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No.

16-1558
IN THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
GILLIAN BERGER and TAYLOR HENNIG,
on their own behalf and on behalf of similarly situated persons
Plaintiff-Appellants
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, a/k/a the NCAA, and
certain NCAA Division I Member Schools, in their respective incorporated names or
in the name of their respective Boards of Regents/Trustees i
Defendant-Appellees.
Appeal from the United States District Court
for the Southern District of Indiana, Indianapolis Division
Case No. 1:14-CV-1710
The Honorable William T. Lawrence
BRIEF AND SHORT APPENDIX OF PLAINTIFF-APPELLANTS

Paul L. McDonald
P L MCDONALD LAW LLC
1800 JFK Boulevard, Suite 300
Philadelphia, PA 19103
(267) 238-3835
Counsel for Plaintiff-Appellants

Defendant-Appellee NCAA Division I Member Schools, including private and


semi-public schools not immune to this federal lawsuit under the Eleventh Amendment,
are listed in the Short Appendix. A. 1-3.
i

DISCLOSURE STATEMENT
Pursuant to Fed. R. App. P. 26.1 and Cir. R. 26.1, the undersigned counsel for
Plaintiff-Appellants state:
1. The full names of every party that the undersigned attorneys represent in
this case are:
Gillian Berger
Taylor Hennig
2. The names of all law firms whose partners or associates have appeared for
the parties in the case or are expected to appear for the parties in this court are:
Paul L. McDonald
P L MCDONALD LAW LLC
1800 JFK Boulevard, Suite 300
Philadelphia, PA 19103
(267) 238-3835
3. The parent corporations and any publicly held companies that own 10 percent
or more of the stock of the parties represented by the undersigned attorneys: n/a.
Respectfully submitted,
s/ Paul L. McDonald
Paul L. McDonald
P L MCDONALD LAW LLC
Counsel for Plaintiff-Appellants

ii

TABLE OF CONTENTS
TABLE OF AUTHORITIES .... v
JURISDICTIONAL STATEMENT .......1
STATEMENT OF THE ISSUES 2
STATEMENT OF THE CASE .... 3
I.

Statement of Facts 6

SUMMARY OF THE ARGUMENT .. 6


ARGUMENT .... 9
I.

Standard of Review for All Issues on Appeal ... 9

II.

The Primary Beneficiary Test articulated by the Second Circuit


in Glatt v. Fox Searchlight Pictures sets forth proper employee criteria
for students under the FLSA, differentiating academic or educational
experiences from compensable work ...................................... 9

III. There is No Amateurism Exception to the FLSA ... 13


IV. DOL Field Operations Handbook 10b03(e) refers to student-run
groups which are independently run by students with minimal, or no,
involvement by college staff, but not to activities which are strictly
supervised by full-time college staff employed to so supervise and
from which the college derives immediate, meaningful benefit
e.g., work study or NCAA-regulated sports ..... 17
V.

Employee Status under the FLSA is a fact-intensive inquiry and is


not ripe for determination, before discovery, on a motion to dismiss ... 27

VI. Defendants operating bylaws, cited in the Amended Complaint and


thoroughly discussed in the Opposition to Motions to Dismiss, and
reasonable inferences drawn from their bylaws, are properly
incorporated into the Amended Complaint .. 28
VII. Joint Employment under the FLSA is a fact-intensive inquiry and is
not ripe for determination, before discovery, on a motion to dismiss ... 35
CONCLUSION ... 37

iii

CERTIFICATE OF COMPLIANCE ... 38


STATEMENT CONCERNING ORAL ARGUMENT .... 39
CERTIFICATE OF SERVICE .. 40
CIRCUIT RULE 30(d) STATEMENT .. 41
SHORT APPENDIX
List of Defendant-Appellee NCAA Division I Member Schools ... A. 1
Plaintiffs Amended Complaint (R. 119, 3/18/15) ....A. 4
Entry on Motions to Dismiss and Related Motions (R. 238, 2/16/16) A. 28

iv

TABLE OF AUTHORITIES
CASES
ABN Amro, Inc. v. Capital Intl Ltd.,
No. 04 C 3123, 2007 U.S. Dist. LEXIS 19601 (N.D. Ill. Mar. 16, 2007) . 29
Aguilar v. United Floor Crew,
No. 14-CIV-61605, 2014 U.S. Dist. LEXIS 166468 (S.D. Fla. Nov. 26, 2014) .... 36
Alexander v. Stratus Bldg. Sols.,
No. 4:14 CV 921 CDP, 2014 U.S. Dist. LEXIS 164194 (E.D. Mo. Nov. 24, 2014) . 28
Bannon v. Edgewater Med. Ctr.,
406 F. Supp. 2d 907 (N.D. Ill. 2005) .... 29
Blanchar v. Std. Ins. Co.,
736 F.3d 753 (7th Cir. 2013) ... 27-28
Cole v. U.S. Capital, Inc.,
389 F.3d 719 (7th Cir. 2004) ... 9
Dawkins v. Picolata Produce Farms, Inc.,
No. 3:05-CV-559, 2005 U.S. Dist. LEXIS 28789 (M.D. Fla. Nov. 15, 2005) .... 36
Defender Sec. Co. v. First Mercury Ins. Co.,
803 F.3d 327 (7th Cir. 2015) ... 8, 29, 35
Diaz v. U.S. Century Bank,
No. 12-21224-CIV, 2012 U.S. Dist. LEXIS 116877 (S.D. Fla. Aug. 20, 2012) .... 36
Glatt v. Fox Searchlight Pictures, Inc.,
791 F.3d 376 (2d Cir. 2015),
modified, 2015 U.S. App. LEXIS 22977 (2d Cir. Jan. 25, 2016) iii, 2, 6, 8-11, 13, 26-28
Glatt v. Fox Searchlight Pictures Inc.,
293 F.R.D. 516 (S.D.N.Y. 2013),
vacated in part on other grounds, 791 F.3d 376 (2d Cir. 2015) .... 13
Goodrich v. Covelli Family Ltd. Pship,
No. 8:11-CV-1715, 2012 U.S. Dist. LEXIS 36363 (M.D. Fla. Mar. 19, 2012) .... 36
Lee v. City of Chicago,
330 F.3d 456 (7th Cir. 2003) ...... 9
Love v. JP Cullen & Sons, Inc.,
779 F.3d 697 (7th Cir. 2015) . 17
v

Miller v. Advanced Studies, Inc.,


635 F. Supp. 1196 (N.D. Ill. 1986) ...... 27
NCAA v. Bd. of Regents of Univ. of Oklahoma,
468 U.S. 85, 104 S. Ct. 2948, 82 L. Ed. 2d 70 (1984) 15-16
North American Soccer League v. NLRB,
613 F.2d 1379 (5th Cir. 1980) .. 34
OBannon v. NCAA,
802 F.3d 1049 (9th Cir. 2015) ... 16, 31
OBannon v. NCAA,
7 F. Supp. 3d 955 (N.D. Cal. 2014),
affd in part and revd in part, 802 F.3d 1049 (9th Cir. 2015) ..... 14, 31
S. Ind. Gas & Elec. Co. v. United States,
No. EV 77-33-C, 1978 U.S. Dist. LEXIS 7053 (S.D. Ind. Dec. 22, 1978) .. 17
Schuman v. Collier Anesthesia, P.A.,
803 F.3d 1199 (11th Cir. 2015) ... 11, 28
Skidmore v. Swift & Co.,
323 U.S. 134, 65 S. Ct. 161, 89 L. Ed. 124 (1944) ... 7, 24
Tony & Susan Alamo Found v. Secy of Labor,
471 U.S. 290, 105 S. Ct. 1953, 85 L. Ed. 2d 278 (1985) .... 13
Vanskike v. Peters,
974 F.2d 806 (7th Cir. 1992) ... 11-12
Villareal v. El Chile, Inc.,
776 F. Supp. 2d. 778 (N.D. Ill. 2011) ..... 35
STATUTES
Fair Labor Standards Act,
29 U.S.C. 201 et seq. (2007) ..... iii, 1-16, 23, 25-28, 35-36, 39
Federal question,
28 U.S.C. 1331 (1980) 1
Final decision of district courts,
28 U.S.C. 1291 (1982) ....... 1
Circuits in which decisions reviewable,
28 U.S.C. 1294 (1982) ........... 1
vi

JURISDICTIONAL STATEMENT
On March 18, 2015, Plaintiffs filed an Amended Complaint in the district
court alleging, inter alia, that Defendants National Collegiate Athletic Association
(NCAA) and certain NCAA Division I Member Schools had jointly agreed to adopt
operating bylaws, and engage in patterns and practices, that misclassified Plaintiffs
and similarly situated NCAA Division I student athletes as unpaid labor, rather
than employees entitled to compensation under the Fair Labor Standards Act,
29 U.S.C. 201 et seq. (FLSA). A. 4-27, Am. Compl. (R. 119). 1
The district court had jurisdiction pursuant to 28 U.S.C. 1331 and 29 U.S.C.
216(b).
On February 16, 2016, the district court granted the defendants motions to
dismiss Plaintiffs Amended Complaint. A. 28-46, Entry on Mots. to Dismiss and
Related Mots. (Op.) (R. 238, 239).
Pursuant to Fed. R. App. P. 4(a)(1), Plaintiff-Appellants timely filed a Notice
of Appeal on March 14, 2016. (R. 240).
This Court has jurisdiction over this appeal pursuant to 28 U.S.C. 1291
and 1294.

