Protection for Play: Student-Athletes and the Renewed Fight for Workers’ Compensation Benefits

Credit: Injured Workers Pharmacy

The National Collegiate Athlete Association (“NCAA”) has a longstanding history of denying employment-related benefits to student-athletes.  Student-athletes have never been able to claim employment status at the university they attend. Accordingly, injured student-athletes have traditionally been unable to make a claim for workers’ compensation benefits.  The theory and rationale behind denying student-athletes employment status at the university they attended is based on the idea of amateurism.  The amateurism model in the NCAA has propped up antiquated ideas surrounding what constitutes a student-athlete and has lined the pockets of big-name schools with no return to those athletes who bring in billions of dollars in revenue each year.  Thus, the Supreme Court’s rebuke of amateurism in NCAA v. Alston has undercut the historical basis for denying employment status to student-athletes.  Because the model of amateurism has fallen, student-athletes may now qualify as employees.  If student-athletes become classified as employees, they may be eligible for workers’ compensation coverage.

What is Amateurism?

The NCAA has defined an amateur as someone who does not have a written or verbal agreement with an agent, has not profited above their actual and necessary expenses or gained a competitive advantage in their sport.  The NCAA operates as the watchdog for the amateurs as they regulate and control almost every aspect of their life.  As the amateurism model emerged, the NCAA discovered that they needed to further limit some policies on student-athlete employment status and payment.  Thus, the NCAA’s version of amateurism prohibited financial remuneration to student-athletes and precluded student-athletes with professional experience.  This policy was apparently motivated by university administrators and professors who began to recognize the goodwill created by athletic victories, which translated into larger student enrollment.  The profit-making scheme was then pushed forward at rapid speed with players’ rights left behind.  The NCAA has argued that limitations surrounding student-athlete benefits help preserve amateurism because it evidently drives consumer demand.  The rationale behind this scheme is purportedly to establish a strong divide between amateurs and professional athletes–the biggest difference being that the professionals are paid.  The NCAA alleges that viewers of college sports watch these sports because the players are amateurs.  Thus, in order to retain the amateurism model, student-athletes cannot be compensated.  The NCAA asserts that amateurism is its product.  Thus, in Alston, the main contention was that the NCAA was going to lose its “product” once the Court redefined the limitations.  The “product” was not lost–college sports remain and student-athletes may now receive monetary benefits.  Competition is high and viewers continue to support college sports week in, week out.  The NCAA has often referred to the amateurism model as a “revered tradition” and thus should be upheld.  However, the nature of amateurism has changed over the last few decades.  Specifically, the amateurism rationale has limited student-athletes’ abilities to be considered employees and has limited their ability to receive workers’ compensation.

How Alston Changed the Game

Amateurism has limited student-athlete rights for decades.  The NCAA manufactured the amateurism model in an effort to restrict its duties to provide for student-athletes.  However, one case significantly changed the arc of history as it pertains to student-athlete rights: NCAA v. Alston reshaped collegiate sports overnight.

In NCAA v. Alston, the Supreme Court held some of the limitations the NCAA had placed on student-athletes were a violation of federal antitrust laws.  The Court struck down rules that limited scholarships for graduate or vocational schools, payments for academic tutoring, or paid post-eligibility internships.  The rationale for limiting these types of student-athlete benefits has always hinged on the idea that student-athletes should not reap the same benefits that professional athletes might because the NCAA supports amateur sports.  Therefore, amateurism is essentially the NCAA’s system of rules that attempt to distinguish college athletes from professional athletes by denying the former opportunities for compensation.

Notably, in the opinion written by Justice Gorsuch, he commented on the stark difference in the money-making ability of the NCAA and student-athletes, “those who run this enterprise profit in a different way than the student-athletes whose activities they oversee.  The president of the NCAA earns nearly $4 million per year.” Not to mention the salaries of coaches, assistants, directors, and other workers.  Therefore, when the court found the violation of the federal antitrust laws, the skepticism around amateurism as a whole was heightened.  Now, student-athletes can make endorsement deals and receive a broader range of education-related benefits.  The rebuke of amateurism changed the nature of college athletics considerably and now the NCAA cannot limit student-athletes ability to receive certain education-related benefits.

