Working Together

As most are aware, lawsuits brought by college athletes alleging entitlement to wages under the Fair Labor Standards Act (“FLSA”) have been uniformly rebuked by reviewing courts that have immediately dismissed such suits for failure to state a claim. For example, in Dawson v. NCAA, the United States District Court for the Northern District of California dismissed the FLSA claim of a scholarship football player, finding that he was not an employee of the university or the NCAA; and in Berger v. NCAA, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s dismissal of the FLSA claims brought by non-scholarship track and field athletes, also concluding that the athletes were not employees of the university or the NCAA.  However, the latest claim, brought by a former Villanova scholarship football player against the university and the NCAA, has survived (at least for the moment).

The Court in Livers v. Nat’l Collegiate Athletic Ass’n determined that the Plaintiff Lawrence “Poppy” Livers’ claim that he was denied compensation in violation of the FLSA for his work as a football player potentially stated a cognizable claim.  While the claim, filed more than two years after the alleged violation, may ultimately fail as untimely (the Court gave Livers additional time to establish that his claim arises from a willful violation, which would extend the limitations period from two years to three years), the case is interesting for a couple of reasons.

First, the Court’s refusal to dismiss the claim appears to run counter to guidance issued by the Department of Labor (the entity charged with administering the FLSA) in its Field Operations Handbook. That Handbook notes that student activities such as interscholastic athletics “conducted primarily for the benefit of the participants as part of the educational opportunities provided to the students… are not work under the FLSA and do not result in an employee-employer relationship”. FOH, § 10b24(a), 10b3(e).  Notably, the FOH distinguishes these types of extracurricular activities from work-study programs conducted for the benefit of the school, which the DOL considers to result in an employee-employer relationship. FOH, § 10b24(b).

Second, it appears that Livers, unlike the student athletes in the Dawson and Berger cases, did not attempt to argue that his activities primarily benefitted the school, and hence were more akin to work-study and constituted work as an employee under Section 10b24(b) of the FOH.  Instead, Livers asserted that the scholarship relationship created an expectation of compensation (in kind) for his activities upon which he was necessarily dependent, and that such economic dependence has been held sufficient to establish an employer-employee relationship under the FLSA.  The Court, noting the absence of controlling precedent to the contrary, refused to dismiss the claim at this early juncture.

While other courts have routinely rejected the FLSA claims of student athletes, and the Livers decision is largely nothing more than an acknowledgement that there is currently no binding authority in the Third Circuit compelling immediate dismissal of Livers’ claims, the case nonetheless bears watching as it proceeds. In addition, it will be interesting to see if additional claimants step forward utilizing the “economic dependence” theory adopted by Livers.