On December 5, 2016, the Seventh Circuit Court of Appeals issued a decision in a case brought by former student athletes of the track and field team at the University of Pennsylvania, against the University, the NCAA and several other Division I universities. The former student athletes claimed that during their time in college athletics they were employees of the defendants and therefore entitled to a minimum wage under the Fair Labor Standards Act.
The district court held that the student athletes, who formerly attended the University of Pennsylvania, were too far removed from the other defendants to bring a claim against them. Further, with respect to the University of Pennsylvania, the district court held the student athletes did not and could not allege that their activities as student athletes qualified as “work” under the FLSA. The Seventh Circuit Court of Appeals affirmed, declining to apply the factor test used in the Second Circuit, favoring a more flexible approach that captured the “true nature” of the employment relationship.
Although the panel of judges found that student athletic play is not “work” for the purposes of demanding a minimum wage under the FLSA, it is possible that a hearing en banc may be in the works. As it stands, the Seventh Circuit’s ruling could mark the end of the road for class actions asserting student athletes are entitled to compensation under the FLSA.
Despite the potential finality of the Seventh Circuit decision, it is worth noting that when the district court issued its decision back in February, it stated in a footnote that the opinion should not be interpreted as a stance on whether student athletes should be compensated in general. The Seventh Circuit decision was silent on this issue. Given the Seventh Circuit’s emphasis on a flexible approach to determining who is an employee under the FLSA, it is unclear how broadly or narrowly this opinion will be construed moving forward. This begs the question of whether the outcome would be different in the case of an athlete on a team generating substantial revenue for his or her school.