Citations to the Appendix are in the form A. __. Counsel affirms that all materials
required by Cir. R. 30(a) and (b) are included in the required Short Appendix bound with
Plaintiff-Appellants Brief, A. 1-46. A Separate Appendix is also submitted, A. 47-387.
1

Citations to the record are in the form R. __, and refer to docket numbers in the
district court as designations of record on appeal had not been completed before filing of
Plaintiff-Appellants Brief. Subsequent citations to a document in the record use either the
full title or abbreviated, common form.

STATEMENT OF THE ISSUES


I.

Does the Primary Beneficiary Test articulated by the Second Circuit in


Glatt v. Fox Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir. 2015),
modified, 2015 U.S. App. LEXIS 22977 (2d Cir. Jan. 25, 2016) set forth
proper employee criteria for students under the FLSA, differentiating
academic or educational experiences from compensable work?
Plaintiff-Appellants submit that the answer is, Yes.

II.

Is there an Amateurism Exception to the FLSA, although the FLSA


does not permit a person meeting employee criteria to waive entitlement
to wages, and an Amateurism Exception is neither enumerated
nor defined in the FLSA?
Plaintiff-Appellants submit that the answer is, No.

III.

If the sine qua non of an Employer-Employee Relationship is exercise of


control by the putative employer, does it stand to reason that U.S.
Department of Labor Field Operations Handbook 10b03(e) (10/20/93)
refers to student-run groups e.g., dramatics, publications and glee clubs
or intramural and interscholastic club sports which are independently
run by students with minimal, or no, involvement by college staff, but not
to activities which are strictly supervised by full-time college staff
employed to so supervise and from which the college derives immediate,
meaningful benefit e.g., work study or NCAA-regulated sports?
Plaintiff-Appellants submit that the answer is, Yes.

IV.

Is Employee Status under the FLSA a fact-intensive inquiry such that


grant of a motion to dismiss, before discovery, is premature?
Plaintiff-Appellants submit that the answer is, Yes.

V.

If a document ratified by defendants, e.g., operating bylaws, is cited in


the Complaint and thoroughly discussed in the Opposition to Motion to
Dismiss, are defendants document, and reasonable inferences drawn
from it, incorporated into the Complaint?
Plaintiff-Appellants submit that the answer is, Yes.

VI.

Is Joint Employment under the FLSA a fact-intensive inquiry such that


grant of a motion to dismiss, before discovery, is premature?
Plaintiff-Appellants submit that the answer is, Yes.

STATEMENT OF THE CASE


On March 18, 2015, Plaintiffs filed an Amended Complaint, on their behalf
and on behalf of similarly situated NCAA Division I student athletes, alleging that
the application of criteria for determining student employee status under the FLSA
demonstrates that NCAA Division I student athletes are properly classified as
college employees much as student participants in work study programs are
classified as college employees. A. 4-27.
The Amended Complaint noted, inter alia, that both student participants in
work study programs and NCAA Division I student athletes engage in performance
that is non-academic, not related or otherwise relevant to any academic degree, and
for no academic credit. Indeed, in recognition that participation in work study or
NCAA-regulated sports could impede acquiring a quality education, both programs
purport to limit weekly participation to 20 hours of supervision by college staff, and
both programs require college staff to maintain timesheets to monitor weekly hours
of supervised participation. In fact, by comparison to students in work study,
NCAA Division I student athletes perform longer, and more rigorous, hours in
preparation for, and participation in, NCAA-regulated contests, and student athletes
are more strictly supervised by full-time, well-paid college staff, responsible not only
to coach but also to comply with a myriad of byzantine NCAA bylaws. See, e.g.,
A. 15-18, Am. Compl. 46-53.
The Amended Complaint also noted that both work study programs and
NCAA-regulated sports confer immediate, meaningful benefits upon colleges,

although benefits from NCAA-regulated sports inextricably linked to school identity


and spirit are unrivaled, including shares of multi-million dollar broadcasting and
licensing agreements and use in promotional and fundraising appeals to prospective
and current students, alumni and supporters. A. 12, 18, Am. Compl. 21, 54.
The Amended Complaint further distinguished NCAA-regulated sports and
work study from student-run groups that have no employer-employee relationship
to colleges, e.g., dramatics, publications and glee clubs or intramural and
interscholastic club sports, noting, inter alia, that student-run groups are
independently run by students with minimal, or no, involvement by college staff,
but both work study and NCAA-regulated sports are strictly supervised by full-time
college staff employed to so supervise. A. 20-21, Am. Compl. 61-65.
Defendants moved to dismiss alleging, inter alia, that NCAA-regulated sports
must be treated the same under the FLSA as student-run groups lacking an
employer-employee relationship; that NCAA-defined amateurism rules precede or
abrogate federal protections under the FLSA, including entitlement to wages; and
that Plaintiffs lacked standing to also bring suit on behalf of similarly situated
NCAA Division I student athletes attending colleges other than the University of
Pennsylvania (Penn), where the Plaintiffs matriculated.
In response to defendants standing objection, Plaintiffs further elaborated
upon their theory of joint employment under the FLSA in an opposition to dismissal
filed June 11, 2015. Plaintiffs cited, and thoroughly discussed, NCAA bylaws that
set forth defendants joint agreement to share control of the student athlete

talent pool, and of the terms and conditions of student athlete participation in
NCAA-regulated sports. NCAA bylaws restrict defendant unilateral discretion in
recruiting student athletes, and in determining the eligibility, compensation,
supervision, term of participation, and discipline of student athletes, under the
threat of substantial competitive and financial penalties. A. 68-76, Pls. Mem. in
Oppn to Defs. Mots. to Dismiss and Strike, at 22-30. (R. 212).
Plaintiffs also noted that there is no amateurism exception to the FLSA, and
demonstrated that application of criteria for determining student employee status
under the FLSA points to these results: student-run group participants, no;
teaching assistants, no; residential advisers, no; work study participants, yes;
and NCAA student athletes, yes. A. 56-63, Pls. Mem. in Oppn to Defs. Mots. to
Dismiss and Strike, at 10-17.
Plaintiffs submitted supplemental authority regarding the proper test for
determining student employee status under the FLSA on July 6, 2015. A. 82-86,
Pls. Notice of Supplemental Authority. (R. 213)
On February 16, 2016, the district court granted the motions to dismiss,
concluding, inter alia, that Plaintiffs had not sufficiently plead, or elaborated upon,
a joint employment theory to have standing to sue on behalf of similarly situated
NCAA Division I student athletes attending colleges other than Penn, and that a
purported economic reality of NCAA-defined amateurism precludes a finding of
student athlete employee status under the FLSA as a matter of law. A. 28-46.
Plaintiffs filed a timely Notice of Appeal on March 14, 2016.

I.

Statement of Facts
There is no factual record, here, because there has been no discovery.

