Berger v. National Collegiate Athletic Ass'n, 843 F.3d 285

Plaintiffs Gillian Berger and Taylor Hennig are former University of Pennsylvania varsity track athletes who sued Penn, the NCAA, and 120+ Division I member schools alleging FLSA minimum-wage violations because student-athletes are "employees."
Defendants moved to dismiss under Rules 12(b)(1) and 12(b)(6); the district court dismissed all defendants except Penn for lack of standing and dismissed Penn on the merits for failure to state an FLSA claim; plaintiffs appealed.
Plaintiffs alleged student-athlete activities constitute "work" for an "employer" under the FLSA and urged application of the Second Circuit’s intern test (Glatt) to find employment status.
The district court and this panel reviewed standing de novo and reviewed the motion-to-dismiss dismissal of the FLSA claim de novo under Twombly/Iqbal pleading standards.
The court declined to apply a rigid multifactor intern/trainee test, instead assessing the economic reality of the relationship and relying on the long tradition of amateurism and Department of Labor guidance treating extracurricular collegiate athletics as non-work.
Holding: student athletes are not employees under the FLSA as a matter of law; dismissal as to non-Penn defendants for lack of standing and dismissal as to Penn for failure to state a claim were affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to sue non-Penn defendants	Plaintiffs asserted systemic NCAA/member policies caused injury so all named schools and NCAA are proper defendants	Plaintiffs’ injury is traceable only to their employer (Penn); connections to other schools/NCAA are too tenuous	Plaintiffs lack standing to sue defendants other than Penn;
Whether student-athletes are "employees" under FLSA	Student-athletes perform labor-like services and should be treated like interns/employees entitled to minimum wage	Tradition of amateurism, educational/extracurricular nature of athletics, and DOL guidance show student-athletes do not perform "work" for an employer	Student-athletes are not employees under the FLSA as a matter of law;
Proper analytical framework (multifactor tests e.g., Glatt)	Apply Glatt/other multifactor intern/trainee tests to assess employment status	Multifactor intern/trainee tests fail to capture the unique student-athlete context; use flexible economic-reality approach	Rejected Glatt-style test here; court uses flexible economic-reality approach and Vanskike reasoning;
Resolution at motion-to-dismiss stage	Employment status is fact-intensive and requires discovery; dismissal premature	Even accepting pleaded facts, tradition and law demonstrate no employment relationship; dismissal appropriate as a matter of law	Dismissal on Rule 12(b)(6) affirmed; no development of record would cure the pleading defects

Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963 (7th Cir. 2016) (standard of review for standing dismissal)
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167 (2000) (constitutional standing elements)
Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) (standing principles)
Vanskike v. Peters, 974 F.2d 806 (7th Cir. 1992) (use flexible economic-reality test; reject rigid multifactor application)
Glatt v. Fox Searchlight Pictures, Inc., 811 F.3d 528 (2d Cir. 2015) (multifactor intern test urged by plaintiffs)
Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290 (1985) (limits to FLSA "employee" definition)
O’Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049 (9th Cir. 2015) (background on NCAA amateurism rules)
Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328 (7th Cir. 2012) (NCAA rules define student-athlete amateur status)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for plausible claims)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard and dismissal for failure to plead plausible claim)
Melton v. Tippecanoe County, 838 F.3d 814 (7th Cir. 2016) (plaintiff bears burden to show work for employer under FLSA)