College sports is a multibillion-dollar machine fueled by people who, legally speaking, didn't exist as workers until very recently. For decades, the NCAA leaned hard on the "student-athlete" moniker. It was a brilliant bit of branding. It suggested that these kids were just playing for the love of the game and a degree. But the Third Circuit Court of Appeals recently blew a hole in that logic with Johnson v National Collegiate Athletic Association. This case isn't just another legal skirmish; it's a fundamental shift in how we define work in America.
If you’ve been following the madness of NIL deals and the transfer portal, you might think the battle is already won. It isn’t. Johnson v National Collegiate Athletic Association asks a much more "boring" but dangerous question: Under the Fair Labor Standards Act (FLSA), are these athletes actually employees entitled to a minimum wage?
The NCAA hates this question.
The Myth of Amateurism Meets the FLSA
The FLSA was born in 1938 to stop people from being exploited. It’s the reason we have a minimum wage and overtime. For a long time, the NCAA argued that because college sports are "amateur," the FLSA simply doesn't apply. They pointed to the 1992 case Vanskike v. Peters, which dealt with prisoner labor, and tried to say student-athletes were more like prisoners or volunteers than employees.
It didn't work this time.
In Johnson v National Collegiate Athletic Association, the plaintiffs—led by former Villanova football player Ralph "Trey" Johnson—argued that the sheer amount of control universities exert over their lives makes them employees. We’re talking about 40 to 50 hours a week of mandatory "voluntary" activities. When a coach tells you when to eat, when to sleep, and what you can post on Instagram, that looks a lot like a job. The Third Circuit agreed that you can't just slap the "student" label on someone to avoid paying them for their labor.
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Why the "Economic Reality" Test Changes Everything
Courts usually use something called the "economic reality" test to figure out if someone is an employee. It’s not about what the contract says. It’s about who has the power.
Think about it.
A biology student doing an unpaid internship for credit is learning a trade. A punter for a Power Five school is performing a service that generates millions for the university. One of these things is "predominantly for the benefit of the student," and the other is "predominantly for the benefit of the employer."
The court in Johnson v National Collegiate Athletic Association rejected the idea that "amateurism" is a valid legal defense. Judge Theodore McKee basically said that the NCAA’s argument was a circular logic trap. You can’t say they aren't employees because they are amateurs, especially when "amateur" is a definition the NCAA created themselves to avoid paying them. It’s kinda like a company saying, "Our workers aren't employees because we call them 'Joy-Spreaders' and Joy-Spreaders don't get paid."
It’s nonsense.
The court looked at the Glatt v. Fox Searchlight Pictures test. This test was originally for unpaid interns in the film industry. It asks: who is the primary beneficiary of the relationship? In the high-stakes world of modern college athletics, the answer is rarely the kid in the jersey. The university gets the TV contracts, the bowl bonuses, and the massive branding boosts. The athlete gets a scholarship that doesn't even cover the full cost of living in many cities.
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The NCAA’s "Sky is Falling" Defense
You'll hear a lot of doomsday talk from athletic directors. They claim that if Johnson v National Collegiate Athletic Association leads to employee status, Olympic sports like track and field or swimming will be cut. They say schools can't afford it.
Honestly? That’s a choice, not a necessity.
Schools spend millions on "facilities wars." They build locker rooms with literal waterfalls and sleep pods for football players. They pay coaches $10 million a year. The money is there; it’s just currently being funneled into everything except the labor.
There's also the Title IX complication. If athletes are employees, how do you handle pay equity? This is a legitimate hurdle. If a male quarterback is an employee, is the female point guard also an employee? Under the FLSA, yes. But the market value of their "work" might be different in the eyes of a capitalist system, yet Title IX demands equality in educational opportunities. It’s a legal minefield that will take a decade to clear.
What Happens Next?
The Third Circuit didn't officially declare every athlete an employee. What they did was send the case back down to the district court. They told the lower court to use a "pro-player" framework to decide. This is a massive victory for the plaintiffs. It means the NCAA can no longer hide behind the "tradition" of amateurism to get these cases dismissed early.
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We are likely heading toward a settlement or a Supreme Court showdown. Given how Justice Brett Kavanaugh slammed the NCAA in the Alston case—famously saying "the NCAA is not above the law"—the association is rightfully terrified.
What this means for you
If you're a fan, the game is going to change. It might get more expensive. If you're an athlete, you're looking at a future where you have a seat at the table.
Actionable Insights for the Future of College Sports:
- Watch the District Court: The next phase of Johnson v National Collegiate Athletic Association will involve "discovery." This means the public might finally see the internal emails and financial documents that show exactly how much control coaches exert over players.
- Collective Bargaining is Inevitable: If athletes are employees, they will unionize. This is the only way to manage the chaos of 500,000 "employees" across the country. Look for the Dartmouth basketball unionization efforts as a bellwether for what’s coming.
- The End of the Scholarship Model: We may see a "hybrid" model where athletes are students first for part of the day and employees for the rest. This would require a massive rewrite of university bylaws.
- Tax Implications: Employees pay taxes. Scholarships are mostly tax-exempt. Athletes need to start preparing for a world where their "benefits" come with a 1099 or a W-2.
This isn't just about a few bucks an hour. It’s about dignity and the legal recognition that if you’re doing the work, you deserve the protection of the law. The NCAA’s century-long run of free labor is hitting a brick wall made of three words: Fair Labor Standards.