Indeed, as discussed, infra, it is well-settled that the central issues in this case
employee status and joint employment are both fact-intensive inquiries, and,
therefore, neither were ripe for determination upon defendants motions to dismiss.
In lieu of a factual record, Plaintiff-Appellants incorporate, by reference, the
Statement of the Case, supra, including citations to the Amended Complaint and
Plaintiffs briefing cross-referenced to the Appendix (including the Short Appendix
and Separate Appendix).
SUMMARY OF ARGUMENT
The district court erred in six respects, each supporting Plaintiff-Appellants
requests that this matter be remanded for further proceedings, with instructions.
First, the district court did not apply the proper test for determining student
employee status under the FLSA: the primary beneficiary test articulated by the
Second Circuit in Glatt v. Fox Searchlight Pictures, Inc., 791 F.3d 376 (2d Cir. 2015),
modified, 2015 U.S. App. LEXIS 22977 (2d Cir. Jan. 25, 2016), differentiating
academic or educational experiences from compensable work.
The district court favorably referred to the primary beneficiary test
articulated by the Second Circuit in Glatt. But the district court noted, there does
not appear to be any Seventh Circuit case on this precise issue.
In the absence of Seventh Circuit precedent for determining student employee
status, the district court relied upon a 24-year-old opinion declining to find an
employer-employee relationship between prisons and prisoners who work in prisons.
6

Students, of course, should not be deemed comparable to prisoners, who,


by their conduct, surrender certain legal rights and protections.
Second, instead of applying the proper test for determining student employee
status, the district court relied upon a purported economic reality of
NCAA-defined amateurism to preclude a finding of student athlete employee status
under the FLSA as a matter of law. But, the FLSA does not permit a person
meeting employee criteria, e.g., a primary beneficiary test, to waive its protections,
including entitlement to wages. Moreover, there is no amateurism exception either
enumerated or defined in the FLSA, let alone any incorporation into the FLSA of
NCAA-defined amateurism rules that historically have not been consistent in
content or application.
Third, instead of applying the proper test for determining student employee
status, the district court assumed the U.S. Department of Labor (DOL) has
considered Plaintiff-Appellants allegations, although there is no factual record of
any such consideration, let alone a record demonstrating, thoroughness evident in
[DOL] consideration, the validity of [DOL] reasoning [and] [DOL] consistency.
Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S. Ct. 161, 89 L. Ed. 124 (1944).
The district court also assumed that DOL inaction, thus far, in enforcing the
FLSA in the arena of NCAA-regulated sports is evidence of acquiescence to the
NCAA status quo, although DOL enforcement authority is discretionary, and the
DOL has often relied upon private litigants to develop factual records and enforce
the FLSA, as demonstrated in the rising tide of unpaid intern litigation.

The district courts internal inconsistencies regarding the deference it gives to


the DOL Field Operations Handbook (10/20/93) declining to defer to a known
DOL position regarding the test for student employee status in 10b11(b), but then
crediting assumed and unknown DOL considerations related to 10b03(e) after
acknowledging 10b03(e) is not dispositive further demonstrate the wisdom of the
Second Circuit in Glatt, declining to defer to the DOL Field Operations Handbook
and instead applying a primary beneficiary test that better reflects todays economy.
Fourth, employee status under the FLSA is a fact-intensive inquiry and,
therefore, was not ripe for determination, before discovery, on motions to dismiss.
Fifth, although the district court acknowledged, nothing prevents a plaintiff
opposing dismissal from elaborating on the complaint or even attaching materials to
an opposition brief illustrating the facts the plaintiff expects to be able to prove,
Defender Sec. Co. v. First Mercury Ins. Co., 803 F.3d 327, 335 (7th Cir. 2015), the
district court failed to indicate if it properly considered, and accepted as true,
Plaintiff-Appellants further, and thorough, elaboration in opposition to dismissal of:
(i) joint employment allegations, referencing defendants operating bylaws; and
(ii) the range of college supervision of activities, from student-run groups (minimal,
or no, involvement) to work study and NCAA-regulated sports (strict supervision by
full-time college staff employed to so supervise), relevant to evaluating student
employee status.
Sixth, joint employment under the FLSA is a fact-intensive inquiry and,
therefore, was not ripe for determination, before discovery, on motions to dismiss.

ARGUMENT
II.

Standard of Review for All Issues on Appeal


This Court, review[s] the district courts decision to grant a motion to

dismiss de novo . consider[ing] the allegations in the light most favorable to the
nonmoving party and tak[ing] all well-pleaded facts and allegations as true. Cole
v. U.S. Capital, Inc., 389 F.3d 719, 724 (7th Cir. 2004) (internal citations omitted).
The Complaint, should not be dismissed unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him to
relief. Id. Moreover, [t]he issue is not whether a plaintiff will ultimately prevail
but whether the claimant is entitled to offer evidence to support the claims. Id.;
see also Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003) (We review a
district courts decision to grant or deny a Rule 12(b)(1) motion to dismiss for lack of
standing de novo.)
III.

The Primary Beneficiary Test articulated by the Second Circuit


in Glatt v. Fox Searchlight Pictures sets forth proper employee
criteria for students under the FLSA, differentiating academic or
educational experiences from compensable work

In Glatt, the Second Circuit, after noting, in somewhat analogous contexts,


we have articulated a set of nonexhaustive factors to aid courts in determining
whether a worker is an employee for purposes of the FLSA, e.g., domestic workers
and independent contractors, then articulated a non-exhaustive set of
considerations to determine if a student intern is an employee under the FLSA:
1. The extent to which the intern and the employer clearly
understand that there is no expectation of compensation. Any
promise of compensation, express or implied, suggests that the
intern is an employee and vice versa.
9

2. The extent to which the internship provides training that would


be similar to that which would be given in an educational
environment, including the clinical and other handson training
provided by educational institutions.
3. The extent to which the internship is tied to the interns formal
education program by integrated coursework or the receipt of
academic credit.
4. The extent to which the internship accommodates the interns
academic commitments by corresponding to the academic
calendar.
5. The extent to which the internships duration is limited to the
period in which the internship provides the intern with beneficial
learning.
6. The extent to which the interns work complements, rather than
displaces, the work of paid employees while providing significant
educational benefits to the intern.
7. The extent to which the intern and the employer understand
that the internship is conducted without entitlement to a paid
job at the conclusion of the internship.
791 F.3d at 384.
Plaintiff-Appellants addressed the application of the primary beneficiary test
articulated by the Second Circuit in Glatt to the instant case:
Here, Plaintiffs maintain that regardless of the criteria
applied by this Court DOL Fact Sheet #71 or a primary
beneficiary test both work study participants and
student athletes are employees under the FLSA. In fact,
the Second Circuit primary beneficiary tests additional
reliance on educational aspects of the work performed its
integration into coursework, receipt of academic credit,
non-interference with academic commitments, and
provision of significant educational benefits further
supports Plaintiffs positions on student athlete employee
status and collective action. See Pls. Mem. in Oppn to
Defs. Mots. to Dismiss and Strike at 12-14 (referencing
common evidence that, [n]either work student
participant, nor student athlete, performance outside the

10

classroom is related to, promotes, or facilitates academic


studies, or is for academic credit, and NCAA Bylaws and
NCAA studies recognizing that athletic participation can
impede acquiring a quality education.)
Moreover, any test to determine employee status under the
FLSA requires a fact-bound inquiry, such that the relief
sought by Defendants is premature, at best.
A. 82-86, Pls. Notice of Supplemental Authority (emphasis in original).
The substance of the employee criteria articulated by the Second Circuit in
Glatt, differentiating academic or educational experiences from compensable work,
matter far more than if a student meeting such employee criteria is styled as an
intern; a work study participant engaged in clerical and technical support,
food service, maintenance, sales and customer service in college offices and
departments, libraries, dining halls, facilities and stores; or, as Plaintiff-Appellants
submit, a NCAA student athlete.
The district court favorably referred to the primary beneficiary test
articulated by the Second Circuit in Glatt, noting the Eleventh Circuit had adopted
this test in Schuman v. Collier Anesthesia, P.A., 803 F.3d 1199 (11th Cir. 2015).
A. 38-42, Op. at 11-15.
But the district court also noted that, there does not appear to be any
Seventh Circuit case on this precise issue, A. 41, Op. at 14, and did not apply the
primary beneficiary test.
In the absence of Seventh Circuit precedent articulating employee criteria for
students under the FLSA, the district court referenced a 24-year-old opinion, in
which, the Seventh Circuit examined the economic reality and determined that

11

prisoners working within a prison as part of their sentences are simply not
employees under the FLSA. A. 42, Op. at 15, citing Vanskike v. Peters, 974 F.2d
806, 808-9 (7th Cir. 1992).
The district court then concluded that a purported economic reality of
amateurism in college sports trumps the literal application of any test that might
point to a finding of employee status under the FLSA, quoting Vanskike, [t]he fact
that a literal application of the four-factor test would point to a different result was
not relevant because those factors fail to capture the true nature of the relationship
between a prison and the prisoners who work in it. Id.
NCAA student athletes, of course, should not be deemed comparable to
prisoners, who, by their conduct, surrender certain legal rights and protections. 2
This said, THE NEW YORK TIMES Book Review for Indentured: The Inside Story of
the Rebellion Against the NCAA, comments on the captive nature of student athlete labor:
2

As documented in Joe Nocera and Ben Strausss new book,


Indentured: The Inside Story of the Rebellion Against the
NCAA, [the NCAA] has lost its way so many times that it is now
the organization from which players need protection. The reason
is as simple as humanity itself: the collision of zealotry and
commerce. When (rich, white) men convince themselves that
(poor, black) athletes need to be shielded from the corrupting
influence of money, measures to keep them from it even as the
world of collegiate sports begins clearing more than $900 million
a year in revenue are not seen as plunder; they are seen as
noble, just and vital. That those men end up keeping so much of
that money for themselves? Hey, it has to go somewhere.
Thus, college sports grow ever more lucrative and the players
still are denied even basic compensation above scholarships,
which can be pulled for no reason and without explanation.
Nocera and Strauss explain how this was baked into the concept
of the N.C.A.A. in the first place.
Will Leitch, Indentured, by Joe Nocera and Ben Strauss, N. Y. TIMES, Feb. 16, 2016
(book review).

