In a significant blow to the National Collegiate Athletic Association (NCAA), a U.S. appeals court ruled on Thursday that college athletes whose efforts primarily benefit their schools may qualify as employees deserving of pay under federal wage-and-hour laws. This decision challenges the long-held notion of amateurism in college sports and could potentially have far-reaching implications for the NCAA.

The court stated that a test should be developed to differentiate between students who play college sports for fun and those whose efforts "cross the legal line into work." U.S. Circuit Judge L. Felipe Restrepo pointed out that playing sports can indeed constitute compensable work, citing professional athletes as examples. The key consideration, according to Restrepo, is whether the cumulative circumstances reveal an employer-employee relationship between the athlete and the college or NCAA.

However, Judge David J. Porter raised concerns about the practicality of implementing such a test, given the large number of student-athletes competing on nearly 6,700 Division I teams. Despite the NCAA's hopes to have the case dismissed, it will now go back to the trial judge for fact finding.

This ruling comes on the heels of a 2021 Supreme Court decision that prompted the NCAA to revise its rules and allow athletes to profit from their name, image, and likeness (NIL). As a result, the NCAA announced a revenue-sharing plan worth nearly $2.8 billion, which could potentially direct millions of dollars directly to athletes by next year.

The Division I athletes and former athletes involved in the case seek hourly wages similar to those earned by their peers in work-study programs. They argue that colleges are violating fair labor practices by not compensating them for the extensive time they dedicate to their sports, averaging 30 or more hours per week. Their lawyer, Paul McDonald, suggested that athletes could earn around $2,000 per month or $10,000 per year for participating in NCAA sports, with many students relying on this income for everyday expenses.

The NCAA and member schools, including Duke, Villanova, and Oregon, are named as defendants in the case. At the time of writing, the NCAA had not provided a comment on the appeals court ruling.

While the Supreme Court's decision in 2021 allowed for some form of compensation for college athletes, it did not settle the question of whether they are entitled to direct pay as employees - a crucial issue addressed by the 3rd U.S. Circuit Court panel.

The NCAA has expressed concerns about turning student-athletes into employees, fearing it would have a detrimental impact on college sports. Baylor president Linda Livingstone, chairperson of the NCAA's board of governors, called on Congress to affirm the unique relationship between student-athletes and their universities.

However, a top lawyer for the National Labor Relations Board stated in 2021 that college athletes should be treated as school employees. In response, athletes have taken to social media, advocating for a portion of the hundreds of millions of dollars that NCAA schools earn through sports, using the hashtag #NotNCAAProperty.

The notion that college athletes cannot be both students and employees, according to McDonald, is inaccurate, as campuses already employ student workers. He emphasized the significant control coaches have over athletes' time, resembling employer-employee dynamics rather than the autonomy of student-led campus groups such as theater or orchestras.

As the case progresses to the trial judge, college sports and the NCAA face challenging questions regarding fair compensation for student-athletes and the delicate balance between academics and athletics. The outcome of this legal battle will undoubtedly shape the future of college sports in the United States.