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NCAA Hit With Another Lawsuit Seeking Pay for Athlete’s Play (3)

Nov. 6, 2019, 9:13 PMUpdated: Nov. 7, 2019, 3:53 PM

College student-athletes are employees who are entitled to pay just like their fellow students in work-study programs, according to a proposed class action filed Nov. 6 in a federal court in Pennsylvania.

Ralph “Trey” Johnson, who played collegiate football at Villanova University before going pro, sued the National Collegiate Athletic Association and about two-dozen universities that are either located in the Eastern District of Pennsylvania or compete against schools there. The NCAA and the universities are joint employers who misclassified the student-athletes in violation of state and federal wage law, Johnson said.

The NCAA’s amateurism rules have endured a series of legal challenges under federal wage, labor, and antitrust laws that haven’t succeeded in forcing fundamental change to allow student-athletes to be paid for their play as if it was work.

Johnson’s lawsuit comes in the wake of the NCAA’s recent announcement that it’s inching toward letting student-athletes make money from their names, images and likenesses. The association, which reported more than $1 billion in annual revenue in 2018, directed its three divisions to consider bylaw and policy changes to allow student-athletes to market themselves.

The NCAA’s announcement undercuts its argument that student-athletes are amateurs, said Johnson’s lawyer, Michael Willemin, of the New York-based law firm Wigdor.

“The NCAA is saying it’s OK for athletes to be paid as long as somebody else pays them,” Willemin said. “Amateurs don’t get paid by third parties.”

Donald Remy, the NCAA’s chief operating office and chief legal officer, said the complaint is filed by “lawyers who have already sued unsuccessfully on this subject.”

“Importantly, it ignores previous court rulings that student-athletes are not university employees,” he said in a Nov. 7 statement. “The NCAA remains confident that courts will continue to uphold the precedent set by prior decisions.”

In previous cases, the association has argued that it preserves the tradition of amateurism by preventing students from competing in NCAA-sanctioned events if they’re paid. They are allowed to receive compensation for education-related expenses, the NCAA noted.

Building From Earlier Case

Johnson’s lawsuit builds on a similar wage lawsuit that Lawrence “Poppy” Livers, who also played football at Villanova, filed in the Eastern District of Pennsylvania in 2017. Taurus Phillips, another former Villanova football player, later stepped in as the named plaintiff due to statute of limitations issues with Livers’s claims. Paul McDonald, one of Johnson’s lawyers, represented Livers and Phillips.

That earlier lawsuit was dismissed in April because Phillips had a family issue and had to step away from the lawsuit.

But Johnson’s lawsuit benefits from documents that the NCAA and Villanova turned over during discovery in the previous case, Willemin said. Johnson’s complaint runs 104 pages, about twice the length of Livers’ first complaint.

Moreover, two rulings in Livers v. NCAA could help Johnson’s lawsuit, Willemin said.

Judge Michael Baylson rejected the NCAA’s motion to dismiss in July 2018, saying Livers pleaded enough facts to allege student-athletes are owed pay under the Fair Labor Standards Act.

In an earlier order, Baylson didn’t accept a defense that the NCAA has used in part to win two other cases seeking student-athlete pay.

The NCAA argued that courts need not apply multifactor FLSA tests to determine whether student-athletes qualify as employees because its tradition of amateurism defines the “economic reality” that allows them to go unpaid. The association backed its position by citing the Seventh Circuit’s 1992 decision in Vanskike v. Peters, which rejected a federal inmate’s lawsuit seeking pay for prison labor.

Although Baylson declined to take a position on the NCAA’s argument, he said a multifactor test like the one from the Third Circuit’s 1985 ruling in Donovan v. DialAmerica Marketing might be appropriate for determining student-athletes’ employment status.

The case is Johnson v. NCAA, E.D. Pa., No. 2:19-cv-05230, complaint filed 11/6/19.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Karl Hardy at khardy@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com