berger v ncaa_appellate brief

8/17/2019 Berger v NCAA_Appellate Brief

http://slidepdf.com/reader/full/berger-v-ncaaappellate-brief 1/47

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 orin 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 L AW LLC

1800 JFK Boulevard, Suite 300

Philadelphia, PA 19103

(267) 238-3835

Counsel for Plaintiff-Appellants

i 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.



ii

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 inthis 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




(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 L AW LLC




iii

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 properlyincorporated 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



iv

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



v

TABLE OF AUTHORITIES

CASES

ABN Amro, Inc. v. Capital Int’l 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. P’ship,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



vi

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

O’Bannon v. NCAA,

802 F.3d 1049 (9th Cir. 2015) .……………………………………….…………….… 16, 31

O’Bannon v. NCAA,

7 F. Supp. 3d 955 (N.D. Cal. 2014),

aff’d in part and rev’d 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. Sec’y 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



1

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.

1 Citations to the Appendix are in the form “A. __.” Counsel affirms that all materialsrequired 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.

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.



2

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, differentiatingacademic 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?


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

grant of a motion to dismiss, before discovery, is premature?


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?


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

grant of a motion to dismiss, before discovery, is premature?




3

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,



4

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



5

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

Opp’n 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 Opp’n 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.



6

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.



7

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.



8

The district court’s 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 today’s 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.



9

ARGUMENT

II. Standard of Review for All Issues on Appeal

This Court, “review[s] the district court’s 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 court’s 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.



10

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 hands-on training

provided by educational institutions.

3.

The extent to which the internship is tied to the intern’s formaleducation program by integrated coursework or the receipt of

academic credit.

4. The extent to which the internship accommodates the intern’s

academic commitments by corresponding to the academic

calendar.

5. The extent to which the internship’s duration is limited to the

period in which the internship provides the intern with beneficial

learning.

6. The extent to which the intern’s 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 test’s additional

reliance on educational aspects of the work performed – its

integration into coursework, receipt of academic credit,

non-interference with academic commitments, andprovision of significant educational benefits – further

supports Plaintiffs’ positions on student athlete employee

status and collective action. See Pls.’ Mem. in Opp’n 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



11

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 theFLSA 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



12

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

2 This said, THE NEW Y ORK TIMES’ Book Review for “Indentured: The Inside Story of

the Rebellion Against the NCAA,” comments on the captive nature of student athlete labor:

As documented in Joe Nocera and Ben Strauss’s new book,

“Indentured: The Inside Story of the Rebellion Against theNCAA,” [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).

http://www.nytimes.com/2016/02/21/books/review/indentured-by-joe-nocera-and-ben-strauss.html?login=email&_r=0













13

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 court’s 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

FLSA’s employee criteria to waive the FLSA’s protections, including her entitlement

to wages. See, e.g., Tony & Susan Alamo Found v. Sec’y 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.”)



14

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

3 In their opposition to dismissal, Plaintiff-Appellants elaborated on District Judge

Claudia Wilken’s findings after trial in O’Bannon v. NCAA, 7 F. Supp. 3d 955 (N.D. Cal.

2014), aff’d in part and rev’d in part, 802 F.3d 1049 (9th Cir. 2015):

Regarding the NCAA’s contention that its restrictions on

student athlete pay “preserv[e] its tradition of amateurism,”

Judge Wilken noted that NCAA’s 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 earnup 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 Opp’n 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-definedamateurism rules also permit student athletes qualifying for, and competing in, the

Olympics to be paid stipends or prize money under the U.S. Olympic Committee’s

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.



15

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 court’s 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 court’s 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 17-21,4

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”:

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, thiswould 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



16

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 O’Bannon v. NCAA, 802 F.3d 1049 (9th Cir. 2015).


this Court vacate the district court’s 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 suchrestriction, 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 18-19.



17

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 employer’s 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

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



18

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 Opp’n to Defs.’ Mots. to

Dismiss and Strike, at 5-10, 12.

THE NEW Y ORK 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 workabundant, 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 interscholasticathletics 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.



19

It’s college athletics without the pageantry or prerogative,

and that’s 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 environmentof modern, elite college athletics ….

The ability to balance one’s 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, Yale’s 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 allpractices are not mandatory. I’m 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 thesame 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 8-9.

http://www.nytimes.com/2008/12/02/sports/02club.html?pagewanted=all&_r=2&











20

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, Men’s Club Lacrosse, Men’s Club Soccer, Men’s Club

Volleyball, Men’s Ultimate Frisbee, Penn Badminton, Penn Boxing Club, Penn Club

Gymnastics, Penn Cycling, Penn Ping Pong, Penn Sailing, Penn Squash Club, Roller

Hockey Club, Women’s Club Lacrosse, Women’s Club Soccer, Women’s Club

Volleyball, Women’s Club Water Polo, and assorted Martial Arts clubs.6 A. 54,

Pls.’ Mem. in Opp’n 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

6 At the time Plaintiff-Appellants filed their opposition to dismissal, Defendant Penn’s

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 Opp’n to Defs.’Mots. to Dismiss and Strike, at 6.

