US Update: Division I Athletes Can Proceed with Wage Claim

The United States Supreme Court recently reshaped the relationship between universities and the athletes who play college sports in National Collegiate Athletic Association v. Alston et al. In the Alston case, the Court upheld a trial court injunction against NCAA rules that limit the education-related benefits schools may offer student athletes. Notably, the Court did not consider the lower court’s rulings that upheld NCAA limits on noneducational benefits and compensation that student athletes may receive. Regardless, in a unanimous opinion, the Court noted deep skepticism about the “amateur label” of college sports as argued by the NCAA and ruled that the NCAA’s rules restricting education-related benefits violate federal antitrust laws. In a concurring opinion, Justice Kavanaugh specifically noted that the argument “that colleges may decline to pay student athletes because the defining feature of college sports … is that the student athletes are not paid … is circular and unpersuasive.”

Citing the Supreme Court’s rejection of the “revered tradition of amateurism in college sports” and Justice Kavanaugh’s concurring opinion, the Eastern District of Pennsylvania recently ruled in Ralph “Trey” Johnson, et al. individually and on behalf of all persons similarly situated v. NCAA et al. that several NCAA Division I colleges and universities cannot escape a proposed collective and class action by student athletes claiming they should be considered employees and paid a minimum wage. The Eastern District Court rejected the long-standing tradition of amateurism in NCAA interscholastic athletics and ruled the alleged employment relationship between the student athletes and their colleges/universities can be determined by using the Glatt test, a multifactor test used to analyze the economic reality of the relationship. The Glatt test used by the Second Circuit considered the broad question of under what circumstances an unpaid intern must be deemed an “employee” under the FLSA and therefore compensated for their work. The proper question under the test is “whether the intern or the employer is the primary beneficiary of the relationship.” Considering the seven factors of the beneficiary test described in Glatt, the Eastern District Court held, “[b]alancing all of these factors … we conclude that the Complaint plausibly alleges Plaintiffs are employees” and denied the Motion to Dismiss the Complaint in its entirety.

The suit names Pennsylvania and New York colleges and universities, including Penn State, Temple University, University of Pittsburgh, Villanova, Colgate, Cornell, Fordham and Syracuse.

By Nancy Conrad, White and Williams, US, a Transatlantic Law International Affiliated Firm. 

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