Third Circuit to Review Lower Court Decision Finding That NCAA College Athletes Are Employees Under the FLSA

The long fight for NCAA college athletes to be compensated for their work has heated up in recent years, marked by an unsuccessful Congressional effort to permit student-athletes to organize unions and major win at the Supreme Court allowing them to profit off of their name, image, and likeness.  Wisconsin stand-out Johnny Davis—a projected lottery pick in the upcoming NBA draft—recently took advantage of that victory by appearing in a commercial for Taco Bell.

The next and arguably most significant battle in this fight is the current bid by a Villanova University football player to have college athletes considered “employees” under the FLSA, thereby entitling them to wages and other benefits of employment.  In August 2021, Judge John R. Padova of the U.S. District Court for the Eastern District of Pennsylvania denied a motion to dismiss the claims, ruling that the plaintiff had stated a claim that he and the student athletes he seeks to represent are employees entitled to mandatory compensation.  In allowing the case to proceed, Judge Padova pointed to the U.S. Supreme Court’s ruling in NCAA v. Alston, which opened the door for schools to provide athletes more benefits, such as reimbursements for computers and musical instruments, but stopped short of saying they should be paid wages.

Judge Padova’s decision is now set to be reviewed by the Third Circuit Court of Appeals, in what will prove to be a pivotal ruling regardless of the outcome.  In recent weeks, collegiate organizations have flocked to support the NCAA in its bid to reverse Judge Padova’s order, warning that a finding that student-athletes are employees would go against guidance from U.S. Department of Labor and create circuit split.  Indeed, the Seventh and Ninth Circuits have denied collegiate athletes employee status under the FLSA when presented similar cases.

Those supporting the NCAA’s appeal have also suggested that affirming Judge Padova’s decision could spell the end of intercollegiate athletics.  However, this bold, speculative claim ignores the massive revenue that college sports generates for the NCAA and Division I schools (i.e., the same revenue that has caused college athletes to demand the piece of the pie they deserve).

Either way, the Third Circuit’s decision will be extremely consequential in student-athletes’ bid to be compensated fairly.  It will either reaffirm that classifying college athletes as employees remains a mere pipe dream for the foreseeable future, or create the circuit split the NCAA fears—quite possibly escalating the fight to the U.S. Supreme Court.

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About Alex Hartzband

Alex Hartzband's practice is focused on employment litigation. Alex is a senior associate in the firm's New York office.

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