On February 16, 2016, a federal district court in Indiana held that former athletes at the University of Pennsylvania were not university employees entitled to the protections of the Fair Labor Standards Act (FLSA).  The plaintiffs—former track and field athletes at Penn—brought collective action claims against Penn, the NCAA, and more than 100 other colleges and universities, alleging that student athletes are employees entitled to minimum wage protections under federal wage and hour law.

Focusing on the “economic reality” of the relationship between Penn and the student athletes, the United States District Court for the Southern District of Indiana in Anderson v. NCAA, No. 1:14-cv-01710, concluded that student athletes are not “employees” for FLSA purposes and dismissed the FLSA claims against Penn.  The court noted that generations of students have sought to be part of the “revered tradition” of unpaid college athletics, and that the students view college athletics as primarily benefitting their own educational experience.  The court also pointed out that the U.S. Department of Labor (DOL) has never taken action to apply the FLSA to college athletes, notwithstanding that long tradition.

The court rejected the plaintiffs’ argument that the factors listed in the DOL’s “Intern Fact Sheet” supported a finding of an employment relationship.  The court emphasized that the Intern Fact Sheet applied to interns rather than to student athletes, and noted that courts have refused to defer to the DOL’s factors even in cases specifically involving interns, citing the recent Second Circuit decision in Glatt v. Fox Searchlight Pictures, Inc. (discussed here).

The court also dismissed the claims against the NCAA as the other university defendants for lack of Article III standing, noting that the plaintiffs had failed to establish that they had been injured by any institution other than Penn and failed to plausibly allege a joint employment relationship with any other defendant.