12

Moreover, for reasons discussed, infra, there is no amateurism exception to


the FLSA.
For the foregoing reasons, Plaintiff-Appellants respectfully request that
this Court vacate the district courts decision and remand, with instructions to
apply the primary beneficiary test articulated by the Second Circuit in Glatt in
further proceedings in this case.
IV.

There is No Amateurism Exception to the FLSA


It is well-settled that the FLSA does not permit a person meeting the

FLSAs employee criteria to waive the FLSAs protections, including her entitlement
to wages. See, e.g., Tony & Susan Alamo Found v. Secy of Labor, 471 U.S. 290, 301,
105 S. Ct. 1953, 85 L. Ed. 2d 278 (1985) ([T]he purposes of the Act require that it
be applied even to those who would decline its protections. If an exception to the
Act were carved out for employees willing to testify that they performed work
voluntarily, employers might be able to use superior bargaining power to coerce
employees to make such assertions, or to waive their protections under the Act.);
see also Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 534 (S.D.N.Y. 2013),
vacated in part on other grounds, 791 F.3d 376 (2d Cir. 2015) (citing Tony & Susan
Alamo Found for the proposition that while plaintiffs understood they would not be
paid . this factor adds little, because the FLSA does not allow employees to waive
their entitlement to wages.)

13

Moreover, there is no amateurism exception either enumerated or defined in


the FLSA, let alone any incorporation into the FLSA of NCAA-defined amateurism
rules that historically have not been consistent in content or application. 3
The district court, nonetheless, relied upon a purported economic reality of
amateurism in college sports, and the assumption that Plaintiff-Appellants can
voluntarily waive their entitlement to wages under the FLSA, for the district court
In their opposition to dismissal, Plaintiff-Appellants elaborated on District Judge
Claudia Wilkens findings after trial in OBannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal.
2014), affd in part and revd in part, 802 F.3d 1049 (9th Cir. 2015):
3

Regarding the NCAAs contention that its restrictions on


student athlete pay preserv[e] its tradition of amateurism,
Judge Wilken noted that NCAAs amateurism rules have not
been consistent in content or application. For example, in
1956, NCAA amateurism rules permitted cash for incidental
expenses as part of a full grant-in-aid. Id. at 974. In 1975,
the NCAA removed cash for incidental expenses from the
full grant-in-aid. Id. In 2013, the NCAA amended its
amateurism rules to permit different levels of compensation
for recruits in different sports:
The new rules permit Division I tennis recruits to earn
up to ten thousand dollars per year in prize money from
athletic events before they enroll in college. Other
Division I recruits, in contrast, remain barred from
receiving any prize money in excess of their actual and
necessary costs of competing in an event.
Id.
A. 66-67, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 20-21.
In fact, in addition to the exception that NCAA-defined amateurism rules carve out
to permit tennis recruits to be paid prize money before enrollment, NCAA-defined
amateurism rules also permit student athletes qualifying for, and competing in, the
Olympics to be paid stipends or prize money under the U.S. Olympic Committees
Operation Gold Grant program, including $25,000 for each gold medal, $15,000 for each
silver medal, and $10,000 for each bronze medal. See NCAA Division I Bylaw
12.1.2.1.4.1.2. Operation Gold Grant. NCAA-defined amateurism rules also permit some
student athletes to be paid as counselors in college sports camps or clinics. See NCAA
Division I Bylaw 12.4.3. Camp/Clinic Employment, General Rule.

14

to determine that Plaintiff-Appellants cannot be employees under the FLSA.


A. 42-43, Op. at 15-16.
This is plain error in a FLSA case.
In fact, the district courts claimed authority is an antitrust case, implicating
analyses, e.g., Rule of Reason, that are irrelevant in a FLSA case: NCAA v. Bd. of
Regents of Univ. of Oklahoma, 468 U.S. 85, 104 S. Ct. 2948, 82 L. Ed. 2d 70 (1984).
Not only are antitrust analyses in NCAA v. Bd. of Regents of Univ. of
Oklahoma irrelevant to this FLSA case, but the district courts suggestion that the
Supreme Court had conferred the imprimatur of law upon NCAA-defined
amateurism rules, or any NCAA-defined rule, is also unsupported by that decision.
NCAA-defined amateurism rules were not before the Supreme Court in that case.
The NCAA-defined rules that were before the Supreme Court NCAA restrictions
on television broadcasts of football games were found to violate antitrust law. See,
e.g., A. 63-67, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 17-21, 4

In their opposition to dismissal, Plaintiff-Appellants further explained, regarding


NCAA-defined amateurism rules, that the Supreme Court merely listed examples of rules
on which the competitors agreed to create and define the competition to be marketed:
4

As Judge Bork has noted: [Some] activities can only be


carried out jointly. Perhaps the leading example is
league sports . What the NCAA and its member
institutions market in this case is competition itself
contests between competing institutions. Of course, this
would be completely ineffective if there were no rules on
which the competitors agreed to create and define the
competition to be marketed. A myriad of rules affecting
such matters as the size of the field, the number of
players on a team, and the extent to which physical
violence is to be encouraged or proscribed, all must be
agreed upon, and all restrain the manner in which
institutions compete. Moreover, the NCAA seeks to
15

see also A. 382-387, Pls. Fourth Notice of Supplemental Authority (R. 236), for
further differentiation of consideration of amateurism in Rule of Reason analysis
under antitrust laws in OBannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015).
For the foregoing reasons, Plaintiff-Appellants respectfully request that
this Court vacate the district courts decision, and remand, with instructions that
NCAA-defined amateurism rules neither precede nor abrogate the requirements of
federal law under the FLSA, and are irrelevant in further proceedings in this case.
market a particular brand of football college football.
The identification of this product with an academic
tradition differentiates college football from and makes
it more popular than professional sports to which it
might otherwise be comparable, such as, for example,
minor league baseball. In order to preserve the
character and quality of the product, athletes must not
be paid, must be required to attend class, and the like.
And the integrity of the product cannot be preserved
except by mutual agreement; if an institution adopted
such restrictions unilaterally, its effectiveness as a
competitor on the playing field might soon be destroyed.
468 U.S. at 101-2.
.
The most charitable reading of the passage in context suggests
no more than the plain fact that Defendants are members of a
joint enterprise, Id. at 117, requiring uniform rules and not
permitting unilateral choice to insure that there is a level
playing field. For example, if all schools mutually agreed to
pay student athletes, or had to in order to comply with federal
law, then there would be no anti-competitive consequences.
But, if an institution adopted a restriction on student athlete
pay unilaterally, and other schools did not join in such
restriction, the institution adopting the restriction unilaterally
might see its effectiveness as a competitor on the playing field
destroyed, because of its self-imposed recruiting
impediment. Instead, all schools mutually agreed to the
current restriction on student athlete pay.
A. 64-65, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 18-19.

16

V.

DOL Field Operations Handbook 10b03(e) refers to student-run


groups which are independently run by students with minimal,
or no, involvement by college staff, but not to activities which are
strictly supervised by full-time college staff employed to so
supervise and from which the college derives immediate,
meaningful benefit e.g., work study or NCAA-regulated sports
It is well-settled that, the employers right to control is the most important

consideration in ascertaining the existence of an employer-employee relationship.


Love v. JP Cullen & Sons, Inc., 779 F.3d 697, 703 (7th Cir. 2015). If an employer
has the right to control and direct the work of an individual, not only as to the
result to be achieved, but also as to the details by which that result is achieved, an
employer/employee relationship is likely to exist. Id.; see also S. Ind. Gas & Elec.
Co. v. United States, No. EV 77-33-C, 1978 U.S. Dist. LEXIS 7053, at *19 (S.D. Ind.
Dec. 22, 1978) (the primary inquiry under the common law standards defining the
employer-employee relationship is who has the right to control and direct the
methods and means of accomplishing the assigned tasks.)
It is not surprising, then, that guidance in DOL Field Operations Handbook
10b03(e) refers to student-run groups, which are independently run by students
with minimal, or no, involvement by college staff, as not resulting in any
employee-employer relationship between student participants and the college, e.g.,
dramatics, student publications, glee clubs, bands, choirs, debating teams, radio
stations, intramural [] athletics.
10b03(e) also refers to interscholastic athletics. 5

DOL Field Operations Handbook 10b03(e) reads, in pertinent part:

17

Plaintiff-Appellants contend that it stands to reason that this reference to


interscholastic athletics is to student-run, interscholastic club sports, but not to
NCAA-regulated sports, which, as Plaintiff-Appellants allege, are more strictly
supervised by full-time, well-paid college staff than any other campus activities,
including work study which unquestionably results in an employee-employer
relationship between the work study participant and the college. See, e.g., A. 20-21,
Am. Compl. 61-65; see also A. 51-56, 58, Pls. Mem. in Oppn to Defs. Mots. to
Dismiss and Strike, at 5-10, 12.
THE NEW YORK TIMES described student-run, interscholastic club sports, and
differentiated them from NCAA-regulated sports, in the article, Rise of College
Club Teams:
In intercollegiate club sports, there are no athletic
scholarships, no adoring crowds and minimal adult
leadership.
Institutional financing is meager and hard work
abundant, with dozens of volunteer hours required from
the athletes just to put on a single game or match.

