“Fair Pay” Issues Through the Lens of the U.S. Women’s Soccer Team Litigation

By Kevin Hylton | LexisNexis Practical Guidance

In March 2019, the U.S. Women’s National Soccer Team challenged their pay arrangement with the U.S. Soccer Federation in federal court. The lawsuit, which made global headlines, claimed that gender discrimination by the Federation against the players impacted their compensation, training, coaching and travel arrangements.

The players pointed to some stark differences in the way they were paid in comparison to pay for members of the U.S. Men’s National Soccer Team. For example, the men’s team was awarded $35 million in 2014 for advancing to the round of 16 of the World Cup, but the women received just 5% of that in 2015 for winning the World Cup. They also noted that men were being paid a $17,625 bonus at that time for winning games and a $5,000 bonus for losses or draws; the women were being paid only a $1,350 bonus for wins and nothing for a loss or draw.

In May 2020, U.S. District Judge R. Gary Klausner dismissed the unequal pay portion of the lawsuit (although he allowed other claims of discriminatory work conditions to proceed, which were ultimately settled last fall), but the players immediately pursued an appeal of Judge Klausner’s decision before the Ninth Circuit Court of Appeals. Oral arguments in that appeal are scheduled to begin on March 7.

“This case hinges on what the women’s players claim is ‘disparate treatment’ between their payments and that of the players on the men’s national team,” said Bernard G. Dennis, III, an associate in the Washington, D.C. Region office of Jackson Lewis P.C., who advises clients in the investigation and defense of wage and hour, discrimination and retaliation claims. “The legal basis for the equal pay claim is the Equal Pay Act and the disparate pay claim is rooted in Title VII of the Civil Rights Act.”

Dennis explains that the dispute centers around competing interpretations of how the women’s team members are paid relative to the men.

The Federation points to the fact that they signed collective bargaining agreements with each team and that the women’s team “specifically bargained for a different pay structure that prioritized the stability of guaranteed salaries and substantial benefits over higher-risk contingent game bonuses.” The players insist that “an employer violates the Equal Pay Act if it pays female employees at a rate less than that of similarly situated male employees” and that “every court of appeals has considered a total compensation approach to the Equal Pay Act has rejected it.”

The appellate court will need to decide whether the women’s players can narrow the focus of the dispute down to a fundamental question of whether each component of the compensation agreement must be equal, according to Dennis.

“They are arguing that, if there is going to be a bonus structure created for both men and women, then that bonus structure must be the same,” said Dennis. “And in fact, they contend that the bonuses offered to both men and women must be equal in order to comply with the Equal Pay Act. The complicating factor here is that the bonus pools from which the Federation is able to draw upon for paying the players are vastly different, with the men’s pool being roughly 90 percent larger than the women’s pool.”

This litigation serves as a very timely and interesting point of analysis from which to view “Fair Pay” issues in the U.S. workplace today.

“The broader impacts of this case will certainly reach into traditional labor issues with respect to collective bargaining agreements,” said Dennis. “One of the main cases that the women are relying on to assert that collective bargaining agreements cannot have an illegal or disparate pay scheme is noteworthy because it did not involve a dispute in which both parties had their own unions, as is the case here. It will be interesting how the Ninth Circuit treats the various different realities that exist in the collective bargaining agreements that were negotiated with the men’s players and the women’s players.”

Dennis notes that an important implication in this case for employers might be whether Equal Pay Act and Title VII pay discrimination claims can be asserted where there are different compensation agreements in place with multiple unions representing workers in protected classes. This could be troubling for employers that have negotiated collective bargaining agreements with recognized unions, only to find themselves the subject of a gender pay discrimination lawsuit that contends they should have anticipated unequal compensation claims with the benefit of hindsight.

I had the privilege of interviewing Mr. Dennis for a recent episode of our “Practical Guidance Podcast,” where we invite experts to provide insights on timely issues for legal practitioners. Listen now or download the episode regarding fair pay through the lens of the U.S. Women’s National Soccer Team litigation.