Unfortunately, the Supreme Court did not define what constitutes an education-related benefit.  The district court broadly defined education-related benefits by providing examples such as “scholarships for graduation or vocational schools, payments for academic tutoring, or paid post-eligibility internships.”  The district court then ruled that the way the NCAA has placed limitations on such education-related benefits is a violation of federal antitrust law, with which the Supreme Court vehemently agreed.  However, the Supreme Court granted the NCAA considerable leeway by allowing it to redefine what constitutes an education-related benefit, “the NCAA and its members could agree on rules regulating how conferences and schools go about providing these education-related benefits.”  The Alston case did not open a wide door for direct cash payments to student-athletes, but it did allow for student-athletes to receive computers, attend study abroad programs, and additional on-campus resources.  However, while there are no direct cash payments to student-athletes by the university they attend, most notably, Alston allowed for third-party endorsement deals for student-athletes.  One such example, Hercy Miller–a freshman at Tennessee State–signed a two-million-dollar endorsement deal before he even played a collegiate-level basketball game.

Due to Alston and the fall of amateurism, the NCAA must adapt to granting more rights and benefits along with the title of student-athlete.  One possible benefit may include the employment status of student-athletes.

Student Athletes as Employees

Student-athletes have never been considered employees of the university they attend.  After all, the NCAA manufactured the term “student-athlete,” to delineate a separation between students and employees.  However, the rationale that has supported this idea for decades was the concept of amateurism.  Student-athletes might be considered employees of the university they attend because the justification for limiting employment status no longer has footing and because student-athletes can meet the test for employment under certain state statutes.

Impact of Alston on Employment Status

The argument surrounding whether student-athletes are employees is not novel.  Student-athlete advocates have been fighting for employment status because it provides additional benefits for student-athletes.  Those benefits include the potential to be eligible for workers’ compensation coverage.  However, one hindrance is that student-athletes, even post-Alston, are still not able to be salaried or receive direct cash payments from their university.

Historically, student-athletes were not considered employees of the university they attend.  Students have asserted their personal testimony to show how they function as traditional employees on their respective campuses.  Arguments that trace the everyday life of a student-athlete and demonstrate their various workloads tend to show that student-athletes spend more time than their professors doing “work” related activities (game day, practices, weightlifting, team dinners, etc.).  However, courts have been slow to adopt students’ arguments, largely because of NCAA governance.

Now that Alston has rebuked the amateurism model, the conversation around student-athlete employment status has reopened.  It is important to note that traditional colleges and universities offer student-athletes scholarships.  Student-athletes receive team gear, meal stipends, and other types of direct payment forms but not cash-in-hand benefits.  However, military academies do not offer scholarships but pay their student-athletes a salary each month.  While there are no direct cash payments allowed, it is entirely possible that once student-athletes are deemed to be employees of the university they attend, direct cash payments could become the norm in collegiate sports.

Workers’ Compensation Test for Employment

The NCAA’s current insurance policies are unsustainable and antiquated because student-athletes are typically only allowed benefits during the term of their scholarship.  When non-scholarship participating student-athletes are injured, they may be faced with high out-of-pocket expenses.  While the NCAA has a catastrophic injury plan, it covers only limited injuries and does not require a college or university to provide coverage for additional types of injuries.[1]

Additionally, it is important to note that some injury insurance policies already exist within the NCAA.  However, this injury insurance is a luxury, only afforded to larger-than-life college athletic figures. Super-star athletes have a choice to choose between two different types of disability insurance: Exceptional Student Disability Insurance and Loss-of-Value insurance.  Because the insurance market already exists, and the infrastructure is already present within college sports, expanding the market of injury insurance for student-athletes is an enticing idea for business entities that deal with these forms of insurance.  Moreover, only allowing a handful of student-athletes to be covered with this specific type of insurance seems to demonstrate that the NCAA only values those athletes that bring in money.  Thus, workers’ compensation insurance should be extended to those student-athletes that will not be pursuing a professional career as a form of protection from the very institution they are a part of.

