December 10, 2019
This article was originally published by Law360.
In March, representatives of the U.S. Women’s National Team, or WNT, filed a class action lawsuit on behalf of current and former soccer players alleging the U.S. Soccer Federation, or USSF, violated the Equal Pay Act and Title VII of the Civil Rights Act of 1964 by paying the female players less than the male players on the U.S. Men’s National Team, or MNT, despite the WNT’s record of superior performance.
The WNT also seeks equality with respect to playing, training and travel conditions, equal promotion of their games, and equal support and development for their games. The anti-discrimination laws cover all forms of compensation made to employees.
Last month, a California federal judge certified three classes of female soccer players: an injunctive relief class, a back pay damages class, and a Fair Labor Standards Act collective action class. The injunctive relief and back pay classes are seeking relief under Title VII, whereas the FLSA collective action class is seeking relief under the EPA and requires class members to affirmatively opt in.
The EPA requires that “men and women in the same workplace doing substantially equal jobs be given equal pay” where equal pay covers all forms of compensation. Under EPA interpretation, the relevant inquiry turns on the nature of the work requirements (i.e., skills, effort, responsibilities and working conditions), rather than the job title, with respect to a determination of whether jobs are considered substantially equal.
However, in both EPA and Title VII sex-based compensation cases, pay differences are permitted if they can be justified in the “context of seniority, quantity or quality of production, merit, or some factor other than sex.”
Title VII, unlike the EPA, has no requirement that a claimant’s job be substantially equal to that of a higher-paid person outside the claimant’s protected class, nor does it require that the claimant work in the same establishment as a comparator.
Regarding the WNT’s burden of proving its allegation that class members sustained damages stemming from years of being wrongfully paid less than the MNT players, and that the alleged lower pay is based on gender, several relevant lines of inquiry and economic analysis should be explored. This article also explores the USSF’s most prominent defense of its alleged pay practices — the purported differences in revenue generation between the men’s and women’s teams.
Various conflicting figures and statistics have been publicly asserted by both sides regarding the existence and magnitude of a gender-based pay gap between WNT and MNT players.
For example, in legal proceedings, the USSF presented evidence from its payroll records purporting to show that each of the four class representatives earned more in total income than the single highest earning MNT player over the April 2014 to September 2019 period. In its own filings, the WNT purports to present the pay rates that WNT player representatives earned under their terms of agreement compared with what they would have earned under the MNT’s collective bargaining agreement, or CBA.
Specifically, the WNT asserts the female players would have earned, in some cases, upwards of 250% more had they been males playing under the MNT compensation scheme. In its class certification ruling, the court sided with the WNT, explaining that, with respect to showing injury in fact, what matters is a demonstration of differences in pay rates (e.g., on a per game basis), not differences in total compensation.
In other words, simply presenting comparisons of total pay misses the mark because, at a minimum, it does not factor in time and effort. Stated differently, a female should not have to work twice as long to earn as much as a male because she is paid half as much.
Regardless, for purposes of understanding whether a pay rate disparity exists, the selective comparisons presented by both sides are vague and may be incomplete. At a very minimum, what is missing from the comparisons is an understanding of what monies are captured and what monies are excluded, as well as an exploration of what monies should be included.
After all, the laws against pay discrimination cover all remuneration made to workers “including salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.”
First, what constitutes an appropriate pay rate comparison is likely a complex question in this case, where the men’s and the women’s teams each negotiate separately across an array of payment terms. As USSF President Carlos Cordeiro asserted, “the many differences between our women’s and men’s pay structures and competitions have made direct comparisons between their pay extremely difficult. As a result, there’s been confusion about what our women’s and men’s players are actually paid by U.S. Soccer.”
Cordeiro is referring to the WNT’s specific negotiation for guaranteed salaries, benefits and bonuses, in contrast to the MNT’s preference to be paid for individual match appearances where the amounts depend on match outcomes. The CBAs also cover other forms of remuneration that were negotiated such as promotional appearance fees, training camp payments, player per diems, and, at least for the WNT players, some licensing and sponsorship rights.
One area ripe for exploration is whether, in the context of the case, differences in preferred pay structures can ever be a defensible ground for the existence of a pay rate differential attributable to sex? In the U.S. Equal Employment Opportunity Commission’s discussion of wage rates in the context of EPA and Title VII wage discrimination matters:
wage rate … encompasses rates of pay calculated on a time, commission, piece, job incentive, profit sharing, bonus, or other basis. … [Equal] wages must be paid in the same form. For example, a male and female who are paid on an hourly basis for substantially equal work must receive the same hourly wage. The employer cannot pay a higher hourly wage to one of those employees and then attempt to equalize the difference by periodically paying a bonus to the employee of the opposite sex.
Both parties appear to acknowledge that, by design, indeed, preference, the WNT negotiated for guaranteed salary and bonuses, while the MNT did not. As such, one would not expect WNT and MNT wage rates to be equal across the array of compensation categories.
For example, WNT players receive a comprehensive set of health and welfare benefits that are not received by the MNT players. On the flip side, MNT players may receive other amounts or typesof payments that are not received by WNT players.
A strict reading of the EEOC guidelines indicates that each form of remuneration should be measured and compared separately. It remains to be seen how the triers of fact will view the inequalities likely to be found across various payment parameters of both teams.
How do World Cup monies fit into the equation?
