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Lamar Dawson v. Ncaa

Court of Appeals for the Ninth Circuit
932 F.3d 905 (2019)
ELI5:

Rule of Law:

Under the Fair Labor Standards Act (FLSA) and California labor law, student-athletes are not employees of the NCAA or its athletic conferences because the economic reality of the relationship is regulatory, not one of employment.


Facts:

  • Lamar Dawson was a football player for the University of Southern California (USC).
  • USC is a Division I member of the National Collegiate Athletic Association (NCAA) and belongs to the PAC-12 Conference.
  • The NCAA, an association of over 1,100 member institutions, promulgates rules governing its members' athletic programs.
  • NCAA bylaws regulate academic eligibility, recruitment, practice schedules, and financial aid for student-athletes.
  • The bylaws specifically prohibit student-athletes from receiving compensation beyond the value of their cost of attendance.
  • While Dawson received financial aid in the form of a scholarship, the funds were provided by USC, not by the NCAA or the PAC-12.
  • The NCAA and PAC-12 did not have the authority to recruit, select, supervise, or remove Dawson from the USC football team.

Procedural Posture:

  • Lamar Dawson filed a putative class action lawsuit against the NCAA and the PAC-12 Conference in the U.S. District Court for the Northern District of California.
  • The complaint alleged that the defendants violated the Fair Labor Standards Act (FLSA) and California labor laws by failing to pay student-athletes minimum wage and overtime.
  • The NCAA and PAC-12 filed a motion to dismiss the complaint for failure to state a claim upon which relief can be granted.
  • The district court granted the defendants' motion and dismissed the complaint without leave to amend.
  • Lamar Dawson, as Plaintiff-Appellant, appealed the district court's dismissal to the United States Court of Appeals for the Ninth Circuit.

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Issue:

Does the relationship between Division I football players and the NCAA and PAC-12 Conference constitute an employment relationship under the Fair Labor Standards Act (FLSA) and California labor law, entitling the players to minimum wage and overtime pay?


Opinions:

Majority - Chief Judge Thomas

No. The relationship between Division I football players and the NCAA and PAC-12 does not constitute an employment relationship under the FLSA or California labor law. To determine employment status under the FLSA, courts apply the 'economic reality' test, which considers the totality of the circumstances. Here, the court found no employment relationship because: 1) There was no expectation of compensation from the NCAA or PAC-12, as Dawson's scholarship was provided by his university, not the governing bodies; 2) The NCAA and PAC-12 lacked the power to hire or fire players, a key indicator of employer control; and 3) The NCAA's amateurism rules, which predate the FLSA's enactment, were not conceived to evade labor laws. The court also held that the substantial revenue generated by college sports does not, on its own, convert the relationship into one of employment. Regarding the California law claims, the court concluded that legislative history and judicial precedent demonstrate a clear intent to exclude student-athletes from the definition of 'employee' for purposes of imposing financial liability on educational institutions or their governing bodies.



Analysis:

This decision reinforces the legal status of the NCAA and its conferences as regulatory bodies rather than employers of student-athletes. It creates a significant hurdle for future FLSA claims by student-athletes against these governing organizations, forcing plaintiffs to focus on their direct relationship with their universities—an issue this court explicitly declined to address. The court's reliance on the 'economic reality' test and its distinction between a regulator and an employer provides a clear analytical framework for lower courts. This ruling helps insulate the NCAA and conferences from wage-and-hour liability, thereby preserving the current amateurism-based model of college athletics for the time being.

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