Third Circuit Holds that Student Athletes Can Be Employees If Their “Play is Also Work”
Nobody knows who was the first to say it, but most people understand that “play is a child’s work.” Yesterday, the United States Third Circuit Court of Appeals ruled that if play is a student’s “work,” student-athletes can be considered employees for purposes of the Fair Labor Standards Act. It did not determine whether the student plaintiffs in the case were employees, though two judges gave pretty clear indications that they think so. The three-judge panel instead remanded the case to the lower court for that determination. The NCAA sought a ruling that students who play were not employees as a matter of law. Here is the Court’s ultimate holding:
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, (c) under that party’s control or right of control, id., and (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.
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In sum, for the purposes of the FLSA, we will not use a “frayed tradition” of amateurism with such dubious history to define the economic reality of athletes’ relationships to their schools. Berger, 843 F.3d at 294 (Hamilton, J., concurring). Instead, we believe that the amateurism that Judge Hamilton calls into question in his “note of caution” highlights the need for an economic realities framework that distinguishes college athletes who “play” their sports for predominantly recreational or noncommercial reasons from those whose play crosses the legal line into work protected by the FLSA. Id. (“I am less confident, however, that our reasoning should extend to students who receive athletic scholarships to participate in so- called revenue sports like Division I men’s basketball and FBS football.”). Accordingly, we also hold that college athletes cannot be barred as a matter of law from asserting FLSA claims simply by virtue of a “revered tradition of amateurism” in D-I athletics. Board of Regents, 468 U.S. at 120.
The Court’s early discussion of the history of intercollegiate competition and the huge amounts of revenue derived by just about everybody except students leaves a pretty clear impression of how at least two judges would rule on application of the Court’s test. Indeed, the Court’s historical recitation suggests that student-athletes were originally treated as employees and that it was only after intercollegiate competition began generating billions in revenue that the NCAA affirmatively asserted that student-athletes were not employees. The Court did not rule on the ultimate question. Instead, it sent the case back to the lower court for that determination.
Judge Porter concurred in the theoretical possibility that student-athletes can be employees under the Fair Labor Standards Act, but wrote separately to emphasize that it is certainly not a foregone conclusion. In what I thought was a well reasoned probing discussion, Porter emphasized the distinction between work and play, noting that the inquiry is an “intensely factual” one:
The FLSA applies only to “employees” who perform “work” for an “employer.” Walling v. Portland Terminal Co., 330 U.S. 148, 150–51 (1947). So an obvious starting point is to ask whether a student-athlete may play her chosen sport because she wants to play, not to work primarily for her university’s benefit. Play is arguably a basic human good that many pursue for its own sake. It is not work, even though it may involve sustained, regulated, physical, or intellectual exertion and combine with other goals such as competition, teamwork, fitness, or personal glory.
If a student-athlete participating in an NCAA- sponsored sport—fencing, water polo, rifle, track and field, golf, beach volleyball, or skiing, for example—is engaged in play rather than work, then none of the commonly used tests will be useful because the FLSA simply does not apply.
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In Walling, the Court explained that the FLSA does not cover a person who, “without promise or expectation of compensation, but solely for his personal purpose or pleasure, work[s] in activities carried on by other persons either for their pleasure or profit.” 330 U.S. at 152. The Department of Labor makes the same distinction. See United States Dep’t of Labor Wage and Hour Division, Field Operations Handbook §10b03(e) (activity of college students participating in interscholastic athletics primarily for their own benefit as part of the educational opportunities provided to the students by the school is not “work”).
darryll k. jones