Overview of the case
On February 15th, the U.S. Court of Appeals for the Third Circuit heard oral arguments in Johnson v. NCAA, a potentially ground-breaking lawsuit brought by former Division I athletes against the NCAA and several member institutions, including Villanova, Duke, and the University of Oregon. Through this lawsuit, the former student-athletes argue that the Fair Labor Standards Act (FLSA) requires the NCAA to classify student-athletes as employees, and to pay student-athletes at least the federal minimum wage for their time.
The Student-Athletes’ Take
In the lawsuit, the student-athletes argue that the NCAA’s control of their time, class schedules, majors, and other key aspects of their educational experience is enough for the student-athletes to be classified as employees that are entitled to minimum wage under the FLSA. The student-athletes also argue that it is unfair for the NCAA to rake in billions of dollars of revenue based on the efforts of the unpaid student-athletes.
The NCAA’s Take
In response, the NCAA argues that athletic scholarships are tantamount to compensation given to student-athletes in exchange for their time and services, and that student-athletes compete without the expectation of payment. The NCAA also argues that paying student-athletes would disrupt the NCAA’s model and could lead to major consequences for member institutions, including sport and budget cuts.
The End of the NCAA?
The implications of this decision for the NCAA and its member institutions are massive. If student-athletes are deemed to be employees under the FLSA, the amateurism model that is the bedrock of the NCAA will end, and the operating costs of every athletics department will sky-rocket. While some of the larger, brand-name schools could afford to pay its athletes, many smaller programs already struggle to stay afloat financially. In short, this decision could drive a bigger wedge between the largest and the smallest Division I programs and could lead to the end of the NCAA as we know it.
It's Hard Not to Side with the Student-Athletes
Unfortunately for the NCAA, the court of public opinion favors the student-athletes’ arguments. The time demands on student-athletes are substantial, and institutions and coaches have control over almost every aspect of the student-athlete college experience. Further, it’s no secret that the NCAA brings in billions of dollars of revenue from the efforts of student-athletes. Sure, there are NIL opportunities for some student-athletes, but such compensation only recognizes the marketability of individuals, rather than the work and effort that all student-athletes contribute to the NCAA and its member institutions.
Complicating Factors & Final Thoughts
More than just the payment of the minimum wage is at stake in this case. Consider these factors -- employees under FLSA could unionize and enjoy legal protection from retaliation. Additionally, they could strike and refuse to play. Under FLSA, employees are not capped at minimum wage. What’s to stop D1 schools from offering 5-star recruits massive deals, protected under the FLSA?
At HBC, we strive to promote student-athletes and their interests and believe that a ruling against the NCAA in this case would be a huge step in the right direction. As the NCAA’s amateurism model continues to be publicly scrutinized, it has become harder for the NCAA to defend and justify its practices. Overall, student-athletes have been denied rights and financial rewards for years, all to the benefit of the NCAA.
As the NCAA’s amateurism model continues to take hits from legal challenges like the Johnson case and the proliferation of the NIL marketplace, we believe that a period of monumental change to college sports has just begun.
We will be following this case and the other ongoing changes to the NCAA closely, so stay tuned to https://www.hbcboulder.com/news-media (or https://twitter.com/HBCSportsLaw or https://www.linkedin.com/company/hutchinson-black-and-cook-llc/) for updates.