Wait – College Football Players Really Are Suing for Pay?
By Fiona Ong - Shawe Rosental LLP
September 22, 2023
In my blog post last week, It’s Football (Unionizing) Season…, I tackled the topic of whether football players who receive athletic scholarships to play for a private college or university might be considered employees – and then have the right to unionize under the National Labor Relations Act. As I explained, the National Labor Relations Board seems to be moving the ball towards a finding that those who receive scholarships are thus being paid to provide sports services to the school, meaning that they are employees. But, as my partner Mark Swerdlin noted in a previous blog post, this approach means that non-scholarship players are penalized because they are not being paid and therefore cannot be employees. Unless, as he suggested (with tongue firmly in cheek), they sue for unpaid wages under the Fair Labor Standards Act…
Well, in a real game-changer, it appears that a group of former college athletes are doing just that. On behalf of all college athletes, they are suing the NCAA and over 125 NCAA Division 1 schools for unpaid wages under the FLSA and state wage payment laws. (A whole new meaning for “pay to play”, I guess).
Student-athletes are required to participate in Countable Athletically Related Activities (CARA) that are recorded on timesheets, Required Athletically Related Activities (like community service and fundraising), as well as numerous non-CARA activities – like meals, physical rehab, dressing, showering (yes, please!) and travel, as well as additional workouts and consultation with coaches. According to the plaintiffs, participation in the mandatory CARA and non-CARA activities, which can take up to 40 hours a week, prevents them from taking certain classes or opting for certain majors.
The plaintiffs also argue that the D1 schools exercise significant control over them. They are supervised by coaches and training staff, and their conduct is governed by handbooks. They can also be disciplined – including suspension and dismissal from a team – for misconduct. And they are restricted from certain activities, including the legal use of alcohol and nicotine products.
The plaintiffs point out that the NCAA and the schools benefit from these activities, to the tune of billions of dollars. Yet, the NCAA prohibits schools from paying wages to student-athletes. And they want to be paid.
At this point, the NCAA and schools have asked the federal district court to dismiss the case on the grounds that student-athletes are not employees within the meaning of the law. As the court noted in its ruling, the FLSA defines “employee” (rather vaguely) as “any individual employed by an employer.” But what does that really mean?
The U.S. Court of Appeals for the Third Circuit, like many sister Circuits, look to the “economic realities of the relationship.” In applying this test, the federal district court rejected the “circular” argument by the NCAA and the schools that the “longstanding tradition of amateurism” under which students were not paid establishes an economic reality that students should not be paid – particularly given recent Supreme Court that questioned such a position. It further rejected the argument that the U.S. Department of Labor has issued guidance that student-athletes are not employees under the FLSA, for the technical reason the the NCAA and schools did not yet establish that they had, in fact, relied on the DOL guidance. And it found that, in the Complaint, the Plaintiffs made sufficient factual allegations that they are employees under a multi-factor test for employee status to survive a motion to dismiss. (Whether those allegations can be ultimately proven is a whole different ball game).
The NCAA and schools have appealed this ruling to the Third Circuit, which held a hearing on February 25 of this year. The Third Circuit has not yet issued a decision. But we’re certainly waiting to see which side will score!