As part of their overall educational program, public or private


schools and institutions of higher learning may permit or
require students to engage in activities in connection with
dramatics, student publications, glee clubs, bands, choirs,
debating teams, radio stations, intramural and interscholastic
athletics and other similar endeavors. Activities of students in
such programs, conducted primarily for the benefit of the
participants as a part of the educational opportunities provided
to the students by the school or institution, are not work of
the kind contemplated by Sec 3(g) of the Act and do not result
in an employee-employer relationship between the student and
the school or institution.

18

Its college athletics without the pageantry or prerogative,


and thats the way athletes in club sports like it. They
devise the practices, make the team rules, decide whom to
play and when, raise the money for uniforms and game
officials, schedule the hotel and travel arrangements and
manage the paperwork .
The less restrictive nature of club teams has also been a
magnet for the thriving nontraditional sports market.
While many N.C.A.A. athletic departments are cutting
varsity sports, club teams are competing for national
championships in bass fishing, ballroom dancing and
Brazilian martial arts.
Because of this independent and inclusive spirit,
competitive club sports have emerged as an alternative to
the semiprofessional, regulated, commercial environment
of modern, elite college athletics .
The ability to balance ones academic, athletic and social
life is an apparent draw to the club sports model. Chip
Spear, a volunteer coach for the Yale water polo team,
said that one of his players was a member of the
Whiffenpoofs, Yales celebrated a cappella group.
He misses some practices for their engagements, said
Spear, who played water polo at Yale when it was still a
varsity sport. The team works it out because all
practices are not mandatory. Im not sure how that would
have worked on a varsity team. Students say they
sometimes choose a club sport (like sailing) for cultural or
lifestyle reasons or because it was not available in high
school (like Ultimate Frisbee).
In either case, the students shape and influence the
makeup and philosophy of the team, and tailor their
commitment to it.
College administrators said they put club sports in the
same category as student development.
Bill Pennington, Rise of College Club Teams Creates a Whole New Level of
Success, N.Y. TIMES, Dec. 2, 2008; see also A. 21, Am. Compl. 64; A. 54-55,
Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 8-9.
19

In fact, Defendant Penn includes interscholastic club teams in its directory of


student-run groups: Groups Online @ Penn. Interscholastic club teams listed under
Sports & Recreational, at the time Plaintiff-Appellants filed their opposition to
dismissal, included, among others: Club Golf, Club Tennis, Coed Club Swimming,
Latin and Ballroom Dance, Mens Club Lacrosse, Mens Club Soccer, Mens Club
Volleyball, Mens Ultimate Frisbee, Penn Badminton, Penn Boxing Club, Penn Club
Gymnastics, Penn Cycling, Penn Ping Pong, Penn Sailing, Penn Squash Club, Roller
Hockey Club, Womens Club Lacrosse, Womens Club Soccer, Womens Club
Volleyball, Womens Club Water Polo, and assorted Martial Arts clubs. 6 A. 54,
Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 8.
But, Defendant Penn does not include NCAA-regulated sports in its directory
of student-run groups. The reason seems as elementary as Sesame Street: one of
these things [NCAA-regulated sports] is not like the others [student-run groups].
NCAA-regulated sports more closely resemble work study programs, which
are strictly supervised by full-time college staff employed to so supervise and from
which the college derives immediate, meaningful benefit. 7
At the time Plaintiff-Appellants filed their opposition to dismissal, Defendant Penns
directory of student-run groups included 82 Arts groups (e.g., dramatics, glee clubs, bands
and choirs); 25 Media & Publication groups (e.g., publications and radio stations); two
(2) Instructional & Competitive debate teams; and 59 Sports & Recreational groups (e.g.,
intramural and interscholastic club athletics). See A. 52, Pls. Mem. in Oppn to Defs.
Mots. to Dismiss and Strike, at 6.
6

In their opposition to dismissal, Plaintiff-Appellants noted, Defendants tired refrain


that student athletes cannot be employees because they are also students ignores the
obvious: work study participants including work study participants receiving financial aid
or academic scholarships, and those not are both students and employees. A. 62, Pls.
Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 16 (emphasis in original).
7

20

Similar to work study in clerical and technical support, food service,


maintenance, sales and customer service in college offices and departments,
libraries, dining halls, facilities and stores student athlete performance outside the
classroom, and on practice and playing fields, is non-academic, not related or
otherwise relevant to any degree or academic program, and for no academic credit.
In recognition of the potential adverse impacts on student academic progress from
participation in work study and NCAA-regulated sports, both purport to limit weekly
supervised participation by college staff to 20 hours per week, and both require the
keeping of timesheets by college staff. See, e.g., A. 15-17, Am. Compl. 46-50; see
also A. 58-63, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 12-17.
In fact, NCAA-regulated sports are like work study programs, but on steroids.
The NCAA Growth, Opportunities, Aspirations and Learning of Students
(GOALS) Study (2010) indicated that self-reported total time commitment to
NCAA-regulated sports far exceeds 20 hours per week: Football FBS (43.3 hours
per week), Baseball (42.1 hours per week), Football FCS (41.6 hours per week),
Mens Basketball (39.2 hours per week), Womens Basketball (37.6 hours per week),
All Other Womens Sports (33.3 hours per week), and All Other Mens Sports
(32.0 hours per week). See A. 17, Am. Compl. 52.
Moreover, due to the greater rigors of preparation for, and participation in,
NCAA-regulated sports, and compliance with a myriad of byzantine NCAA bylaws
regulating student athlete eligibility and participation set forth in the 434-page

21

NCAA Division I Manual, student athletes are subject to much stricter supervision
by full-time college staff than work study participants. See A. 18, Am. Compl. 53.
For example, although there is no factual record here, because there has been
no discovery, Plaintiff-Appellants submitted the National Labor Relations Board
(NLRB) hearing testimony of former Northwestern University (Northwestern)
quarterback Theodis Kain Colter, In re Northwestern Univ. and College Athletes
Players Association (CAPA), Case No. 13-RC-121359, NLRB, Feb. 18, 2014
(Colter Test.). See Ex. B to Pls. Third Notice of Supplemental Authority (R. 230).
A. 87-381.
Colters testimony details Defendant Northwesterns rigorous control on and
off the field, year round, of student football athletes, and substantial responsibilities
and duties that student football athletes have to Northwesterns football program.
Colter describes a big operation of full-time, well-paid college staff supervising
student football athletes, including a head coach and more than 10 assistant coaches,
a separate strength and conditioning staff, and still more support staff. A. 130-134,
Colter Test. 62:21-66:8. Members of this college staff determine, and distribute,
official schedules that detail student football athletes daily duty to the program
throughout the year. A. 135-136, 154-155, Colter Test. 67:21-68:2, 86:25-87:15.
Student football athletes are not permitted to schedule academic classes that conflict
with their daily duties to the football program. A. 205-206, Colter Test. 137:3-138:2.
Football is the priority:

22

Everything that we do is scheduled around football, what


classes we can take, what major you could really participate
in. Its all depending on football and your schedule .
Due to the time demands, you cant ever reach your
academic potential. Youre merely just surviving. Theres
so much time demand towards football and being a great
football player that you have to sacrifice one, and were
not allowed to sacrifice football. So .
A. 234-240, Colter Test. 166:14-172:17.
Northwesterns student athlete handbook and athletic department policies
subject student athletes to stricter regulation of otherwise personal choices and
conduct than other students, including, among other things, college staff approval
(or disapproval) of student athlete speech and use of social network and media;
dress; residential leasing agreements; automobile leasing or purchase agreements;
and separate employment opportunities, e.g., work study. A. 218-223, 229-232, 260261, Colter Test. 150:11-155:16, 161:21-162:16, 163:21-164:6, 192:19-193:11.
Moreover, student athlete failure to comply with official policy or instructions
of Northwestern college staff could result in sanctions, including, but not limited to,
public or private reprimands, suspension from practice or competition, dismissal
from the program, and loss of athletic aid if applicable. A. 232-233, Colter Test.
164:15-165:14.
Still, in spite of all the foregoing, including the apparent recognition of
defendant colleges that NCAA-regulated sports are not in the same category as
student-run groups, see e.g., Groups Online @ Penn, defense counsel maintain that
10b03(e) must be interpreted to treat participation in NCAA-regulated sports the
same as participation in glee club for purposes of the FLSA.
23

For its part, the district court acknowledged that, 10b03(e) is not
dispositive of the issue of the existence of an employer-employee relationship
between colleges and NCAA student athletes. A. 44, Op. at 17.
Indeed, the district court noted, in declining to defer to 10b11(b) regarding
determination of employee status for trainees or students: 8
In Skidmore [v. Swift & Co., 323 U.S. 134 (1944)], the
Supreme Court established the rule that nonregulatory
guidelines of agencies such as the DOL, while not
controlling upon the courts by reason of their authority,
do constitute a body of experience and informed judgment
to which courts and litigants may properly resort for
guidance. The weight of such judgment in a particular
case will depend upon the thoroughness evident in its
consideration, the validity of its reasoning, its consistency
with earlier and later pronouncements, and all those
factors which give it power to persuade, if lacking power
to control. 323 U.S. at 140.
A. 38, Op. at 11 n.11.

