By Tyler O’Hara
The National Collegiate Athletic Association (“NCAA”) faces another legal challenge to its amateurism model as former student-athlete Lamar Dawson filed a class action complaint on September 26th, 2016 in the Northern District of California. A former University of Southern California linebacker, Dawson’s complaint accuses the NCAA and the Pacific-12 Conference (“PAC-12”) of violating federal and state worker-protection laws. Specifically, the class action seeks unpaid wages, including unpaid overtime compensation and interest thereon, required minimum wage payments, waiting time penalties, liquidated damages and other penalties, injunctive and other equitable relief under Sections 6 and 7, 29 U.S.C. §§ 206 and 207, of the Fair Labor Standards Act (“FLSA”). The action additionally asks the Court to consider claims arising under California law, including Title 8 of the California Code of Regulations, the California Labor Code,1 the California Business and Professions Code sections 17200, et seq., and the Code of Civil Procedure section 1021.5.
Dawson brings the action on behalf of himself and all other members of the FLSA Class, the California Class and various Subclasses (collectively “the Classes”). The Classes membership consists of those who are, or have been, regulated and/or controlled in their employment, and the compensation therefor, as student-athletes engaged on the football field by the NCAA and PAC-12, and to the substantial economic benefit of these organizations.
FSLA Claims
Pursuant to Section 6 of the FLSA, 29 U.S.C. § 206, every employer is required to pay each of his employees a minimum wage. Additionally, § 207 requires employers to provide overtime compensation for any work, labor, and services provided by employees who have already worked forty hours in a week. As argued by Dawson, the NCAA and the PAC-12 were the joint employers of the employee FLSA Class football players. In violation of the FLSA, the NCAA and the PAC-12 failed to pay the FLSA Class a minimum wage or overtime compensation for time spent working as football players.
Before any potential violations of the FLSA can be addressed, however, the issue of whether or not the Classes fall under the definition of “employees” must be addressed. While Dawson’s complaint makes the assumption that the football players in the Classes are employees, the definition in the FLSA provides little clarity. “[T]he term employee, means any individual employed by an employer.” 29 U.S.C. § 203(e)(1). Next, § 203(g) defines “employ” as “to suffer or permit to work.”
As a result of this circular logic, the Southern District of Indiana sought to clarify this question in Berger v. NCAA, 162 F. Supp. 3d 845 (2016). In Berger, three women on the University of Pennsylvania’s track and field team alleged they were employees of the University for purposes of the FLSA. In granting the University’s motion to dismiss, the court held that the women were not employees for purposes of FLSA, citing the U.S. Department of Labor:
[A]s part of their overall educational program, public or private schools and institutions of higher learning may permit or require students to engage in activities in connection with dramatics, student publications, glee clubs, bands, choirs, debating teams, radio stations, intramural and interscholastic athletics and other similar endeavors. Activities of students in such programs, conducted primarily for the benefit of the participants as part of the educational opportunities provided to the students by the school or institution, are not “work” [under the FLSA] and do not result in an employee-employer relationship between the student and the school or institution. Also, the fact that a student may receive minimal payment for participation in such activities would not necessarily create an employment relationship.
U.S. Department of Labor, Wage and Hour Division, Field Operations Handbook § 10b03(e) (Oct. 20, 1993) (“§ 10b03(e)”).
It seems plausible the court in here could apply a similar definition to the one used by the Southern District of Indiana. The issue of whether or not student-athletes are “employees” under various federal worker protection statutes has been a growing issue as of late. The determination of the definition under the FLSA will hopefully begin to provide answers.
California State Law Claims
Similar to the minimum wage requirement under FLSA, the California Minimum Wage Order MW-2014 (“Order”) requires California employers to compensate their employees with a proscribed minimum wage for each hour worked in applicable pay periods. Failure to adhere to the Order violates California Labor Code sections 510, 558, 1194, and 1198. California Labor Code section 1194.2 allows a plaintiff to recover additional liquidated damages.
Again similar to the FLSA, California Labor Code sections 510, 1194, and 1198 mandates employers provide overtime compensation to employees who have worked greater than forty hours in a work week. As argued in the complaint, the NCAA and the PAC-12 were the joint employers of the California Class and failed to provide overtime compensation to their employees, the football players, who worked greater than forty hours in a workweek.
This argument seems to be unfounded, as California labor law has an established precedent of excluding student-athletes from the definition of employee. Article 2, section 3352(k) of the California Labor Code expressly excludes student-athletes from the definition of employee. While this exemption originally applied only to workers compensation, case law has expanded the exemption to other areas of the Code.
In Van Horn v. Industrial Acc. Comm., (1963) 219 Cal. App. 2d 457 a student athlete received financial aide in exchange for playing football, with a portion of the money in the form of an athletic scholarship. After the student was killed in an airplane crash while returning from an away football game, the student’s heirs applied for workers’ compensation death benefits under the premise that the decedent was an employee of the University. While the Court of Appeal held that the student had an employment contract with the university and that his heirs were entitled to workers’ compensation benefits, it emphasized that “[i]t cannot be said as a matter of law that every student who receives an ‘athletic scholarship’ and plays on the school athletic team is an employee of the school.” Van Horn v. Industrial Acc. Com. (1963) at 467.
In response to Van Horn, the California Legislature ultimately amended Labor Code section 3352 to add subdivision (k), which excluded scholarship athletes from the definition of the term “employee.” The section currently reads: ‘Employee’ excludes . . . (k) Any student participating as an athlete in amateur sporting events sponsored by any . . . university or school, who receives no remuneration for the participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings, scholarships, grants-in-aid, or other expenses incidental thereto.” The purpose of the amendment was later elucidated. “[The] amendment evidence an intent on the part of the Legislature to prevent the student-athlete from being considered an employee of an educational institution. Townsend v. State of California (1987) 191 Cal. App. 3d 1530, 1537; Graczyk, supra, 184 Cal. App. 3d at pp. 1002, 1005-1006.
In Townsend, a basketball player for San Jose State University struck an opposing player with his fists and inflicted an injury. The injured player filed a personal injury claim, however, before the matter was submitted to the jury, the trial court determined as a matter of law that the San Jose State player was not an employee of the State of California. Townsend concluded:
It is a matter of common knowledge that colleges and universities in California, in varying degrees, maintain athletic programs that include a number of sports, such as golf, tennis, swimming, track, baseball, gymnastics and wrestling. It is also well known that of all the various sports programs, at least in California, only two, i.e., basketball and football, generate significant revenue. These revenues in turn support the other nonrevenue producing programs. Thus, conceptually, the colleges and universities maintaining these athletic programs are not in the ‘business’ of playing football or basketball any more than they are in the ‘business’ of golf, tennis, or swimming. Football and basketball are simply part of an integrated multisport program which is part of the education process. Whether on scholarship or not, the athlete is not ‘hired’ by the school to participate in interscholastic competition.
Townsend, 1536-1537.
While the issue of whether or not a student-athlete is considered an “employee” under the FLSA is subject to debate, the established rule in California is that they are not. The NCAA and PAC-12 have yet to file a response with the Court, however, a 12(b) motion to dismiss seems the next likely step considering the state law charges.
Tyler O’Hara is recent graduate of Carolina Law and received his J.D. in May 2016. Tyler can be reached at tohara@live.unc.edu.
1. 200-204, inclusive, 216-218.6, 223, 226, 510, 1174, 1194, 1194.2, 1197.
