Reigniting the Debate Over Student Athletes as
Lawsuits filed by former and current student
athletes at UCLA, Penn and Northwestern keep alive the question of whether
college student athletes are entitled to employee rights.
This article was published in the December 22, 2016, issue
The 2017 College Football Bowl season has kicked off.
For the next few weeks, television sets across America will be treated to games
all over the nation’s map beginning with the Air Force Reserve Celebration Bowl
in Atlanta’s Georgia Dome and concluding with the College Football National
Championship on January 9 in Raymond James Stadium in Tampa. In
between those two games, 39 other games will be played featuring some of the best
student athletes from every which corner of the United States. These battles for
college football supremacy will be brought to your living room by a variety of
TV networks, with the bulk of the coverage coming from the ESPN family of
However, the battle on the gridiron is not the only
intriguing struggle that college student athletes are currently engaged in. The
legal battle in the courtroom involving various groups of
student athletes has continued to capture headlines in the employment law world.
Over the last year, groups of student athletes have spearheaded a number of
different legal efforts to be recognized as employees of their academic
Employee, student athlete, intern: Why is the label so
The answer to that is simple. An employee receives
certain protections and entitlements under the Fair Labor Standards Act of 1938
and other stateequivalent statutes. For instance, if student athletes receive
recognition as employees, they would be entitled to be paid at least the minimum
wage and compensated at the overtime rate for hours worked over 40 in a
workweek. Multiply the number of student athletes by the number of universities
across the United States by the number of hours spent practicing, preparing and
competing … and you get an idea of why the National Collegiate Athletic
Association (NCAA) has paid attention to these recent claims with the same
meticulous detail that Joe Lunardi displays every week with his latest edition
of college basketball bracketology.
The FLSA is not the only federal statute that would
become applicable to student athletes if they were to be declared employees. The
protections afforded to both employers and employees under the National Labor
Relations Act would also become available. As employees, student athletes would
have the right to form unions, engage in collective bargaining and challenge
University policies — such as permissible use of social media policies — that
arguably curtail NLRA rights.
Recent legal challenges have included lawsuits brought
under antitrust laws, the FLSA, as well as the NLRA.
O’Bannon, et al., v. NCAA
Ed O’Bannon is a folk hero around Westwood, the home of
the UCLA Bruins. In 1995, O’Bannon, along with his younger brother, Charles, and
other players like Tyus Edney and J.R. Henderson etched their way into Bruins
folklore by leading the Bruins to their first — and last — NCAA basketball championship since the John Wooden era.
Following a nine-year NBA career that ended in 2004,
O’Bannon became the lead plaintiff in a lawsuit against the NCAA, alleging
that he was entitled to compensation from the NCAA because the NCAA used his
name, image and/or likeness in various materials. The primary crux of the
lawsuit was to challenge the set of NCAA rules that bar student athletes from
receiving a share of the revenue that the NCAA and its member schools earn from
the sale of licenses to use the student athletes’ names, images and likenesses
in video games, live game telecasts and other footage. The O’Bannon
plaintiffs argued that these rules violated the Sherman Antitrust Act, which
regulates competition in the marketplace.
A federal judge agreed. O’Bannon’s legal team initially achieved a favorable
ruling on August 8, 2014, when the Honorable Claudia Wilken of the U.S. District
Court for the Northern District of California issued a decision finding “that
the challenged NCAA rules unreasonably restrain trade in the market for certain
educational and athletic opportunities offered by NCAA Division I schools.”
Judge Wilken’s injunction against the NCAA did the following:
It prohibited the NCAA from setting rules
prohibiting its members school from giving student athletes scholarships up
to the full cost of attendance at their respective schools.
It prohibited the NCAA from setting rules
prohibiting its member schools from offering their student athletes a “limited
share of the revenues generated from the use of their names, images and
likenesses.” This “limited share” allowed schools to give up to $5,000 per year
in deferred compensation, to be held in trust for student athletes until after
they leave school.
However, the matter was appealed up to the Ninth
Circuit, which issued a ruling on September 30, 2015, affirming in part, and
reversing, in part, Judge Wilken’s decision. The Ninth Circuit panel agreed with
the district court decision that some of “the NCAA’s rules had significant
anticompetitive effects within the college education market, in that they fixed
an aspect of the ‘price’ that recruits pay to attend college.” As a result, the
Ninth Circuit decision affirmed the first portion of the injunction which
allowed schools to give student athletes scholarships up to the full cost of
attendance at their respective schools. However, the Ninth Circuit reversed the
second part of Judge Wilken’s injunction that allowed member schools to pay
student athletes up to $5,000 per year in deferred compensation.
Both the NCAA and the O’Bannon plaintiffs petitioned the
U.S. Supreme Court. Both were denied as the Supreme Court declared in early
October 2016 that it would not review the case.
The case, although in essence a dispute over antitrust
law, brought to the national limelight the growing debate about whether college
student athletes who are engaged in sports as part of their educational
experience at an academic institution, should be compensated for their labors
that produce high profits, visibility and other benefits for their schools. Most
notably, the O’Bannon cases started the legal discussion regarding the NCAA’s
notion of “amateurism.”
The University of Pennsylvania Case
Gillian Berger and two other former University of
Pennsylvania track and field athletes brought a lawsuit against the NCAA in 2013
seeking a Declaration from the District Court that they were employees within
the meaning of the FLSA. The plaintiffs based their argument on a 2010 U.S.