7 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 16 (emphasis in original).

https://upenn-community.symplicity.com/index.php?s=student_group&au=&ck=





21

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 Opp’n 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),

Men’s Basketball (39.2 hours per week), Women’s Basketball (37.6 hours per week),

All Other Women’s Sports (33.3 hours per week), and All Other Men’s 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



22

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.

Colter’s testimony details Defendant Northwestern’s rigorous control on and

off the field, year round, of student football athletes, and substantial responsibilities

and duties that student football athletes have to Northwestern’s 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:

http://www.ncaapublications.com/productdownloads/D115.pdf





23

Everything that we do is scheduled around football, what

classes we can take, what major you could really participate

in. It’s all depending on football and your schedule ….

Due to the time demands, you can’t ever reach your

academic potential. You’re merely just surviving. There’sso much time demand towards football and being a great

football player that you have to sacrifice one, and we’re

not allowed to sacrifice football. So ….

A. 234-240, Colter Test. 166:14-172:17.

Northwestern’s 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, 260-

261, 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.







24

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.

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

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 operationsmay 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.



25

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

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

http://www.propublica.org/article/how-the-labor-department-let-companies-off-hook-for-unpaid-internships










26

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 court’s 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 today’s 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, andrestaurants. 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 agencymust monitor 7.3 million workplaces and enforce labor laws

that protect 135 million employees.

10 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 today’s economy than the DOL factors [from § 10b11(b) of the

DOL Field Operations Handbook].” 791 F.3d at 385.



27

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


this Court vacate the district court’s 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 plaintiff’s 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

11 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 10-17; see also A. 82-85,

Pls.’ Notice of Supplemental Authority.

12 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.



28

F.3d 753, 756 (7th Cir. 2013) (“The evaluation of a FLSA claim requires a ‘thorough,

fact-intensive analysis of the employee’s 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 employer-

employee 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.


this Court vacate the district court’s 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 properlyincorporated 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



29

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 Int’l 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 plaintiff’s 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 Opp’n 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:



30

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

Pls.’ Mem. in Opp’n 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 other’s 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 student-

athlete.” 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 fromrecruiting 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

institution’s 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 institution’s 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.



31

• restrict defendant unilateral discretion in determining eligibility to

“hire,” see A. 71-72, Pls.’ Mem. in Opp’n to Defs.’ Mots. to Dismiss and

Strike, at 25-26;14

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

Pls.’ Mem. in Opp’n to Defs.’ Mots. to Dismiss and Strike, at 26; 15


In separate and distinct employment, eligibility for hire is amatter 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 Defendant’s 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.)


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

O’Bannon and in this case [i.e., NCAA Division I Bylaws

12.1.2(a) and 12.1.2.1.1].



32

• restrict defendant unilateral discretion in work supervision, see

A. 72-73, Pls.’ Mem. in Opp’n 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 Opp’n to Defs.’ Mots. to Dismiss and Strike, at 27;17

and


In separate and distinct employment, there is unilateraldiscretion in supervision, subject to applicable statutes.


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 institution’s 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.


In separate and distinct employment, the term of employment is

a matter of unilateral discretion, subject to applicable statutes.


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.



33

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

Pls.’ Mem. in Opp’n 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 Opp’n to

Defs.’ Mots. to Dismiss and Strike, at 28.19


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.


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.



34

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-Appellant’s 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).



35


this Court vacate the district court’s 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).

20 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.

Defendants moved to strike pursuant to Fed. R. Evid. 408. But, the communication

referenced in Amended Complaint ¶¶ 61-65 neither initiated settlement discussions, noroccurred 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 court’s 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 Opp’n 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.



36

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.


this Court vacate the district court’s decision, and remand, because the grant of

motions to dismiss, before development of a factual record, was premature.

21 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. P’ship, 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”).



37

CONCLUSION

For all the foregoing reasons, the district court’s decision should be vacated

and the case remanded for further proceedings, with instructions.

Dated: March 16, 2016 Respectfully submitted,

s/ Paul L. McDonald


Paul L. McDonald




(267) 238-3835



38

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





39

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 L AW LLC




40

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 Paul DeCamp

Littler Mendelson P.C. Jackson Lewis P.C.

3344 Peachtree Rd., NE, Ste. 1500 10701 Parkridge Blvd., Ste. 300 Atlanta, GA 30326 Reston, VA 20191

Danuta B. Panich Lawrence Peikes

Ogletree Deakins P.C. Wiggin and Dana LLP

111 Monument Cir., Ste. 4600 281 Tresser Blvd.

Indianapolis, IN 46204 Stamford, CT 06901

Donald S. Prophete

Constangy, Brooks, Smith

& Prophete LLP2600 Grand Blvd., Ste. 750

Kansas City, MO 64108

s/ Paul L. McDonald

Paul L. McDonald





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



berger v ncaa_appellate brief

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