A San Francisco court recently ruled that college athletes are not entitled to pay under federal labor laws. The court dismissed a lawsuit brought by University of Southern California offensive lineman Lamar Dawson claiming that he was owed at least minimum wage under the Fair Labor Standards Act because he was an employee of the University during the time he played football. The court rejected this argument, ruling that college athletes are not employees under the Fair Labor Standards Act.
The Fair Labor Standards Act requires employers to pay employees at least minimum wage (which is at least $7.25 nationally and $8.25 in Illinois) and to pay them 1.5 times their regular hourly rate for any hours worked over 40 in a week. The Act considers an employee to be a person whom the employer requires to perform work by directing and controlling the work performed. If the work is integral to the employer’s business, or affects the employer’s ability to earn a profit or loss, or is of a relatively permanent nature, then an employer-employee relationship will be found.
The court found that student athletes are not employees because they voluntarily participate in sports primarily for their own benefit without the expectation of pay. It held that student athletes play sports for reasons unrelated to making money, which is why they should not be considered employees. It also found that most college athletes do not earn a profit for their schools.
While this is true, there is a prominent minority of college athletes, i.e. football and basketball players, who earn millions of dollars each year for their schools. This led a court in Chicago, who ruled on this issue in December, to speculate that student athletes who earn scholarships and who participate in sports that generate large amounts of revenue could be employees. The Chicago court ultimately ruled in its case that the athlete was not an employee because he ran track, which was not a lucrative program, and did not receive a scholarship. Dawson pointed to this in his argument, noting that the school he played for, USC, has a lucrative football program. The court, however, did not buy the argument that this made him an employee.
It looks like this case will be appealed, so stay tuned to our blog for updates. If you have questions about the FLSA, or whether your worker is an employee, independent contractor, or a volunteer, feel free to contact me for advice.