On July 25, 2018, U.S. District Judge Michael M. Baylson denied the NCAA and Villanova University’s motion to dismiss in Lawrence “Poppy” Livers’ amended lawsuit. As we have previously reported, Livers sued the NCAA claiming that the NCAA, Villanova, and other universities were violating the minimum wage provision of the Fair Labor Standards Act (FLSA). Livers likened college athletes to paid student employees and claimed they should be compensated as such.
The NCAA and Villanova moved to dismiss the amended lawsuit because it was outside of the two-year statute of limitation for FLSA claims. According to the memorandum, Livers filed the suit two years and nine months after his career as a Villanova student athlete concluded. However, the FLSA statute of limitations can extend to three years for “willful” violations, but according to the NCAA and Villanova, Livers lawsuit did not properly allege a “willful” violation. According to the NCAA and Villanova, guidance from the Department of Labor “clearly establishes the view that student athletes are not covered under the FLSA — and therefore [the NCAA and Villanova] were reasonable in believing that they need not compensate student athletes pursuant to the FLSA, and therefore could not have ‘willfully’ violated the FLSA.”
In response, Livers argued that law in the Third Circuit suggests that determination of whether FLSA claims are “willful” is a question of fact and is not appropriate at the motion to dismiss stage. According to Judge Baylson, Livers’ amended complaint alleges, “NCAA member schools understood that scholarship athletes are directly comparable to students employed in work study programs, individuals who are classified as employees under the FLSA.” Further, the complaint includes “factual allegations comparing and contrasting scholarship athletes and students involved in work study programs in order to demonstrate that scholarship athletes’ performance outside the classroom is similar … to that of students involved in work study, and in fact that it is more arduous and time consuming.” Lastly, the complaint includes “factual allegations contrasting the experience of scholarship athletes and students involved in work study programs to that of students involved in student-run groups, to demonstrate that this latter group is subject to much less discretionary control by college supervisory staff.”
The NCAA and Villanova also moved to dismiss the lawsuit on the grounds that Livers’ amended lawsuit did not have allegations sufficient to establish that the “economic reality” of his relationship with Villanova or the NCAA was one of employee to employer. According to the NCAA and Villanova, Livers “merely alleges that [he] voluntarily participated, initially without receiving a scholarship in return, in a sport with a long tradition of amateurism, while attending school for the purpose of receiving an education.”
According to Judge Baylson, “[t]here is no single test for evaluating the ‘economic reality’ standard, and none of the various tests that courts have used in differing circumstances can fairly be applied here, as they all fail to capture the ‘tradition of amateurism’ that defines student athletics.” However, Judge Baylson ruled that Livers amended lawsuit includes “facts regarding the economic reality of the relationship between [Livers], in his capacity as a scholarship athlete with the Villanova football team, and Villanova and the NCAA,” because Livers alleged “facts detailing his reliance on the financial benefits he received as a scholarship.”