Johnson v. NCAA: The Next Step in NIL Legislation

Johnson v. NCAA: The Next Step in NIL Legislation

After the Supreme Court’s unanimous decision in NCAA v. Alston, a group of college athletes is now challenging one of the foundational principles of college sports.^[1] As the Third Circuit hears arguments on February 15^th in the case of Johnson v. NCAA, their decision could be substantial in deciding the future of college athletics.

What is at Issue?

The heart of the issue in this case revolves around the Fair Labor Standards Act of 1938, which established a national minimum wage between employees and employers.^[2] The question before the court is “whether NCAA Division I student-athletes can be employees of the colleges and universities they attend for purposes of the Fair Labor Standards Act (“FLSA”), solely by virtue of their participation in interscholastic athletics.”^[3]

The Plaintiffs

The group of plaintiffs is headed by a former Villanova Football player Trey Johnson, along with five other athletes. The plaintiffs argue that they should be paid for the hours they spend in competition and practice.^[4] Comparing themselves to student ticket takers and library workers, they argue their practice hours are rigorously tracked by the NCAA twenty-hour practice rule, requiring them to sign time cards confirming they did not exceed this time limit. ^[5] In other words, because they work while they attend school, they should be paid for it. The plaintiffs are asking the Third Circuit to employ the same multifactor test applied by the district court to determine whether they should be classified as employees. The district court applied the Glatt v. Fox Searchlight primary beneficiary test, which balances seven non-dispositive factors to determine the scope of the relationship.^[6] This framework allowed the district court to weigh the revenue the NCAA receives from student-athletes, along with the degree of control exercised over the entire athletic experience.

They consist of:

1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee-and vice versa.
2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. ^[7]

The plaintiffs believe that the Third Circuit will agree with the findings of the district court if they choose to employ the Glatt Test.

The Defendants

As defendants in this case, the NCAA, are relying on a broader legal argument. They assert that college athletes should remain amateurs because the concept of amateurism is sacred and to change the status would upset hundreds of years of history. ^[8]. They also point to the fact that the Department of Labor does not allow college athletes to be classified as employees. ^[9]In fact, the Department’s Field Operation Handbook explicitly states that “college students who participate in activities generally recognized as extracurricular are generally not considered to be employees within the meaning of the [FLSA].”^[10]. Finally, they point to a few other circuit cases that have rejected the players’ FLSA argument. These include a case from the Seventh Circuit which found that it was “far too tenuous to be considered an employment relationship,”^[11] and a case from the Ninth Circuit which explained that the NCAA is a regulatory body, not an employer.^[12]

Potential Outcomes

If the NCAA were to prevail and the Court determines that college athletes cannot be employees, the case will most likely be dismissed. If the plaintiffs were to win, there would be a circuit split allowing universities in states with more lenient NIL legislation to entice players into attending the school. As the law surrounding NIL becomes clearer, major decisions surrounding the status of student-athletes may force the Supreme Court to step in and potentially change the way college sports has operated for decades.