The DOL replicated 10b11(b) guidance in DOL, Wage and Hour Div., Fact Sheet #71
(Apr. 2010):
8

1. the training, even though it includes actual operation of the facilities of the
employer, is similar to that which would be given in a vocational school;
2. the training is for the benefit of the trainees or students;
3. the trainees or students do not displace regular employees, but work under
their close observation;
4. the employer that provides the training derives no immediate advantages
from the activities of the trainees or students, and on occasion operations
may actually be impeded;
5. the trainees or students are not necessarily entitled to a job at the conclusion
of the training period; and
6. the employer and the trainees or students understand that the trainees or
students are not entitled to wages for the time spent in training.

24

Here, there is no factual record, demonstrating thoroughness evident in


[DOL] consideration, the validity of [DOL] reasoning [and] [DOL] consistency, to
contradict the Plaintiff-Appellants reasonable interpretation that the reference to
interscholastic athletics in 10b03(e) is to interscholastic club sports, run by
student participants, and not to NCAA-regulated sports in 1993, let alone the
big business of NCAA-regulated sports in 2016 which are strictly supervised by
full-time, well-paid college coaching staff and athletic department personnel and
from which the college derives immediate, meaningful benefit.
The district court, nonetheless, assumed, without more, that the DOL has
rejected Plaintiff-Appellants reasonable interpretation. A. 43-45, Op. at 16-18.
The district court further assumed that DOL inaction, thus far, in enforcing
the FLSA in the arena of NCAA-regulated sports is evidence of DOL acquiescence to
the NCAA status quo. A. 43, Op. at 16. This assumption, of course, ignores that
DOL enforcement authority is discretionary, and that the DOL has often relied
upon private litigants to develop factual records and enforce the FLSA, as
demonstrated in the rising tide of unpaid intern litigation. See, e.g., Kara Brandeisky
and Jeremy B. Merrill, How the Labor Department Has Let Companies Off the
Hook for Unpaid Internships, ProPublica, Apr. 9, 2014. 9

ProPublica reported:
[T]he Labor Department has not made enforcing its guidelines
for unpaid internships a priority .
Instead of proactively investigating employers that advertise
illegal internships, the department has decided to rely on
complaints even though the agency admits unpaid interns
25

To sum up, the district court declined to defer to a known position taken by
the DOL, i.e., that 10b11(b) ought to be applied to determine employee status for
trainees or students, but then credited assumed and unknown DOL considerations
related to 10b03(e) after acknowledging that 10b03(e) is not dispositive.
But, in the end, the district courts internal inconsistencies and assumptions
should be of little, or no, moment, because the Second Circuit in Glatt demonstrates
that the proper means for determining if there is an employer-employee relationship
under the FLSA is not to defer to the DOL Field Operations Handbook, which
guidance does not reflect todays economy, 10 but rather to apply developed facts to

are hesitant to complain, for fear of endangering their future


career prospects.
[The Wage and Hour Division] does not have a strategic
enforcement initiative focused on unpaid interns, a
department spokesman wrote. Our investigators focus on
industries such as construction, janitorial, agriculture, and
restaurants. That will continue to be our focus.
.
As the vice president of the Economic Policy Institute, [Ross]
Eisenbrey says he has pushed the Labor Department to root
out illegal internships by scrutinizing industries such as
fashion, media and film. But the agency has decided to expend
its resources elsewhere.
To be sure, the Labor Department has a finite amount of
resources. With only about 1,000 investigators, the agency
must monitor 7.3 million workplaces and enforce labor laws
that protect 135 million employees.
For example, the Second Circuit in Glatt stated, [b]y focusing on the educational
aspects of the internship, our approach [i.e., the primary beneficiary test] better reflects
the role of internships in todays economy than the DOL factors [from 10b11(b) of the
DOL Field Operations Handbook]. 791 F.3d at 385.
10

26

the employee criteria set forth in the primary beneficiary test articulated by the
Second Circuit in Glatt.
Here, a factual record has yet to be developed because there has been
no discovery. 11
For the foregoing reasons, Plaintiff-Appellants respectfully request that
this Court vacate the district courts decision, and remand, with instructions to apply
the primary beneficiary test articulated by the Second Circuit in Glatt, rather than
defer to, or make assumptions about, the DOL Field Operations Handbook, in
further proceedings in this case.
VI.

Employee Status under the FLSA is a fact-intensive inquiry and is


not ripe for determination, before discovery, on a motion to dismiss
It is well-settled that, no matter what test applies, a plaintiffs status as an

employee under [federal law] can be determined only upon careful analysis of the
myriad facts surrounding the employment relationship in question, that ordinarily
this cannot be done from the face of the complaint, and, thus, a motion to dismiss
should be denied as premature. Miller v. Advanced Studies, Inc., 635 F. Supp. 1196,
1200 (N.D. Ill. 1986) (emphasis in original); 12 see also Blanchar v. Std. Ins. Co., 736
This said, even at this preliminary stage before there has been discovery necessary
to apply to the employee criteria set forth in the primary beneficiary test, it seems apparent
that the ultimate application of this test to students on campus points to these results:
student-run group participants, no; teaching assistants, no; residential advisers, no;
work study participants, yes; and NCAA student athletes, yes. See, e.g., A. 56-63,
Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 10-17; see also A. 82-85,
Pls. Notice of Supplemental Authority.
11

The Miller court allowed for an extraordinary exception that did not apply in that
case, and does not apply in this case: unless the complaint happens to allege facts which
clearly preclude the possibility that the plaintiff is an employee. Id.
12

27

F.3d 753, 756 (7th Cir. 2013) (The evaluation of a FLSA claim requires a thorough,
fact-intensive analysis of the employees employment duties and responsibilities.);
Alexander v. Stratus Bldg. Sols., No. 4:14 CV 921 CDP, 2014 U.S. Dist. LEXIS
164194, at *1 (E.D. Mo. Nov. 24, 2014) ([T]he question of whether an employeremployee relationship exists is fact-intensive and cannot be determined at the
current stage in the proceedings. The motion to dismiss will be denied.)
Indeed, Glatt and Schuman were decided on appeal from summary judgment.
Here, again, a factual record has yet to be developed because there has been
no discovery.
For the foregoing reasons, Plaintiff-Appellants respectfully request that
this Court vacate the district courts decision, and remand, because the grant of
motions to dismiss, before development of a factual record, was premature.
VII.

Defendants operating bylaws, cited in the Amended Complaint


and thoroughly discussed in the Opposition to Motions to Dismiss,
and reasonable inferences drawn from their bylaws, are properly
incorporated into the Amended Complaint

Here, this mainly relates to the issue of joint employment, or the standing
that Plaintiff-Appellants, who attend(ed) Defendant Penn, have to sue on behalf of
fellow NCAA Division I student athletes attending other defendant schools.
The district court determined that Plaintiff-Appellants lacked such standing
because the legalese of joint employment is not used in the Amended Complaint.
A. 32, Op. at 5.
But, the Amended Complaint refers to defendants as having jointly agreed
on operating bylaws, i.e., NCAA Division I Bylaws, of which the defendants

