In its Alston decision in 2021, the U.S. Supreme Court ended the legal assumption that NCAA athletes were pure amateurs, exempt from a range of legal protections extended to workers. Since that decision, courts have faced a range of claims from college athletes seeking employment status under federal and state labor and employment laws. Last Thursday, the Third Circuit Court of Appeals established a test for determining when athletes are employees for purposes of minimum wage and overtime requirements under the Fair Labor Standards Act.

In Johnson v. NCAA, the Third Circuit established a modified "economic realities" test for determining when an athlete is an FLSA employee. Under this test, a college athlete is employed when he or she performs services primarily for the university’s benefit, the university controls the performance of those services, and where the services are performed for express or implied compensation or in-kind benefits. Acknowledging that the line between playing for one’s own enjoyment as opposed to playing as a profession can be murky, the court declined to apply the standard economic realities test used for other workers.

The practical effect of this decision may be that different college sports with different player management structures and financial incentives will have different outcomes with regard to employee status. Other federal circuits have established different tests for college athlete employment status, and the Supreme Court may be called upon once again to determine the line between playing for fun and quasi-professional athletics.

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