Analysis: The Latest FLSA Case Against the NCAA Has Gone Further Than Any of its Predecessors

By: Cameron Miller

Villanova is unashamedly a basketball school. Coach Jay Wright’s program has won two of the last three NCAA titles, outpacing Power 5 conference teams with deeper pockets, better legacies, and stronger recruiting machines. It is perhaps ironic, then, that it is a former member of Villanova’s football team—which doesn’t even compete in the FBS—who may ultimately have the school’s greatest impact on college sports in recent times.

Lawrence “Poppy” Livers, a four-year wide receiver for the Villanova football team (2011-14), sued the school, the NCAA, and others in September 2017, alleging that he and other scholarship athletes were employees under the Fair Labor Standards Act and therefore entitled to pay and other protections. In late July, a federal judge allowed Livers’ case to proceed to discovery, bringing him a step closer to, for the first time, winning official employee status for college players.

In recent years, a number of current or former college athletes have petitioned various courts and tribunals seeking employee status and its attendant benefits and protections. The first of those forays came at Northwestern University, where in 2014 the school’s football players, lead by quarterback Kain Colter, famously moved to unionize under the auspices of the National Labor Relations Act (NLRA). The players prevailed before a regional director of the National Labor Relations Board in 2014, but that decision was overturned the following year.

Since then, athletes have turned to the FLSA in an effort to be deemed employees, which would require schools to pay them a minimum wage (similar to work-study students). Months after the Northwestern players won a favorable ruling before the NLRB regional director, University of Pennsylvania track and field athletes Gillian Berger and Taylor Hennig sued to gain employee protections under the FLSA. Their claims were later dismissed, a decision the Seventh Circuit Court of Appeals upheld in December 2016. There, the court held that “student-athletic ‘play’ is not ‘work,’ at least as the term is used in the FLSA. [The athletes] in this case have not, and quite frankly cannot, allege that the activities they pursued as student-athletes qualify as ‘work’ sufficient to trigger the minimum wage requirements of the FLSA.” In a brief concurrence, though, one of the judges opined that he was unsure whether the court’s analysis “should extend to...Division I men’s basketball and FBS football,” where the “economic reality” may be different.

Shortly before the Seventh Circuit’s ruling in Berger, another FLSA action was launched against the NCAA and Pac-12 by a former USC linebacker in a California federal court. But that claim was also defeated at the motion to dismiss stage, with the court finding the work-study analogy deficient: “[T]here is a difference,” judge Richard Seeborg wrote, “between work-study programs, which exist for the benefit of the school, and football programs, which exist for the benefit of students and, in some limited circumstances, also benefit the school.” Dawson’s suit is currently on appeal in the Ninth Circuit.

Livers’ initiated his action October 2017, alleging that the NCAA, Villanova, and the other schools named in the complaint violated the FLSA in refusing to recognize him and other athletes as employees and compensate them commensurately. Judge Michael Baylson, a George W. Bush appointee, dismissed Livers’ allegations on statute of limitations (SOL) and other grounds in May 2018, but allowed the complaint to be amended to show a “willful” violation of the FLSA, which would extend the SOL to cover Livers’ claims.

Livers refiled his suit on May 30, 2018, and another round of motion to dismiss briefing ensued. The NCAA maintained that Livers had set forth neither a plausible claim that the NCAA and Villanova “willfully” contravened the FLSA in failing to pay him and other athletes nor that the “economic reality” of Livers’ relationship with Villanova was employee-employer. Livers, for his part, contended that the defendants’ actions were “willful” because of their disparate treatment of work-study students (who did received a wage) and athletes—despite both groups having similar economic relationships with the institution. The underlying FLSA claim was valid, Livers argued, due his “economic dependence upon his scholarship benefits” (a key determining factor in the “economic reality” analysis, which must show “dependen[ce] on the business which [the putative employee] serves”).

Judge Baylson looked far more favorably on Livers’ claims the second time around, finding that Livers’ amended complaint did adequately plead a “willful” violation of the FLSA and valid FLSA claim.

On the first issue, Judge Baylson identified three key differences between the original and amended complaints that allowed the latter to survive: 1) a new analysis showing the substantial similarities between work study students’ and athletes’ “performance outside the classroom” (the order noted that athletes’ non-scholastic activities even appeared to be “more arduous and time consuming”); 2) the differentiation of work study students and college athletes from students participating in student-run groups, who were not subject to the degree of “discretionary control by college supervisory staff” as the former group and whose activities were far more educational in nature; and 3) the fact that Villanova did not classify its collegiate athletic teams as a “student-run” group.

Those claims, Baylson held, were sufficient allow an inference that Livers’ proposed class of scholarship athletes had an economic relationship with their colleges similar to that of work-study students, meaning they could fall within the FLSA’s reach. The judge also found that Livers’ new pleadings regarding the justifications invoked by collegiate athletic administrators for not paying college athletes—which never included any references to the Department of Labor guidelines the NCAA now seeks to invoke—put the “willful” violation claim back within the realm of possibility. Again, that finding is key because without the “willful” aggravator, the statute of limitations on Livers’ FLSA claims expired before he filed his initial suit.

As to Livers’ actual FLSA claim, Judge Baylson recognized that the facts and allegations in the amended complaint, which included a more full-throated discussion of Livers’ “reliance on the financial benefits he received as a Scholarship Athlete,” allowed the charge to move past the motion to dismiss phase. Baylson did not give any indication as to how he would ultimately rule on the issue, but made clear that the Berger and Dawson cases may be of only marginal value in the resolution of Livers. That can only be good news for Livers, as both Berger and Dawson were near-conclusive defeats for athletes seeking FLSA protection.

The parties now have until September 24, 2018 to engage in discovery on the issue of the alleged “willfulness” of the NCAA and Villanova’s contravention of the FLSA. Summary judgment briefing is likely to follow, with the outcome determinative of whether Livers’ suit will proceed further. Livers has already taken his FLSA claim to a procedural stage no other college athlete has gone before, and this matter is worth following for its potential impact on the hotly-contested issue of athletes’ employee status.

Cameron Miller is a 2016 graduate of Stanford University and earned a Master's in Sports Law & Business from Arizona State University in 2017. He is the Sports Lawyers Association's Research Assistant and is a first-year law student at Georgetown University.