Workers' Compensation: Student Athlete Employment Status Still A Coin Toss

Tangible benefits produced by "amateur" college athletes to identifiable institutions, ie. NCAA Colleges are held to deserve compensation. The Third Circuit Federal Court of Appeals ruled recently as it analyzed employment status.

Protection Afforded by The FLSA
The issue before the Court was whether the athletes before us are actually owed the protections of the Fair Labor Standards Act (FLSA), but rather, whether college athletes, by nature of their so-called amateur status, are precluded from ever bringing an FLSA claim. Our answer to this question is no."

Defendants
The defendants in the case were the NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, also known as the NCAA, and the Following NCAA Division I Member Schools as Representatives of a Defendant Class of All Private and Semi-Public NCAA Division I Member Schedules; DREXEL UNIVERSITY; LAFAYETTE COLLEGE; VILLANOVA UNIVERSITY; UNIVERSITY OF PENNSYLVANIA; CORNELL UNIVERSITY; SACRED HEART UNIVERSITY; FORDHAM UNIVERSITY; UNIVERSITY OF OREGON; TULANE UNIVERSITY; UNIVERSITY OF ARIZONA; PURDUE UNIVERSITY; DUKE UNIVERSITY; MARIST COLLEGE.

Key Points
The key points regarding whether student-athletes are employees under the Fair Labor Standards Act (FLSA) are:

The court rejected the argument that the tradition of amateurism in college sports automatically precludes student-athletes from being considered employees under the FLSA.
The court held that college athletes may potentially be considered employees under the FLSA if they a) Perform services for another party, b) Do so primarily for the other party's benefit,
c) Are under that party's control or right of control d) Receive express or implied compensation or in-kind benefits.
The court rejected applying tests used for interns or other types of workers, finding the situation of college athletes to be unique.
The court emphasized looking at the "economic realities" of the relationship between athletes and schools/NCAA to determine if it's truly an employee-employer relationship.
The court vacated the lower court's decision and remanded the case, instructing the lower court to apply this new framework to determine if the athletes qualify as employees.
Importantly, the court did not definitively rule that student-athletes are employees. Rather, it established a framework for analyzing the question and left it to the lower court to apply that framework to the case's specific facts.
The decision allows student-athletes to be classified as employees in some circumstances but does not guarantee that outcome.

Holding As To Employment Status

"We therefore hold that college athletes may be employees under the FLSA when they

(a) perform services for another party,

(b) 'necessarily and primarily for the [other party’s] benefit,' Tenn. Coal, 321 U.S. at 598,

(d) in return for 'express' or 'implied' compensation or 'in-kind benefits,' Tony & Susan Alamo Found., 471 U.S. at 301 (quotation omitted).

"If so, the athlete in question may plainly fall within the meaning of 'employee' as defined in 29 U.S.C. § 203(e)(1). Ultimately, the touchstone remains whether the cumulative circumstances of the relationship between the athlete and college or NCAA reveal an economic reality that is that of an employee-employer."

Analysis
In essence, this ruling provides a path for student-athletes to argue they are employees under the FLSA but does not automatically classify them as such. It will depend on each case's specific facts and circumstances when analyzed under the framework laid out by the court.

The case expands the framework for considering the employment status issue regarding workers' compensation. The trend may continue to consider student-athletes as employees and allow them access to workers' compensation benefits.

Ralph Johnson v. The National Collegiate Athletic Association, 22-1223 (3rd Cir. 2024)

Recommended Citation: Gelman, Jon L., Student Athletes Employment Status Still A Coin Toss, www.gelmans.com (07/17/2024)

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ORDER NOW

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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.