Ralph Johnson v. The National Collegiate Athletic Association
Not available in text (2024)
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Rule of Law:
College athletes are not categorically precluded from being considered 'employees' under the Fair Labor Standards Act (FLSA) by virtue of their 'amateur' status. Their employment status must be determined by analyzing the economic reality of the relationship through a test grounded in common-law agency principles.
Facts:
- Plaintiffs are current and former athletes who participated in NCAA Division I intercollegiate sports.
- The NCAA, an association of approximately 1,100 schools, regulates intercollegiate athletics and generates billions of dollars in revenue, primarily from multi-year broadcasting contracts for athletic competitions.
- The NCAA distributes a portion of this revenue to its member institutions, which also generate their own revenue from athletic programs.
- NCAA bylaws historically have forbidden member schools from paying athletes wages for their participation in sports, defining them as amateurs.
- To enforce these rules, the NCAA prescribes sanctions for violating schools and athletes, including suspensions and disqualification from competitions.
- Plaintiff Ralph Trey Johnson, a football player at Villanova University, was allegedly required to spend weekdays from 5:45 AM to 11:30 AM on athletics-related activities.
- The plaintiffs allege that these extensive time commitments interfere with their academic pursuits, often preventing them from enrolling in necessary courses for their preferred majors.
Procedural Posture:
- Ralph Trey Johnson and other student-athletes (Plaintiffs) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania against the NCAA and several member schools (Defendants).
- The complaint alleged violations of the Fair Labor Standards Act (FLSA) and various state wage laws for failure to pay minimum wage.
- Defendants filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that student-athletes are not 'employees' as a matter of law.
- The District Court denied the Defendants' motion to dismiss, finding that the athletes had plausibly alleged an employment relationship under the test from Glatt v. Fox Searchlight Pictures.
- The District Court then granted the Defendants' motion to certify an interlocutory appeal on the controlling question of law.
- The NCAA and member schools (Appellants) appealed the District Court's order to the U.S. Court of Appeals for the Third Circuit.
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Issue:
Does participation in interscholastic athletics as a 'student-athlete' categorically preclude an individual from being considered an 'employee' under the Fair Labor Standards Act (FLSA)?
Opinions:
Majority - Restrepo, J.
No. Participation in interscholastic athletics as a 'student-athlete' does not categorically preclude an individual from being considered an 'employee' under the Fair Labor Standards Act. The court held that the NCAA's reliance on the 'revered tradition of amateurism' is a circular and unpersuasive defense that has been undermined by the Supreme Court's decision in NCAA v. Alston. The court rejected the district court's application of the Glatt test (used for interns) as ill-suited for the unique circumstances of college athletes. Instead, it established a new test based on common-law agency principles to determine employment status. This test assesses whether athletes: (a) perform services for their school, (b) primarily for the school's benefit, (c) under the school's control or right of control, and (d) in return for express or implied compensation, which can include 'in-kind benefits' such as athletic scholarships.
Concurring - Porter, J.
No. While it is factually possible for a Division I athlete to be an employee under the FLSA, the majority's reasoning and newly created test are flawed, and the court should not have accepted this fact-intensive interlocutory appeal. This concurrence argues that determining employee status is an overwhelmingly factual inquiry unsuitable for interlocutory review, especially given the vast differences between athletes, sports, and institutions. The opinion criticizes the majority's extensive historical and sociological survey as inappropriate at the motion-to-dismiss stage. It contends that the longstanding 'economic reality' test, not a new framework borrowed from NLRA cases, should apply and that the majority's test fails to adequately distinguish between 'play' and 'work' or account for the economic differences between revenue and non-revenue sports.
Analysis:
This landmark decision creates a circuit split with the Seventh Circuit's ruling in Berger v. NCAA and is the first U.S. Court of Appeals ruling to hold that student-athletes may be considered employees under the FLSA. By rejecting the 'amateurism' defense and establishing a new analytical framework, the court opens the door for widespread litigation that could fundamentally reshape the financial structure of college sports. The ruling increases the legal pressure on the NCAA and its member institutions to provide direct compensation to athletes, particularly in revenue-generating sports, and makes a future review by the Supreme Court more likely to resolve the conflicting circuit court opinions.