Department of Labor fact sheet put out by the DOL to help determine whether
interns are employees within the act. The plaintiffs argued that all of the
factors which tend to establish an unpaid internship on the fact sheet are
glaringly absent in the case of student athletes, and therefore, their athletic
endeavors performed for the financial benefit of their universities were done
neither as interns, nor student athletes, but as employees.
District Court Judge William T. Lawrence of the U.S.
District Court for the Southern District of Indiana granted the NCAA’s motion to dismiss. Per Judge
Lawrence, the “FLSA defines ‘employee’ in a circular fashion, as ‘any individual
employed by an employer.’ 'Employ,’ in turn, is defined by the act as ‘to suffer
or permit to work.’” Because the FLSA’s definitions are of little to no help,
courts routinely examine the “economic realities” of the relationship reviewing
several different factors in order to determine whether an individual is an
employee under the Act. Even though the plaintiffs argued the factors listed
on the intern fact sheet established their standing as employees, Judge Lawrence
explained “there is not 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.” Instead, the court determined a flexible support
considering the totality of the circumstances that should be used.
Unfortunately for the plaintiffs, the circumstances
indicated that they were not employees. Judge Lawrence supported his “finding
that student athletes are not employees … [by] the fact that the existence of
thousands of unpaid college athletes on college campuses each year is not a
secret, and yet the Department of Labor has not taken any action to apply the
FLSA to them.”
Displaying the same determination that propelled them to
victory on the track and field, the plaintiffs appealed the decision to the
Seventh Circuit. However, the NCAA recently scored another victory from a
threejudge Seventh Circuit panel in a December 5, 2016, decision. The Seventh
Circuit agreed with the district court that “because status as an ‘employee’ for
purposes of the FLSA depends on the totality of circumstances rather than on any
technical label, courts must examine the ‘economic reality’ of the working
relationship between the alleged employee and the alleged employer.” The Seventh
Circuit acknowledged that student athletes spend a tremendous amount of time
practicing, presenting and playing for their respective schools, but, in its
view, “student athletic ‘play’ is not ‘work,’ at least as the term is used in
Following the decision by the threejudge panel, the
plaintiffs petitioned the Seventh Circuit for a review en banc.
The Seventh Circuit case is Gillian Berger et al. v.
NCAA et al., case number 161558.
The Northwestern University Case
While the former student athletes in the University of
Pennsylvania case sought recognition as employees under the FLSA, the case
involving current student athletes at Northwestern University implicated the
NLRA. As explained above, the NLRA guarantees the right to organize and join
labor unions. The right, however, applies only to employees employed by private
sector employers. As a result, a group of Northwestern student athletes
seeking to unionize filed a petition in early 2014 with the Chicago regional
office of the National Labor Relations Board.
And the NLRB regional director sided with the
student athletes, delivering a rare victory in this debate for student athletes.
The regional director’s opinion concluded that based on the totality of
circumstances — including the amount of time the student athletes were required
to spend practicing for and participating in games vis a vis the amount of time
the student athletes spent as students — that the student athletes are more
employees than students. Further, because Northwestern is a private university,
those players have a right to seek union representation.
However, the victory was short lived. The university
appealed the regional director’s decision to the NLRB, which punted on the issue
by dismissing the matter on jurisdictional (the NLRB concluded that it “would
not effectuate the purposes” of the NLRA to assert jurisdiction) rather than
The NLRB decision didn’t completely shut the door on the
players, explaining the board would consider a reexamination of the issue “if
the circumstances of Northwestern’s players or football bowl subdivision (FBS)
football change such that the underpinnings of [the] conclusions regarding
jurisdiction warrant reassessment.” This statement, coupled with the fact that
the NLRB never addressed the merits of the argument may have made the university
somewhat nervous, because the university made certain revisions to its “Football
Handbook,” including changes to the handbook’s social media policy.
Specifically, the handbook’s policy was revised from a broader policy barring
athletes from social media posts that “could embarrass you, your family, your
team … or Northwestern University” to specifically prohibiting the athletes from
making posts that “contain full or partial nudity, sex, racial or sexual
epithets, underage drinking, drugs, weapons, or firearms, hazing, harassment. or
Why does this matter? Excellent question. The reason is
because the NLRA protects employee’s rights to engage in concerted activities
for their mutual aid and protection and in doing so, prohibits employers from
adopting policies that would chill these rights. It is well established that
such “concerted activities” involve social media posts and communication through
various social media platforms. Thus, even though Northwestern appeared to have
been momentarily saved from dealing with student athlete unionization, it wasn’t
taking any chances that the NLRB may someday change its mind and grant it’s
student athletes NLRA protections.
Northwestern’s actions must have caught the attention of
someone at the NLRB, because the NLRB’s Office of the General Counsel recently
admonished the university in an advice memorandum that it’s social media
policy, prior to the recent modification, violated the NLRA. However, the NLRB
declined “to issue a complaint in this case because the employer, although still
maintaining that athletic scholarship football players are not employees under
the NLRA, modified the rules to bring them into compliance with the NLRA and
sent the scholarship football players a notice of the corrections, which sets
forth the rights of employees under the NLRA.”
The NLRB memorandum appears to have temporarily
reignited the debate over whether student athletes are “employees” under the
 The class of plaintiffs included a
group of current and former FBS Football and Division I basketball
 For instance, NCAA video games are
annually purchased by consumers which feature players on college teams with
images that closely resemble their real-life counterparts.
 The DOL recently addressed the need to
apply an economic realities test to determine whether a worker is an independent
contractor or an employee. I covered this topic
 The advice memorandum was issued on Oct. 11, 2016.