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Student Athletes Are Not Employees Under the FLSA: Seventh Circuit
Practical Law Legal Update w-004-8980 (Approx. 5 pages)
Student Athletes Are Not Employees Under the FLSA: Seventh Circuit
by Practical Law Labor & Employment
| Law stated as of 12 Dec 2016 • USA (National/Federal) |
In Berger v. Nat'l Collegiate Athletic Ass'n, the US Court of Appeals for the Seventh Circuit held that student athletes are not employees under the Fair Labor Standards Act (FLSA).
On December 5, 2016, in Berger v. Nat'l Collegiate Athletic Ass'n, the US Court of Appeals for the Seventh Circuit affirmed the district court's decision holding that student athletes are not employees covered by the FLSA ( (7th Cir. Dec. 5, 2016)).
Background
Two former students who participated in track and field for the University of Pennsylvania (Penn) sued the school, the National Collegiate Athletic Association (NCAA), and more than 120 other NCAA member schools, alleging that defendants violated the FLSA by not paying their student athletes minimum wage. The district court held that the plaintiffs lacked standing against all defendants except Penn and that student athletes are not employees covered by the FLSA.
Outcome
The Seventh Circuit affirmed the district court's decision that:
- Student athletes not employees protected by the FLSA.
- The plaintiffs lacked standing to sue the NCAA or any schools other than Penn.
Concerning the issue of standing, the Seventh Circuit found that:
- The student athletes' connection with the NCAA and the schools that they did not attend was too tenuous to be considered an employment relationship.
- The plaintiffs did not allege an injury traceable to or redressable by any defendants other than Penn.
Concerning the issue of whether student athletes were covered under the FLSA, the Seventh Circuit noted that:
- Employee status under the FLSA depends on the totality of circumstances, so courts must examine the economic realities of the working relationship between the alleged employee and employer (see Vanskike v. Peters, 974 F.2d 806, 808 (7th Cir. 1992)).
- It has rejected the strict application of multi-factor tests developed by circuit courts, like the one the Second Circuit used in Glatt, in favor of a more flexible standard (Vanskike, 974 F.2d at 809; Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528, 536–37 (2d Cir. 2015); see also Legal Update, New Primary Beneficiary Test for Unpaid Intern Status: Second Circuit).
- Glatt did not take into account the "revered tradition of amateurism" in college sports or the realities of student-athlete experience.
- A majority of courts addressing the issue in contexts such as workers' compensation and unemployment have determined student athletes are not employees (see for example, Rensing v. Ind. State Univ. Bd. of Trustees, 444 N.E.2d 1170 (Ind. 1983); State Comp. Ins. Fund v. Indus. Comm'n, 314 P.2d 288 (Colo. 1957)).
- Two older cases cited by the plaintiffs are distinguishable because they involved student athletes who were separately employed by the university (see Univ. of Denver v. Nemeth, 257 P.2d 423 (Colo. 1953); Van Horn v. Indus. Accident Comm'n, 33 Cal. Rptr. 169 (Cal. Dist. Ct. App. 1963)).
- The DOL, in its Field Operations Handbook (FOH), takes the position that student athletes are not employees and distinguished:
- work-study students from student athletes (DOH § 10b24b); and
- work from extracurricular activities (DOH § 10b24a).
- Student participation in college athletics is completely voluntary.
The Seventh Circuit:
- Found that the plaintiffs did not allege that their athletic activities qualified as work sufficient to trigger the FLSA's minimum wage protections.
- Rejected the plaintiffs' argument that employment status is a fact-intensive inquiry unsuitable for a motion to dismiss. The Court explained that its conclusion was reached as a matter of law and no additional facts or discovery would have changed the outcome.
The concurring judge cautioned that if student athletes were involved in high-revenue sports such as Division I men's basketball or football, the "tradition of amateurism" relied on here may not be as clear.
Practical Implications
In Berger, the Seventh Circuit joined a majority of courts concluding, in various contexts, that student athletes are not employees. Notably, the student athletes in this case were not separately employed by their universities, such as in work-study programs.