In North Carolina, to be eligible for workers’ compensation coverage, there must be an employer-employee relationship established.  In addition, there must be some form of employment.  In regard to the universities and colleges in which student-athletes attend, in a post-Alston world, this analysis is imperative for determining the employment status of college athletes.

Before analyzing the impact of Alston, definitions are necessary to help further define this type of employer-employee relationship.  Beginning with what constitutes employment status, the statute defines employment as “all private employments in which three or more employees are regularly employed in the same business or establishment.”

There are three or more student-athletes associated with universities or colleges in every team so clearly, universities and colleges will meet this test.  Here, the contention is whether student-athletes are regularly employed.  This area of the law may be litigated in North Carolina but between practices, appearances, weightlifting, the regular season, and conference championships, it is evident that student-athletes are not seasonal employees.  Thus, student-athletes should adequately meet the test for employment.

Second, the term, “employer” is defined as the State and all political subdivisions thereof, all public and quasi-public corporations therein, and every person carrying on any employment.  This provision is extremely important because it allows public colleges and universities to be included in the employer category.  Therefore, there is no limitation placed on what type of colleges or universities (public or private) can operate as an employer for the sake of student-athlete employment status.

Third, realizing who constitutes an employee is important in understanding employment status.  Employees are defined as “every person engaged in an employment under any appointment or contract of hire or apprenticeship, express or implied, oral or written, including aliens, and also minors, whether lawfully or unlawfully employed.”  Here, student-athletes would fall under the appointment status.  Currently, there are no contracts for hire in the NCAA (however, that may change rapidly).  However, under the lens of appointment, student-athletes are given a special status, express as they sign letters of intent or announce full scholarship offers to play at the university of their choosing.  This definition appears as it should logically extend to student-athletes because of the scouting, recruiting, and signing process college athletes are engaged in.

To be deemed an employee for the sake of workers’ compensation coverage in North Carolina, there is an eight-factor test that considers whether prospective employees are independent contractors or whether they are employees.  Those eight factors include an analysis of whether the person claiming coverage was (1) engaged in an independent business, calling, or occupation, (2) is to have the independent use of a special skill; knowledge or training in the execution of the work, (3) is doing a specific piece of work at a nice price or for a lump sum or upon a qualitative basis, (4) is not subject to discharge because he or she adopt some method of doing the work rather than another, (5) is not in the regal employ of the other contracting party, (6) is free to use such assistants as he or she may think proper, (7) has full control over such assistants and, (7) selects his or her own time.

On the surface, many of the factors weigh against the idea that student-athletes are independent contractors.  Specifically, collegiate athletes are not engaged in independent business; doing the work for a lump sum; are in the regular employ of the school; are unable to use assistants; have no control over such assistants; and certainly do not select their own time.  While no factor is dispositive, courts will examine these factors to help aid in their decision regarding employment status.

Conclusion

The collapse of the amateurism model has a significant impact as it pertains to the employment status of student-athletes.  As demonstrated above, without amateurism, the theory for denying employment status to student-athletes is on loose footing.  Thus, student-athletes may meet the test for employment and establish an employer-employee relationship under certain state statutes, including North Carolina.  Therefore, student-athletes should be entitled to the benefits that come with being an employee at the university they attend.

[1] Frank P. Tiscione, College Athletics and Workers’ Compensation: Why the Courts Get It Wrong in Denying Student-Athletes Workers’ Compensation Benefits When They Get Injured, 14 Sports L.J. 137 (2007).

Savannah Putnam
About Savannah Putnam (1 Articles)
Savannah Putnam is a third-year law student at Campbell University School of Law. Savannah is from Morganton, North Carolina. She earned her undergraduate degree from The University of North Carolina at Chapel Hill, where she majored in Political Science and Interpersonal Communications and minored in History. Savannah's legal interests reside in NCAA compliance litigation, workers' compensation, and employment law. Savannah loves to cheer on the Tarheels and always enjoys a good western-style barbecue sandwich.