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SEC explains fear of pay-to-play in Johnson v. NCAA amicus brief

Pete Nakos06/20/22
Article written by:On3 imagePete Nakos

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Another wrinkle has emerged in the conversation surrounding universities directly paying student-athletes. The SEC and 13 other education associations have submitted amicus briefs to the U.S. Court of Appeals for the Third Circuit regarding Johnson v. NCAA. The federal case argues players should be paid as much as their work-study peers.

In briefs obtained by Sportico, the most powerful conference in college athletics urged the court to reverse U.S. District Judge John Padova’s decision, which rejected the NCAA’s motion to dismiss and supported college athletes as employees under Fair Labor Standards Act (FLSA).

An amicus brief is when an individual or organization who is not a party to a legal case is permitted to assist a court by offering information or insight that has a bearing on the issues in the case.

The Third Circuit region consists of Pennsylvania, New Jersey, Delaware and the Virgin Islands. Yet the SEC and other conferences are paying attention to the ruling in a similar fashion to how stakeholders followed California’s NIL legislation.

The briefs outline the serious concern the SEC has for the decision. Universities would be viewed as the employer while the conference would be deemed a joint employer if Johnson does succeed. Schools would have to pay athletes for their work, roughly the equivalent of what a work-study student would.

Breakdown of amicus brief regarding Johnson v. NCAA

The conference insisted in its brief that athletics should be categorized as an extracurricular activity, opposed to employment. “The overwhelming majority of colleges and universities,” the SEC’s amicus brief notes, “must subsidize intercollegiate sports from other revenue sources.”

The SEC and the 13 educational institutions warned in their briefs about the impact of a “uniform understanding.” If athletes are recognized as employees, it would go against a knowledge in courts that college sports should not be regarded as work. The Seventh and Ninth Circuit courts have declined petitions to recognize college athletes as FLSA employees.

The SEC pointed towards a U.S. Department of Labor-issued Field Operations Manual Handbook in its brief. This manual is not the final law, but it has served as an internal handbook for agency employees. The handbook instructs that “college athletes who participate in activities generally recognized as extracurricular are generally not considered to be employees.” Participation in “intramural and intercollegiate athletics” should also not be considered as “work” within the context of the FLSA.

If the Third Circuit agrees with the district court, the case would go back to district court to decide the issue of whether a college athlete is an employee under FLSA. A final decision is years away from happening.

If the Third Circuit reverses the decision, the case could come to an end. But the plaintiffs could appeal to the Supreme Court. Yet, the Supreme Court has the option to not hear the case.

What paying college athletes could look like

While the SEC makes the case many universities would not be able to afford this, the cost of paying players may not be exorbitant, relative to many SEC members’ athletic department budgets and projected increases in the value of media rights. Work-study students are typically paid via financial aid and also work part-time.

Johnson lead counsel Paul McDonald hypothesized to Sportico what a pay-to-play structure could look like. If athletes are paid $25 an hour, they would earn $500 a week. The thinking follows the NCAA’s 20-hour per week limit. Theoretically, athletes would make $2,000 a month during a four- or five-month season.

NIL is a workaround for athletes to receive financial compensation from third parties for the brand they built while in college, which can obviously benefit from their accomplishments on the field. Players can profit off endorsements, signing autographs, selling apparel, corporate partnerships, charitable appearances, teaching camps and starting their own businesses, among other things. They can also hire professional service providers for NIL activities.