By: Kyle Kennedy
Earlier this month, the NCAA asked the 3rd Circuit to block a federal lawsuit brought against them by multiple former student-athletes spearheading a legal effort to have student-athletes treated as paid employees by their schools. This effort would essentially require schools to compensate their student-athletes as employees and subject the schools to labor regulations. Judge Theodore McKee, one sitting member of the 3rd Circuit panel hearing the motion, indicated that student-athletes could be considered employees under the Fair Labor Standards Act (FLSA). The FLSA covers individual employees whose work regularly involves them in interstate commerce, including travel to other states to do their jobs. The NCAA limits teams from practicing more than 20 hours per week, but student-athletes reported spending between 35 and 40 hours per week on their sport. Student-athletes travel interstate for competitions and essentially work on their sport full-time in addition to their classes and other responsibilities, which tends to point towards employee status. In September of 2021, the National Labor Relations Board released a memo through their general counsel Jennifer Abruzzo which stated that college athletes should be treated as employees of the school.
In 2021, the NCAA generated $1.15 billion dollars in revenue, with $850 million coming from the rights to televise March Madness. Despite their overloaded schedules, a 2019 study by the National College Players associated reported that 85% of college athletes living on campus and 86% living off campus live below the federal poverty line. Most college athletes do not receive full scholarships; the average award for a Division I athlete was $18,013 for males and $18,722 for females. For Division II athletes those averages dropped to $6,588 for males and $8,054 for females, and Division III schools are prohibited from offering athletic scholarships. While the NCAA has recently approved a policy allowing athletes to be compensated for their name, image, and likeness, these profits have mostly been directed to high-profile athletes in profit-bearing sports who already are likely receiving large or full ride scholarships.
The lawyers for the athletes are not seeking a large reward or to cut a chunk from the pie of NCAA profits. Instead, they are simply seeking to have athletes paid at a reasonable hourly wage like students who work in the libraries or dorms as a part of work-study programs. The NCAA in arguing for dismissal stated that paying college athletes is a slippery slope, that it may lead to schools cutting less profitable sports, and that qualifying the student-athletes as paid employees could expose their scholarships to taxation. There is certainly some truth to these concerns, as Judge McKee of the 3rd circuit offered that the court may take the stance that some athletes, such as “the quarterback at the SEC school,” would be considered employees while other athletes are not.
This could create huge complications among college athletic departments because football and men’s basketball are often the main sources of revenue for smaller school’s entire athletics budgets. These schools could essentially be forced to eliminate all or many of their smaller sports to be able to afford to pay the athletes that fall under the FLSA. It’s also unclear how this dichotomy of employee and non-employee athletes would interact with other NCAA regulations such as Title IX, which promotes equality in sports by requiring equalized investment. If sports like football and basketball were to be excluded from the calculation because the athletes are employees, this would lead to a huge loss in gender equity in sports because schools would be able to pour money into their men’s basketball, football, and other profit-bearing programs without spreading the funding among women’s teams and less profitable sports.
For many student-athletes, especially those in smaller sports, college athletics is not just about a scholarship or advancing an athletic career. Most athletes in these sports are competing for far less than full scholarship and choose to pursue their sport because of their passion. While it’s important to acknowledge that athletes in profit-bearing sports have traditionally been taken advantage of by the NCAA under the guise of amateurism, the recent changes to NCAA policy to allow name, image, and likeness deals allow high-profile athletes to reap the value of their market worth. If a pay-for-play structure truly threatens the existence of these smaller sports at the college level, then perhaps the newly minted name, image, and likeness policy of the NCAA will have to serve as a placeholder for the compensation of athletes, or at least those with market value. Additionally, the formal consideration of student-athletes as employees of their schools under the FLSA raises a host of unanswered questions requiring a massive overhaul of current individual school policies and practices. Regardless of one’s opinion on the way the case should turn out, college athletics departments and legal scholars alike will be carefully tracking this case and its possible future implications.