Tuesday, December 6, 2016

7th Circuit: NCAA Student Athletes are Not Employees

Yesterday, the Seventh Circuit held that NCAA student athletes are not employees under the Fair Labor Standards Act (FLSA), and therefore they are not entitled to minimum wage. You can read the opinion in Berger v. NCAA here (.pdf).

The Court's opinion really came down to three main points:
Not official use.

  • The Court decided not to apply the standard multifactor tests for analyzing whether an employment relationship existed because the multifactor test "fail[s] to capture the true nature of the relationship";
  • The Court then noted the "long-standing . . . tradition of amateurism" in college sports; and
  • The Department of Labor "Field Operations Handbook" specifically excludes "extracurricular activities" from its definition of employment, with a cross reference to a mention of "interscholastic athletics."
And that's pretty much it. I don't think I'm oversimplifying the Court's opinion here. 

I do think the Court oversimplified the analysis, and some review of the traditional multifactor test would have been informative. That's not to say that I think they reached the wrong result - to the contrary, I suspect this is the correct outcome - it just felt a little underwhelming. In fairness, the Court was deciding this case at the pleadings stage and therefore had virtually no record on which to base such analysis. 

Endnote: In a concurring opinion, Judge Hamilton notes that the plaintiffs were non-scholarship athletes in a non-revenue-generating sport (UPenn Track and Field). The "economic realities" may result in a different outcome for scholarship athletes in revenue-generating sports. 

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