28

cannot feign ignorance and from which, as discussed, infra, it is reasonable to draw
an inference of joint employment. See, e.g., A. 18, Am. Compl. 56.
These bylaws are referenced more than 40 times in the Amended Complaint.
In their opposition to dismissal, Plaintiff-Appellants noted:
The district court may also consider documents quoted or
cited in, and integral to, the Amended Complaint, or
subject to judicial notice as public documents. See, e.g.,
ABN Amro, Inc. v. Capital Intl Ltd., No. 04 C 3123, 2007
U.S. Dist. LEXIS 19601 at * 10-11, (N.D. Ill. Mar. 16,
2007) (in evaluating a Rule 12(b)6) motion to dismiss, a
district court may consider documents referred to in the
complaint and central to plaintiffs claim, and take
judicial notice of matters of public record); see also
Bannon v. Edgewater Med. Ctr., 406 F. Supp. 2d 907, 919
n.16 (N.D. Ill. 2005) (in resolving a motion to dismiss, a
district court is entitled to take judicial notice of matters
in the public record, including, for example, newspaper
and magazine articles).
A. 51, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 5 n.1.
Moreover, as the district court acknowledged, nothing prevents a plaintiff
opposing dismissal from elaborating on the complaint or even attaching materials to
an opposition brief illustrating the facts the plaintiff expects to be able to prove,
citing Defender Sec. Co., 803 F.3d at 335. A. 32-33, Op. at 4-5.
In fact, in their opposition to dismissal, Plaintiff-Appellants elaborated on
their joint-employment theory, thoroughly referencing and discussing NCAA bylaws
setting forth the defendants joint agreement to share control of the student athlete
talent pool, and of the terms and conditions of student athlete participation in
NCAA-regulated sports, including NCAA bylaws that:

29

restrict defendant unilateral discretion in recruiting, see A. 70-71,


Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 24-25; 13

13

In their opposition to dismissal, Plaintiff-Appellants noted:


Separate and distinct employers do not, and arguably cannot,
restrict each others activities related to recruiting talent .
Defendants, by mutual agreement, impose upon each other
restrictions on permissible recruiting contacts and periods.
For example, Contacts, defined as any face-to-face encounter
with a prospective student athlete regardless of whether any
conversation occurs, are strictly limited. See NCAA Division I
Bylaws 13.02.4 and 13.1.5. So too are Evaluations, defined as
any off-campus activity designed to assess the academic
qualifications or athletics ability of a prospective studentathlete. See NCAA Division I Bylaws 13.02.7 and 13.1.7. Even
telephone calls. See, e.g., NCAA Division I Bylaw 13.1.3.1.8 .
Contacts, Evaluations and telephone calls are further restricted
by, or to, agreed upon Periods of Recruiting Activities .
NCAA Division I Bylaw 13.02.5 .
Other than non-compete or non-disclosure, there are no
restrictions preventing a separate and distinct employer from
recruiting lateral talent from another, and immediately deploying
that talent. But, Defendants, by mutual agreement, impose upon
each other unique restrictions on pursuit of lateral talent:
An athletics staff member or other representative of the
institutions athletics interests shall not make contact
with the student-athlete of another NCAA or NAIA
four-year collegiate institution, directly or indirectly,
without first obtaining the written permission of the
first institutions athletics director (or an athletics
administrator designated by the athletics director) to do
so, regardless of who makes the initial contact.
See NCAA Division I Bylaws 14.5.5 and 13.1.1.3.
Moreover, if a student athlete does transfer, the lateral
Defendant institution ordinarily cannot deploy his, or her, talent
in NCAA competition for one full academic year. NCAA Division I
Bylaw 14.5.5.1.

30

restrict defendant unilateral discretion in determining eligibility to


hire, see A. 71-72, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and
Strike, at 25-26; 14

restrict defendant unilateral discretion in determining pay, see A. 72,


Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 26; 15

14

In their opposition to dismissal, Plaintiff-Appellants noted:


In separate and distinct employment, eligibility for hire is a
matter of unilateral discretion, other than certification of
immigration status and, perhaps, license requirements.
Defendants have forfeited such discretion, mutually agreeing to
uniform NCAA Bylaws by which the eligibility of any student
athlete, to become a member of any Defendants NCAA team
roster, is to be determined.
Moreover, Defendants are required to share information and
report discrepancies that could impact the eligibility of any
student athlete, including such material as it applies to
prospective student athletes not yet enrolled at any institution,
see NCAA Division I Bylaw 12.1.1.1.2.2 (regarding member
obligations to cooperate with the NCAA Eligibility Center), and
enrolled student athletes qualified to transfer to another
institution. See NCAA Division I Bylaws 12.7.2.1 and 12.7.2.2
(regarding annual Student-Athlete Statement, including
information related to eligibility, recruitment, financial aid,
amateur status, previous positive-drug tests and involvement
in organized gambling activities, to be administered to each
student athlete at an institution and kept on file and made
available for examination upon request by the NCAA.)

15

In their opposition to dismissal, Plaintiff-Appellants noted:


In separate and distinct employment, there is unilateral
discretion in compensation, subject to applicable statutes.
Defendants, by mutual agreement, impose upon each other the
strict prohibition on student athlete compensation at issue in
OBannon and in this case [i.e., NCAA Division I Bylaws
12.1.2(a) and 12.1.2.1.1].

31

restrict defendant unilateral discretion in work supervision, see


A. 72-73, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at
26-27; 16

restrict defendant unilateral discretion in term of employment, see


A. 73, Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 27; 17
and

16

In their opposition to dismissal, Plaintiff-Appellants noted:


In separate and distinct employment, there is unilateral
discretion in supervision, subject to applicable statutes.
Defendants, by mutual agreement, impose upon each other
restrictions on Countable Athletically Related Activities
(CARA), defined as any required activity with an athletics
purpose involving student-athletes and at the direction of, or
supervised by, one or more of an institutions coaching staff.
NCAA Division I Bylaw 17.02.1. In playing season, CARA is
limited to 4 hours per day and 20 hours per week; in off-season,
CARA is limited to a maximum of 8 hours per week with no
more than 2 hours per week spent on skill-related workouts.
See NCAA Division I Bylaws 17.1.7.1 and 17.1.7.2. Moreover,
Defendants are required to record CARA hours daily, much like
timesheets in work study programs. See NCAA Division I
Bylaw 17.1.7.3.4.

17

In their opposition to dismissal, Plaintiff-Appellants noted:


In separate and distinct employment, the term of employment is
a matter of unilateral discretion, subject to applicable statutes.
Defendants, by mutual agreement, impose upon each other
restrictions that, among other things, require suspension of a
student athlete for infraction of agreed upon NCAA rules, see
NCAA Division I Bylaw 12.11; set a Five-Year Rule expiration
date for eligibility, see NCAA Division I Bylaw 12.8.1 and
restrict the permitted grounds for reduction or cancellation of
institutional financial aid based in any degree on athletics
ability, which reduction or cancellation effectively diminishes or
terminates a position on the team roster. See NCAA Division I
Bylaw 15.3.4.3.

32

restrict defendant unilateral discretion in discipline, see A. 73,


Pls. Mem. in Oppn to Defs. Mots. to Dismiss and Strike, at 27. 18

These restrictions on defendant unilateral discretion in student athlete


employment are strictly enforced, subjecting defendants to substantial competitive
and financial penalties at the discretion of enforcement committees composed of
members from peer, competing defendant colleges. See A. 74, Pls. Mem. in Oppn to
Defs. Mots. to Dismiss and Strike, at 28. 19
18

In their opposition to dismissal, Plaintiff-Appellants noted:


In separate and distinct employment, discipline is assessed
through internal compliance or human resources processes.
Defendants, by mutual agreement, subject home team
student athletes to the disciplinary processes of the NCAA
Committee on Infractions and NCAA Infractions Appeals
Committee, which committees include representatives from
peer, competing institutions and prohibit participation, in
adjudication, by anyone directly connected with an institution
under investigation. See, e.g., NCAA Division I Bylaws 19.3.1,
19.3.4, 19.4.1 and 19.4.3.

19

In their opposition to dismissal, Plaintiff-Appellants noted:


Importantly, no Defendant has unilateral discretion to opt out
of NCAA mutual agreements. Instead, in order to obtain an
exemption from, or waiver of, any NCAA Bylaws governing the
terms and conditions of student athlete employment, a
Defendant must apply to a committee including representatives
from peer, competing institutions. See, e.g., the Initial-Eligibility
Waivers Committee, NCAA Division I Bylaw 21.7.5.1.3.1, and
Committee on Student-Athlete Reinstatement, NCAA Division I
Bylaw 21.7.7.3.
Infractions of any NCAA Bylaw could subject Defendants to
substantial competition and financial penalties, including, but
not limited to, suspension or termination of student athlete
eligibility, suspension of coaching staff, and/or disqualification
from regular season competition and/or post-season and
championship segments. See, e.g., NCAA Division I Bylaws
19.9.5, 19.9.7 and 19.9.8.
33

Separate and distinct employers do not, and arguably cannot, impose


similar restrictions upon each other.
Moreover, joint employment is not unheard of in a sports league where, the
League exercises a significant degree of control over essential aspects of the clubs
labor relations, including but not limited to the selection, retention, and termination
of the players, the terms of individual player contracts, dispute resolution and
player discipline, and each club granted the [League] authority over not only its
own labor relations but also, on its behalf, authority over the labor relations of the
other member clubs. See North American Soccer League v. NLRB, 613 F.2d 1379,
1382 (5th Cir. 1980) (noting a joint employer relationship is essentially a factual
issue, and concluding that the record supports a finding of joint employment).
The references made to NCAA Division I Bylaws in the Amended Complaint,
and thorough discussion of bylaws in Plaintiff-Appellants opposition to dismissal,
are sufficient to have given the defendants fair notice of Plaintiff-Appellants
joint employment theory, and to have given rise to reasonable inferences of same,
such that this theory is properly incorporated into the Amended Complaint and
ought to have been accepted as true in consideration of motions to dismiss.
Moreover, the NCAA Infractions Program establishes, under
Expectations and Shared Responsibility, that each Defendant
has an affirmative obligation to report all instances of
noncompliance, and to cooperate fully with and assist,
investigations, regarding any student athlete, including
prospective student athletes not yet enrolled at any institution,
or student athletes enrolled in another institution. See, e.g.,
NCAA Division I Bylaws 19.2.2 and 19.2.3. In fact, failure to
cooperate in an NCAA enforcement investigation is considered a
Severe Breach of Conduct (Level I Violation). NCAA Division I
Bylaw 19.1.1(c).

