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The U.S. Women’s National Team (“USWNT”) recently settled its highly publicized class-action lawsuit under Title VII and the Equal Pay Act against the U.S. Soccer Federation (“U.S. Soccer”). Under the terms of the settlement, the USWNT players will receive a total of $24 million, including $22 million in backpay and $2 million to be earmarked for charitable and post-career endeavors. The settlement agreement is contingent on the USWNT ratifying a new collective bargaining agreement with U.S. Soccer by the end of March. Arguably more important than the $24 million in payments, U.S. Soccer has committed to providing an equal rate of pay going forward between the USWNT and the U.S. Men’s National Team (“USMNT”). The settlement was notable because a California district court granted summary judgment in favor of U.S. Soccer on the USWNT’s pay discrimination claims in May 2020. Morgan v. United States Soccer Fed’n, Inc., 445 F. Supp. 3d 365 (C.D. Calif. 2020).
The settlement was announced just a few days before the Ninth Circuit was scheduled to hear oral argument on the USWMT’s appeal. The district court held that, during the relevant time period, the USWNT players actually were paid more per game played than the USMNT players, primarily because the USWNT won the women’s World Cup in 2019 and thus received more bonuses, whereas the USMNT did not qualify for the men’s World Cup in 2018. The district court also emphasized that the USWNT bargained for a different payment structure, which exchanged more guaranteed salaries for lower bonuses for team performance, whereas the USMNT bargained for higher bonuses for team performance in exchange for no salary guarantees. Although U.S Soccer prevailed in the district court on the pay discrimination claims, many viewed it as a costly victory from a public relations standpoint as there was public backlash to arguments made by U.S. Soccer in the district court. The backlash led to U.S. Soccer replacing its counsel and also resulted in the resignation of its president, who was replaced by a former player on the USWNT. As to U.S. Soccer’s commitment to provide an equal rate of pay going forward, there is uncertainty as to how this will be applied because of the differences in the World Cup bonus structure for the USWNT and the USMNT. FIFA awarded $400 million in prize money for 32 teams that competed in the men’s World Cup in 2018 based upon reported substantially higher revenues for the men’s World’s Cup, and the winner (France) received a $38 million payout. In contrast, FIFA awarded $30 million in prize money for 24 teams that competed in the women’s World Cup in 2019, and U.S. Soccer received a $4 million payout as a result of the USWNT winning the championship. It is anticipated that FIFA will award somewhere in the neighborhood of $440 million in prize money for the men’s 2022 World Cup and $60 million for the 2023 women’s World Cup.
It is unclear how U.S. Soccer will provide an equal rate of pay to the USWNT and the USMNT given the disparity in the prize money that is available in the men’s World Cup and the women’s World Cup. What is clear, however, is that organizations need to continue to be aware of and sensitive to equal pay concerns and take a proactive approach to ensuring they are comfortable with the legal strength of their compensation decisions and structure.