In a recent ruling that advances the prospect of college athletes gaining recognition as employees, Pennsylvania federal judge John Padova denied the NCAA’s motion to dismiss a lawsuit brought by Ralph “Trey” Johnson and five other current and former athletes.
Judge Padova issued the denial in Johnson v. NCAA on Sept. 22. Last month he denied a motion to dismiss filed by those players’ five schools (Villanova, Fordham, Sacred Heart, Cornell and Lafayette). Those schools and the NCAA are co-defendants in a case that could eventually become certified as a class action.
A 173-page amended complaint filed on Sept. 23 expanded the roster to 14 current and former players who are suing (seven women and seven men). Correspondingly, the list of attended school defendants was enlarged to add Duke, Notre Dame, Oregon, Arizona, Penn, Purdue, Tulane, Marist and Drexel.
The NCAA insists these players lack standing to sue since the NCAA doesn’t employ them. Judge Padova disagreed. He found the players’ arguments “plausible” and thus legally sufficient to advance past a motion to dismiss. To that point, the players contend they are employees under both state law and the Fair Labor Standards Act, a federal law that guarantees minimum wage and overtime pay. The FLSA is separate from the National Labor Relations Act, which was invoked by Northwestern football players in their unsuccessful effort in the mid-2010s to be declared employees.
The NCAA’s core argument rests in precedent. In Dawson v. NCAA (2019), the U.S. Court of Appeals for the Ninth Circuit held that college football players at PAC-12 schools weren’t FLSA employees of either the NCAA or PAC-12. Those football players, the Ninth Circuit reasoned, lacked an expectation of compensation. The NCAA also functions as regulator of college sports, not an employer of those who compete in college sports.
The NCAA also draws from Callahan v. City of Chicago (2017), which involved a taxi driver claiming that because the city’s taxi regulations were “so extensive,” the city “must be treated as her employer.” The U.S. Court of Appeals for the Seventh Circuit disagreed, reasoning that such an outcome would nonsensically “produce multiple employers for every worker—for the United States, the State of Illinois, Cook County and other governmental bodies permit taxi drivers to work in the same sense as Chicago does.” In other words, the government permitting people to work in a particular occupation doesn’t convert the government into their employer. Analogously, the NCAA allowing college athletes to play intercollegiate sports doesn’t convert the NCAA into their employer.
Judge Padova downplayed those two cases. First, neither is from the federal circuit (the Third) governing Judge Padova’s judicial district. Those rulings are thus persuasive authority, not binding precedent. Second, the judge emphasized how Dawson and Johnson are “not identical” and each features distinguishable arguments and facts. Third, he underscored that Callahan involved the City of Chicago as a defendant whereas the NCAA “is not a governmental entity.”
The relevant legal test, Judge Padova identified, is from In re Enterprise Rent-A-Car, a case from the U.S. Court of Appeals for the Third Circuit in 2012. In re Enterprise involved branch managers of a national chain arguing that the parent company was their joint employer under the FLSA. The Third Circuit identified four factors for determining if two entities are joint employers of the same person.
The first factor is whether the defendant has authority to hire and fire the workers. Judge Padova found the NCAA possesses substantial employer-like powers, including in ways that resemble the authority to hire and fire. For instance, NCAA bylaws tightly restrict the recruiting process, such as by limiting the number of telephone calls and communications with recruits as well as forbidding inducements. The bylaws also constrict scholarships. In addition, they contemplate penalties for non-complying member schools and—the judge stressed—“require member schools to suspend or fire student athletes who are determined to be ineligible to play by NCAA Enforcement Staff.”
The second factor is authority to promulgate work rules and set workers’ compensation, benefits and work schedules. Here again Judge Padova eyed the NCAA as functioning akin to an employer. NCAA bylaws govern eligibility, permissible and non-permissible benefits, and oversee athletes and schools adhering to what are known as “Countable Athletically Related Activities” or “CARA.” CARA limits the number of hours college athletes can spend on sports, though some athletes contend they often exceed those hours. Most relevant here, the NCAA exercises authority by punishing schools which fail to follow CARA rules and related scheduling obligations.
The third factor is involvement in day-to-day supervision. Judge Padova saw several ways the NCAA exercises such control. Among them: setting parameters for how member schools can discipline athletes; establishing specific grounds for when schools can reduce or cancel scholarships; and detailing procedures for reviews and appeals.
The fourth factor is NCAA control of players’ records. Judge Padova noted that the NCAA possesses record-keeping control through its eligibility center. Member schools must share various pieces of information with the center, including when a program is the target of an NCAA investigation.
While Judge Padova declined to dismiss the FLSA claims against the NCAA, he did dismiss those claims against 20 additional named Division I universities, which none of the six players attended. Those schools include Princeton, Penn State, Pittsburgh, Rutgers and Temple. The case also involves unjust enrichment claims that remain in play against the different groups of defendants.
A day after Judge Padova’s ruling, the five attended schools (Villanova, Fordham, Sacred Heart, Cornell and Lafayette) filed a motion for leave to file an “interlocutory appeal.” Such an appeal is a challenge to a pretrial ruling before the case has been decided on the merits. Interlocutory appeals seldom succeed, however, since appellate courts typically want the entire case resolved first.
Here, the five schools (who were joined by the NCAA in their motion to dismiss brief) maintain that when Judge Padova denied their motion, he wrongly relied on U.S. Supreme Court Justice Brett Kavanaugh’s concurrence in NCAA v. Alston. That often-discussed concurrence blasted NCAA rules limiting athlete compensation. The schools stress that Justice Kavanaugh’s viewpoints should be regarded as dicta (that is, commentary non-essential to the holding) and not the law—only the majority opinion, as authored by Justice Neil Gorsuch, governs. The schools also insist that Judge Padova failed to adequately consider Berger v. NCAA, a Seventh Circuit case from 2016 that found college athletes are amateurs, not employees.
Moving forward, the players, as represented by attorneys Paul McDonald, Michael Willemin, Renan Varghese and others, still have a long road ahead before prevailing. Plus, any jury trial victory would almost certainly be appealed to the Third Circuit. However, as the case progresses, the attorneys can extract more evidence from the NCAA and demand sworn testimony on sensitive topics. Fresh off a 9-0 defeat in Alston, it will be worth watching whether the NCAA chooses to play the long legal game in Johnson or whether it “voluntarily” reforms college athletes’ rights.