34

For the foregoing reasons, Plaintiff-Appellants respectfully request that


this Court vacate the district courts decision, and remand, reinstating the
Plaintiff-Appellants joint employment theory, or granting leave to amend to add the
term joint employment to the text of a Second Amended Complaint. 20
VIII. Joint Employment under the FLSA is a fact-intensive inquiry and
not ripe for determination, before discovery, on a motion to dismiss
It is well-settled that, determination of whether employment by a group of
employers is to be considered joint employment or separate and distinct employment
for purposes of the FLSA depends upon all the facts in the particular case.
Villareal v. El Chile, Inc., 776 F. Supp. 2d. 778, 794 (N.D. Ill. 2011) (granting and
denying in part, plaintiffs motion for partial summary judgment).
Plaintiff-Appellants also respectfully request that this Court reinstate the allegations
in Amended Complaint 1, 59-67, regarding differences between student-run groups and
NCAA-regulated sports, or grant leave to amend.
20

Defendants moved to strike pursuant to Fed. R. Evid. 408. But, the communication
referenced in Amended Complaint 61-65 neither initiated settlement discussions, nor
occurred during such discussions rather, it occurred after the NCAA declined to engage in
such discussions. Moreover, the factual assertions contained therein cannot prejudice
defendants because these assertions responded to a defense that defense counsel continues
to claim in public filings in this case, i.e., DOL Field Operations Handbook 10b03(e).
The district court struck these allegations, but not in relation to Fed. R. Evid. 408.
Instead, the district court complained that the drafting appeared strange. A. 29, Op. at 2.
But, the district court later referenced these same allegations in a manner suggesting
that it accepted that such allegations could be, and had been, made in good faith and,
therefore, ought to have been accepted as true in consideration of motions to dismiss. A. 44,
Op. at 17 n.14.
Consistent with the district courts citation to Defender Sec. Co., 803 F.3d at 335,
Plaintiff-Appellants also thoroughly discussed differences between student-run groups and
NCAA-regulated sports in their opposition to dismissal, see A. 51-56, Pls. Mem. in Oppn to
Defs. Mots. to Dismiss and Strike, at 5-10, such that these allegations in the opposition to
dismissal are also properly incorporated into the Amended Complaint and also ought to
have been accepted as true in consideration of motions to dismiss.

35

Because, [t]he inquiry into joint employment for FLSA purposes is flexible
and fact-intensive . such an inquiry is ill-suited for consideration on a motion to
dismiss. Aguilar v. United Floor Crew, No. 14-CIV-61605, 2014 U.S. Dist. LEXIS
166468, at *8-10 (S.D. Fla. Nov. 26, 2014). 21
Here, again, a factual record has yet to be developed because there has been
no discovery.
For the foregoing reasons, Plaintiff-Appellants respectfully request that
this Court vacate the district courts decision, and remand, because the grant of
motions to dismiss, before development of a factual record, was premature.

The Aguilar court relied on sister courts in the Eleventh Circuit, including Diaz v.
U.S. Century Bank, No. 12-21224-CIV, 2012 U.S. Dist. LEXIS 116877, at *9-10 (S.D. Fla.
Aug. 20, 2012) (denying motion to dismiss for lack of a factual foundation for establishing a
joint employment relationship, noting that [a]n exhaustive joint employment analysis
would . . . be premature at this stage where Plaintiffs have submitted a plausible claim);
Goodrich v. Covelli Family Ltd. Pship, No. 8:11-CV-1715, 2012 U.S. Dist. LEXIS 36363, at
*5 (M.D. Fla. Mar. 19, 2012) (denying motion to dismiss and declining to address[] the
fact-intensive issue of joint employment [before] giving the parties the opportunity to
conduct discovery . . . [and] giv[ing] Plaintiffs an opportunity to prove their case); and
Dawkins v. Picolata Produce Farms, Inc., No. 3:05-CV-559, 2005 U.S. Dist. LEXIS 28789
(M.D. Fla. Nov. 15, 2005) (explaining that determining employer and joint employer
status involves fact intensive inquiries that need to be developed, and are not readily
amenable to resolution on a motion to dismiss).
21

36

CONCLUSION
For all the foregoing reasons, the district courts decision should be vacated
and the case remanded for further proceedings, with instructions.

Dated: March 16, 2016

Respectfully submitted,
s/ Paul L. McDonald
Counsel for Plaintiff-Appellants
Paul L. McDonald
P L MCDONALD LAW LLC
1800 JFK Boulevard, Suite 300
Philadelphia, PA 19103
(267) 238-3835

37

CERTIFICATE OF COMPLIANCE
I, Paul L. McDonald, hereby certify that Plaintiff-Appellants Brief complies
with the type-volume limitation of Fed. R. App. P. 32(a)(7)(B), because this brief
contains 10,200 words, excluding the parts of the brief exempted by Fed. R. App. P.
32(a)(7)(B)(iii).
s/ Paul L. McDonald
Paul L. McDonald
P L MCDONALD LAW LLC
Counsel for Plaintiff-Appellants

38

STATEMENT CONCERNING ORAL ARGUMENT


This case meets standards in Fed. R. App. P 34(a)(2) for oral argument in
that (a) this appeal is not frivolous, as it identifies six errors in the district court;
(b) a number of the dispositive issues raised in this appeal have not been recently
and authoritatively decided in the Seventh Circuit, notably Statement of Issues I,
II, and III; (c) the decisional process would be significantly aided by oral argument
(indeed, oral argument in the district court might have so done, and avoided or
corrected identified errors); and (d) the central issue in this case employee status
of NCAA student athletes under the FLSA substantially impacts public policy and
the interpretation and enforcement of federal rights and protections for hundreds of
thousands of student athletes participating in NCAA-regulated sports annually.
Respectfully submitted,
s/ Paul L. McDonald
Paul L. McDonald
P L MCDONALD LAW LLC
Counsel for Plaintiff-Appellants

39

CERTIFICATE OF SERVICE
The undersigned counsel for Plaintiff-Appellants hereby certifies that on
March 16, 2016, a true and correct copy of the foregoing Plaintiff-Appellants Brief
and Short Appendix, and Plaintiff-Appellants Separate Appendix, were served on
counsel by filing via the CM/ECF system, which will send an email notice to
registered parties, and by U.S. Postal Service Priority Mail to the following counsel of
record for Defendant-Appellees:
Lisa (Lee) A. Schreter
Littler Mendelson P.C.
3344 Peachtree Rd., NE, Ste. 1500
Atlanta, GA 30326

Paul DeCamp
Jackson Lewis P.C.
10701 Parkridge Blvd., Ste. 300
Reston, VA 20191

Danuta B. Panich
Ogletree Deakins P.C.
111 Monument Cir., Ste. 4600
Indianapolis, IN 46204

Lawrence Peikes
Wiggin and Dana LLP
281 Tresser Blvd.
Stamford, CT 06901

Donald S. Prophete
Constangy, Brooks, Smith
& Prophete LLP
2600 Grand Blvd., Ste. 750
Kansas City, MO 64108
s/ Paul L. McDonald
Paul L. McDonald
P L MCDONALD LAW LLC
Counsel for Plaintiff-Appellants

40

CIRCUIT RULE 30(d) STATEMENT


The undersigned counsel affirms that all materials required by Cir. R. 30(a)
and (b) are included in the required Short Appendix bound with Plaintiff-Appellants
Brief, A. 1-46. A Separate Appendix is also submitted, A. 47-387.
s/ Paul L. McDonald
Paul L. McDonald
P L MCDONALD LAW LLC
Counsel for Plaintiff-Appellants

41

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