLSA to them.”

This decision comes six months after the National Labor Relations Board’s decision to dismiss Northwestern University football players’ attempt to unionize. As such, student athletes’ quest to gain employees status seems to have reached a dead end.

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