Former student-athletes at the University of Pennsylvania (“Penn”) filed suit against Penn, the NCAA, and more than 120 other NCAA Division I member institutions. In the suit, the plaintiffs alleged that student-athletes are “employees” within the meaning of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201. Therefore, the plaintiffs contend the NCAA and its member institutions violated the FLSA by not paying student-athletes a minimum wage. The District Court disagreed with the plaintiffs and dismissed their claims. The Seventh Circuit agreed with the District Court and held “student athletes are not employees and are not covered by the FLSA.”
Under the terms of the FLSA, “[e]very employer” is required to pay “his employees” a minimum wage. Section 203(e)(1) of the FLSA defines an “employee” as “any individual employed by an employer.” Thus, to qualify as an “employee” for the purposes of the FLSA, one must perform “work” for an “employer.” The United States Supreme Court has instructed the courts to construe the terms “employee” and “employer” expansively under the FLSA. Since the 1950s, most courts have held that student-athletes are not employees in the workers’ compensation context and are thus not entitled to compensation from schools for the injuries they suffer while playing their respective sports.
The Seventh Circuit considers NCAA-regulated sports to be “extracurricular,” “interscholastic athletic” activities and, thus, concluded that the Department of Labor did not intend the FLSA to apply to student-athletes. Additionally, the Seventh Circuit relied on and addressed several cases discussing the “revered tradition of amateurism in college sports.” The Seventh Circuit indicated the “long history of amateurism in college sports, by definition, shows that student-athletes—like all amateur athletes—participate in their sports for reasons wholly unrelated to immediate compensation.” The Seventh Circuit concluded that student-athlete “play” is not “work” as that term is defined by the FLSA. Therefore, “as a matter of law, student-athletes are not employees and not entitled to a minimum wage under the FLSA.”