3rd Circuit to determine if student athletes are ‘employees’ under FLSA

Since last year’s monumental Supreme Court decision in Alston curtailing the National Collegiate Athletic Association’s (NCAA) ability to limit student athlete compensation, the landscape continues to shift in unprecedented ways. In September 2021, the National Labor Relations Board (NLRB) announced its position that certain student athletes at private institutions should be considered employees for purposes of organizing and other National Labor Relations Act (NLRA) protections. Now, the U.S. 3rd Circuit Court of Appeals will decide whether student athletes can be classified as employees under the Fair Labor Standards Act (FLSA), the federal law mandating minimum wage and overtime compensation.

Amateurs or employees?

In the case pending before the 3rd Circuit, a group of Division 1 student athletes from several states filed a lawsuit in the U.S. District Court in the Eastern District of Pennsylvania alleging that student athletes who engage in interscholastic athletic activity for their schools are “employees” and should be paid minimum wage and overtime for the time spent participating in those activities. The NCAA asked the court to dismiss the lawsuit.

First, the NCAA relied on a “revered tradition of amateurism” in college sports. In sum, it argued that the schools’ history of not paying student athletes is “precisely what makes them amateurs.” The district court rejected this argument, finding it unpersuasive and cyclical to maintain that student athletes are amateurs simply because the schools have established a tradition of not paying them.