Berger v. National Collegiate Athletic Association, No. 14-cv-1710 (7th Cir. Dec. 5, 2016)

Colleges and universities, at least in the jurisdiction of the Seventh Circuit Court of Appeals, surely breathed a collective sigh of relief earlier this month when the Court held that student athletes were not employees under the Fair Labor Standards Act (“FLSA”) and thus were not entitled to minimum wage.

Former student athletes at the University of Pennsylvania sued Penn, the National Collegiate Athletic Association (“NCAA”) and over 120 other colleges and universities that have Division I (the division that covers the largest schools) athletic programs, arguing that student athletes were employees entitled to the minimum wage. Interestingly, the court declined to use any of the multi-factor tests to resolve the issue because those tests would not capture the true nature of the relationship.

Instead, the court relied on the U.S. Department of Labor’s Field Operations Handbook, which indicates that students who participate in extracurricular activities are not employees of the school. In addition, the court took a common sense approach and recognized that college athletes participate in these programs for reasons wholly unrelated to immediate compensation and without any expectation of earning an income. Viewing student athletes as employees also would undermine what the court recognized as a “revered tradition of amateurism in college sports.”

Thus, the Seventh Circuit has added one more nail to the coffin of student athletes as employees. While some may argue that large colleges and universities should share some of the significant income they receive from football and other well attended games with the student athletes, that could signal a slide down a slippery slope. If student athletes were considered employees, what about student actors, orchestra members and any other students involved in extracurricular activities where performances mandate an admission fee? And in the last analysis, students receive a variety of non-economic benefits that distinguish these activities from “employment” within the meaning of the FLSA.