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PHILADELPHIA – College athletes whose efforts primarily benefit their schools can qualify as salaried employees under federal wage-and-hour laws, a U.S. appeals court ruled Thursday in a blow to the NCAA.
In the latest challenge to the NCAA’s long-held concept of “professionalism” in college sports, the court said a test should be created to distinguish between those who play college sports for fun and those whose efforts “cross the legal line at work.”
“As the clearest indicator with professional athletes, sports must constitute compensable work,” US Circuit Judge L. By Felipe Restrepo “Ultimately, whether the evolving state of the relationship between athletes and colleges or the NCAA reflects the economic realities of an employee-employer relationship remains touchy.”
A colleague, in a concurring opinion, questioned the difficulty of such a process, noting that about 200,000 students compete on about 6,700 Division I teams. The NCAA had hoped to dismiss the case, but it will go back to the trial judge for a fact finding.
The ruling follows a 2021 Supreme Court decision that led the NCAA to revise its rules to allow athletes to profit from their names, images and likenesses. In May, the NCAA announced a nearly $2.8 billion revenue sharing plan that could drive millions of dollars directly to athletes by next year.
The Division I athletes and former athletes behind Philadelphia’s suit are seeking more modest hourly wages similar to those earned by their peers in work-study programs. They argue that colleges are violating fair labor practices by failing to pay them for the time they devote to sports, which they say can average 30 or more hours per week.
Lawyer Paul McDonald, representing the plaintiffs, suggested that athletes could earn $2,000 a month or $10,000 a year for participating in NCAA sports. He said many students need money for daily expenses.
“The idea that college athletes can’t be both students and employees is not right when you have student employees on campus,” McDonald said Thursday. “It’s beyond belief, the idea that athletes wouldn’t meet the same criteria as employees.”
A district judge refused to throw out the case, asking the Indianapolis-based NCAA to block the appeals court from going to trial.
The defendants include the NCAA and member schools including Duke University, Villanova University and the University of Oregon.
The NCAA, in a statement, said it is expanding key benefits for athletes, from health care to career preparation, and wants to help schools administer more direct financial benefits to their athletes.
However, it noted that it called students’ concerns that the employment model “could harm their experience and unnecessarily cost the opportunities of countless student-athletes in women’s sports, Olympic sports and HBCU and Division II and Division III level sports.” The statement was issued by NCAA spokeswoman Meghan Durham Wright.
The unanimous Supreme Court decision that prompted the NIL payment lifted the ban on college compensation outside of full-ride scholarships. Schools recruiting top athletes can now offer education-related benefits such as study-abroad programs, computers and thousands of dollars in graduate scholarships.
Judge Brett Kavanaugh wrote in a concurring opinion, “Tradition alone cannot justify the NCAA’s decision to build a massive fund-raising initiative behind NCAA student athletes who are not fairly compensated.” “The NCAA is not above the law.”
But that case did not resolve whether college athletes are directly salaried employees — the key issue before the 3rd U.S. Circuit Court panel.
Baylor University President Linda Livingstone, speaking at the NCAA convention last year, said the model would turn coaches into their players.
“Turning student-athletes into employees would have far-reaching, staggering and potentially catastrophic effects on college sports,” said Livingstone, chairperson of the NCAA’s Board of Governors. “We need Congress to ensure student-athletes have a unique relationship with their university.”
But the relationship has faced increasing scrutiny.
In 2021, a top lawyer for the National Labor Relations Board said in a memo that college athletes should be considered school employees.
And players have taken to social media to demand a cut of some of the tens of millions of dollars NCAA schools earn from sports, with a campaign on the eve of the 2021 NCAA basketball tournament carrying the hashtag #NotNCAAProperty.
The NCAA, in its convention, compares athletes to students who perform without pay in theater groups, orchestras and other campus activities.
MacDonald said such campus groups are student-led, while athletes have their time regulated by their coaches, similar to employment.
“The most controlled kids on any campus are the student-athletes,” he said earlier this year.
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