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College Student Athletes are NOT Employees Entitled to Compensation Under the FLSA


Berger v. National Collegiate Athletic Association, et al. - United States District Court, Southern District of Indiana, Indianapolis Division


Facts:  Three plaintiffs brought suit against the National Collegiate Athletic Association ("NCAA") and 123 NCAA school on the grounds that while the plaintiffs were members of the women's track track and field team at the University of Pennsylvania ("Penn"), they were employees of Penn and entitled to compensation.  The plaintiffs asked the Court to certify the case as a class action while the defendants moved to dismiss the claim on the grounds that the plaintiffs lacked a valid Fair Labor Standards Act ("FLSA") claim.

Holding:  The Court noted that in order for plaintiffs to proceed on their claim, the matter hinged on whether the plaintiffs were characterized as "employees" of Penn, under the FLSA.  While the FLSA provides the definition of what constitutes an "employee", the Court pointed out that it must examine the "economic reality" of the working relationship.  

While the plaintiffs had argued that the test set forth in a 2010 United States Department of Labor "fact sheet" should control the issue, the Court disagreed.  The factors included in the "fact sheet" were not designed to apply to student athletes and instead there was on evidence to suggest the "fact sheet" was intended to be applied out of the internship context.  Further, the "fact sheet" was found to not address activities in an educational setting; instead, it addressed programs that take place at facilities of for profit private sector employers.

In this case, the Court noted that the Seventh Circuit's approach to determining who is an employee under the FLSA is flexible.  Traditionally, "generations of Penn students have vied for the opportunity to be part of that revered tradition [participating in college sports] with no thought of any compensation."  The Court held that led to the conclusion that students at Penn who chose to participate in sports as part of their educational experience did so because they viewed it as beneficial to them.  Further, the fact that thousands of unpaid college students participate in sports at colleges across the country and yet the Department of Labor has not taken any action to apply the FLSA to them was found to be persuasive by the Court. 

Judgment:  The District Court held that the FLSA claim brought by plaintiffs should be dismissed on the grounds that the plaintiffs did not qualify as "employees" entitled to compensation while they were college athletes at the University of Pennsylvania.

The Takeaway:  Interesting case as the whole issue over whether collegiate athletes are entitled to compensation continues to be a brewing issue.  Readers might remember several prior articles I have written on employment and labor law issues at the collegiate level, such as the former University of Houston soccer player who filed an FLSA suit or even the Northwestern University football players who attempted to unionize.  I understand the Court's reasoning here and think its analysis of the "fact sheet" not being applicable to student athletes was correct.  

However, I had trouble agreeing with the portion of the opinion that held that since the Department of Labor had not taken any action to apply the FLSA to college students who participate in sports, that was evidence that the college students were not "employees" entitled to FLSA protections.  That sounds a lot like using a negative to prove a positive.  Something can certainly be said for the fact that if this was a real issue, the Department of Labor likely would have stepped in by this point.  However, I do not think the fact that nothing had been done on the matter (yet), should have been a controlling factor.  Granted, the Court noted that no single factor was necessarily controlling and instead, it was more of a flexible analysis.  I think that was a good "out" to allow the Court room to use a myriad of factors to rely upon in support of its decision to dismiss the claim...without tying itself to one single factor.

As well, note this is one Court's ruling.  Something tells me this is not the last we have heard of the issue...  

Majority Opinion Judge:  Judge Lawrence

Date:  February 16, 2016

Opinion:  https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwjSxv7T7Z_LAhWC6SYKHR7cBwkQFggoMAI&url=https%3A%2F%2Fecf.insd.uscourts.gov%2Fcgi-bin%2Fshow_public_doc%3F12014cv1710-238&usg=AFQjCNEuTTudQ_DkWSNiUs_tgpwIYXm7Mg&sig2=cp_3fFfBCDXzPgHRHvUzKQ&bvm=bv.115339255,d.eWE

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