College Athletes' Push to Be Recognized as Employees Gains Ground in Johnson v. NCAA Case
A federal appeals court ruling from 2024 is still reshaping the debate over whether college athletes should legally count as employees of their universities. In Johnson v. NCAA, the Third Circuit ruled that college athletes could be considered employees under the Fair Labor Standards Act and created a four-part economic realities test for lower courts to apply case by case, rejecting the NCAA's argument that amateurism status alone should settle the question. The case is back before a Pennsylvania district court, which as of early 2026 had ordered the parties to report on settlement talks with no hearing date set.
The stakes have grown since schools began sharing revenue directly with athletes on July 1, 2025, following the House v. NCAA settlement, with Division I programs distributing up to $20.5 million per school annually. That settlement resolved antitrust claims over compensation but explicitly left the employment question open. Separately, Stanford football players announced a new campus players' association this year as a foundation for eventual collective bargaining, following an earlier, still-contested push by Dartmouth's men's basketball team to unionize after a 2024 National Labor Relations Board regional director ruling found them to be employees.
Two federal appeals courts, the Seventh and Ninth Circuits, previously ruled in Dawson v. NCAA and Berger v. NCAA that college athletes are not employees under federal wage law, leaving conflicting precedent across the country. Legal analysts say a definitive ruling in Johnson could ripple beyond paychecks: if athletes are deemed employees, NCAA compensation limits could be recast as price-fixing among competing employers, exposing the association to further antitrust liability.
What supporters say:
Advocates argue that once programs are sharing up to $20.5 million a year directly with athletes, treating them as anything other than employees ignores the economic reality standard the Third Circuit endorsed in Johnson.
Players pushing for recognition, including the new Stanford players' association, say collective bargaining is the only way to lock in enforceable rules on health coverage and transfer eligibility that can't be struck down as antitrust violations.
What critics say:
The NCAA and groups like the Texas Public Policy Foundation warn that reclassifying athletes as employees would raise their tax burden and could gut funding for lower-revenue Olympic and women's sports.
Opponents point to the Seventh and Ninth Circuits' rulings in Dawson and Berger, arguing decades of precedent already established that athletic participation primarily benefits the athlete, not the school.
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