Amateur Hour Is Over: Time for College Athletes to Clock in Under the Flsa

• Publication year: 2021

Amateur Hour Is Over: Time for College Athletes to Clock In Under the FLSA

Nicholas C. Daly
ndaly1@student.gsu.edu

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AMATEUR HOUR IS OVER: TIME FOR COLLEGE ATHLETES TO CLOCK IN UNDER THE FLSA

Nicholas C. Daly^*

Abstract

The debate surrounding the National Collegiate Athletic Association's (NCAA) amateurism principles has waged for decades. The governing body of college athletics insists that the athletes who compete on a daily basis should not—or shall not—receive any compensation in exchange for their services while NCAA executives line their pockets with billions of dollars each year. This concept of "no pay for play" has drawn national criticism since the NCAA created the term "student-athlete" in the 1950s to combat a workers' compensation claim. The amateurism principles were concocted as an attempt to prevent college athletes from being classified as employees of their universities; put more plainly, the NCAA intentionally labeled college athletes as "amateurs" to deny the athletes the compensation they are entitled to.

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Athletes have challenged the NCAA's amateurism principles under the Fair Labor Standards Act (FLSA) in the past, petitioning courts to recognize athletes as "employees" of their universities, but to no avail. Courts traditionally rely on an "economic reality" test to determine whether an employer-employee relationship exists, entitling the petitioning party to guaranteed protections under federal labor laws. In the context of college athletics, however, the economic reality of the relationship between the athletes, their universities, and the NCAA is traditionally defined by the NCAA's concept of amateurism. But what happens when amateurism is exposed for the sham of a concept it truly is?

This Note explores how recent judicial, legislative, and societal events have eviscerated the credibility of the NCAA's amateurism principles. Specifically, this Note argues that a district court order, though issued in the antitrust context, precludes future courts from relying on the amateurism principles to define the economic reality of college athletics. The case, In re National Collegiate Athletic Ass'n Athletic Grant-in-Aid Cap Antitrust Litigation (Alston), exposes the hypocrisy behind the NCAA's compensation rules in a way that changes the calculus of an FLSA challenge and demands a finding that college athletes qualify as employees under federal labor laws. Now, the Supreme Court is set to get involved, granting certiorari to review Alston and allow the Court to assess the amateurism principles for the first time in thirty-five years. With the pressure surrounding the NCAA's exploitation of college athletes reaching an all-time high, this Note proposes that the NCAA proactively abandon its commitment to its antiquated concept of amateurism and afford college athletes the basic fundamental rights they are entitled to through collective bargaining and group licensing agreements.

The NCAA has stubbornly insisted on labeling college athletes as "amateurs" when reality reflects that the athletes are anything but. In fact, the only distinguishing factor that separates college athletes from their professional counterparts is the arbitrary—and frankly insulting—label that the NCAA desperately clings to. No longer can the charade continue. The NCAA's time is up; amateur hour is over.

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CONTENTS

Introduction................................................................................474

I. Background............................................................................487

A. Overview of Antitrust Challenges to the NCAA's Amateurism Principles............................................................................489
B. FLSA Challenges and the Economic Reality Test..............491

1. Berger's "Long-Standing Tradition" of Amateurism and the Revenue Caveat.......................................................493
2. "Roadmap" to Success: Economic Dependence on Scholarships .................................................................. 494

II. Analysis..................................................................................497

A. Examining Judge Wilken's Order in Alston.......................500
B. The Alston Effect on Future FLSA Challenges: Applying the Donovan Test ...................................................................... 511

1. Degree of the NCAA's Right to Control the College Athletes.......................................................................... 513
2. Opportunities for College Athletes to Experience Profit or Loss ............................................................................... 515
3. College Athletes' Personal Investment in Equipment and Materials ....................................................................... 518
4. Level of Athletic Skill Required....................................519
5. Permanence of the Relationship Between the NCAA and the College Athletes......................................................520
6. College Athletes As an Integral Part of the NCAA's Business ........................................................................ 522
7. Other Factors Necessary to Assess Economic Reality . 523

III. Proposal..................................................................................525

A. Refuting the Myth of the " Student-Athlete" : Optional Education ............................................................................ 527
B. Collective Bargaining Salary Caps and University Group Licensing Unions ................................................................ 531

1. Sport-Specific Salary Cap.............................................533
2. University Group Licensing..........................................536

Conclusion...................................................................................538

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Introduction

Picture this: a billion-dollar industry growing at a rate faster than Fortune 500 corporations that prohibits the very individuals responsible for generating such revenue from earning their fair share.¹ Something seems inherently wrong with this scenario, but this is the reality of college athletics.² The National Collegiate Athletic

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Association (NCAA) justifies the prohibition on compensating college athletes by hiding behind the facade of "amateurism."³ The NCAA vehemently insists that amateurism is a bedrock principle of the organization's existence yet fails to actually define the term in its Division I Bylaws.⁴ Traditionally, amateurism is understood to stand for the proposition that college athletes must not receive compensation in exchange for their participation in intercollegiate athletics.⁵ But this concept of amateurism ignores the ever-changing makeup of the market surrounding college athletics.⁶ Fortunately for the athletes, recent developments in the judiciary, legislature, and even the NCAA's internal Board of Governors signal that times are indeed changing.⁷

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In September of 2019, California became the first state in the country to create a legal right for college athletes to earn compensation for the commercial use of their name, image, and likeness (NIL).⁸ The "Fair Pay to Play Act" stoked an already intense debate surrounding the NCAA's compensation regulations and ignited a trend of legislators across the country proposing similar legislation in their respective states.⁹ Florida and Colorado notably passed similar legislation in the summer of 2020.¹⁰ While the

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California and Colorado laws do not take effect until 2023, Florida's law takes effect on July 1, 2021, forcing the NCAA to make quick but substantial adjustments to the governing body's compensation regulations.¹¹ Collectively, these laws represent a tremendous threat to the NCAA's amateurism principles, and over half of the country is following suit.¹²

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In response to the mounting legislative pressure, the NCAA announced that it intends to reform its own NIL policies.¹³ In 2020, the NCAA Board of Governors announced, and the Division I Council subsequently approved, its support for a series of proposed amendments to the governing body's NIL rules that would allow college athletes to earn previously impermissible forms of compensation.¹⁴ Exactly how the NCAA plans to implement such

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reform, however, still remains to be seen.¹⁵ In the meantime, the NCAA has lobbied Congress to adopt federal legislation that will preempt all state laws addressing college athlete NILs, allowing the NCAA to retain its dictatorial control over college athlete compensation.¹⁶ Such federal intervention may not come to the

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NCAA's rescue as quickly as the governing body would like, however, thanks to the COVID-19 pandemic.¹⁷

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The COVID-19 pandemic spurred an unprecedented response from the NCAA and its Division I affiliates that threatened the very existence of college sports as a whole.¹⁸ First, the NCAA canceled the 2020 Division I men's and women's basketball tournaments and ceased competition of 2020 spring sports entirely.¹⁹ Then, after monitoring the development of the pandemic over the summer of 2020, numerous Division I conferences and countless Division II and Division III programs canceled football seasons and fall sports as well.²⁰ The NCAA itself, however, failed to issue any semblance of a directive to its member institutions, instead allowing the institutions to adopt their own contingency plans, leading to significant discord among even the most powerful conferences in Division I.²¹ The lack

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of centralized leadership pushed the athletes to the brink, resulting in collective groups of players threatening to opt out of competition for fall sports while unifying to advocate for economic, social, and racial equality.²² Experts speculate that such a response by the athletes and

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conferences could push some conferences to break away from the NCAA and provide the athletes...