Second, prize monies and payments associated with World Cup competition —a tournament in which the potential and actual earnings disparity is specifically highlighted by the WNT 2019 champions —are set by FIFA, the international governing body of association football, and are paid to the national federations, which determine how the funds are allocated.
FIFA awarded almost$400 million in total for the men’s 2018 World Cup play, and $30 million for the women’s 2019 World Cup play —an imbalance of over tenfold. The USSF’s payments to the team pools and players for various World Cup milestones are stipulated in the CBAs.
Whether the USSF should be held accountable for FIFA’s unquestionable disparity in prize monies is not obvious, especially if the USSF has little control over this revenue stream. On the other hand, the need to consider how the USSF doles out World Cup monies in a larger framework of pay equity may be a relevant line of inquiry.
Apples to apples?
Third, in early November the court ruled that the WNT players must reveal their earnings from sponsorship and marketing contracts put in place through their CBA, as well as income from professional league play.
Presumably, the USSF’s position is that this income should be considered when assessing comparative pay or pay rates for male and female players to the extent these earnings or potential earnings would have otherwise been retained by the USSF. The USSF’s request for consideration of such information is consistent with the need for a holistic view of compensation streams.
Is relative revenue generation at the heart of the defense?
If the evidence is persuasive that an alleged gap in pay rates exists (and assuming the WNT can show the male and female players perform comparable work), several affirmative defenses are available to the USSF. At the forefront of such defenses is the USSF’s contention that its challenged pay practices are, in large part, based on differences in aggregate revenue generated by each team.
In court filings, the USSF claims that the WNT and MNT have separate budgets that consider each team’s revenue generation. The USSF’s ability to prove that the MNT generates greater revenues than the WNT is likely to be a critical focus of economic analysis, and may include some attempt to disentangle the relative values of the broadcasting and sponsorship rights that the USSF sells as a bundle.
This income reportedly comprised about half of the USSF’s revenues in 2018. Separately, the Wall Street Journal reported that between 2016 and 2018, the women’s games generated about $1.9 million more than the men’s games (nonbroadcast-related revenue, mostly from match ticket sales), based on USSF audited financial statements. The WNT’s allegation that the USSF under-promoted the women’s play may also bea relevant line of economic inquiry with respect to the USSF’s potential affirmative defense.
The WNT’s ongoing suit represents a significant centering kick on the USSF’s pay practices and, more generally, the battle for pay equity; it remains to be seen whether USSF can sustain this attack, but perhaps more importantly, also find a way to move forward in partnership, rather than opposition.
 See, Plaintiffs’ Collective Action Complaint for Violations of the Equal Pay Act and Class Action Complaint for Violations of Title VII of the Civil Rights Act of 1964, March 8, 2019, ¶¶ 1-5 (hereafter, Complaint);https://www.eeoc.gov/eeoc/publications/fs-epa.cfm.
 Complaint, ¶ 4.
 “Facts About Equal Pay and Compensation Discrimination,” U.S. Equal Employment Opportunity Commission athttps://www.eeoc.gov/eeoc/publications/fs-epa.cfm (hereafter, Facts About Equal Pay).
 Order Re: Plaintiffs’ Motion for Class Certification, Nov. 8, 2019; see also, Lauren Berg, “US Women’s Soccer Wins Class Cert. In Equal Pay Fight,” Law360, November 8, 2019 athttps://www.law360.com/employment/articles/1218528/us-women-s-soccer-team-wins-class-cert-in-equal-pay-fight.
 Facts About Equal Pay; see also, Feder, J., & Collins, B. (2016). Pay equity: Legislative and legal developments (CRS Report RL31867), Washington, DC:Congressional Research Service.
 Facts About Equal Pay.
 Facts About Equal Pay; Section 10: Compensation Discrimination, EEOC Compliance Manual, December 5, 2000 athttps://www.eeoc.gov/policy/docs/compensation.html#N_27_(hereafter, EEOC Compliance Manual).
 Facts About Equal Pay.
 The WNT’s burden of showing the work its members perform is substantially equal to that of the MNT is not examined in this article.
 Facts About Equal Pay.
 Declaration of Pinky Raina in Support of DefendantUnited States Soccer Federation, Inc.’s Opposition to Plaintiffs’ Motion for Class Certification, September 30, 2019.
 Roux Declaration, October 8, 2019, pp. 1-3. The WNT is currently operating under a 5-year CBA that expires in 2021. See, Graham Hays, “U.S. Soccer, women’s national team ratify new CBA,” espnW.com, April 5, 2017 athttps://www.espn.com/espnw/sports/story/_/id/19082314/us-soccer-women-national-team-ratify-new-cba. The MNT is currently operating under a 4-year agreement that expired on December 21, 2018. See, USNSTPA FAQ athttps://ussoccerplayers.com/usnstpa-faq#When_does_the_current_Collective; Defendant’s Opposition toMotion for Class Certification, Exhibit A._.
 Order Re: Plaintiffs’ Motion for Class Certification, Nov. 8, 2019, pp. 4-5.
 Facts About Equal Pay.
 Open Letter to our Membership from U.S. Soccer President Carlos Cordeiro –July 29, 2019 (hereafter, Open Letter, July 29, 2019) athttps://www.ussoccer.com/governance/board-of-directors/us-soccer-president-carlos-cordeiro/open-letter-july-29-2019-finding-common-ground.
 Graham Hays, “U.S. Soccer, women’s national team ratify new CBA,” espnW.com, April 5, 2017 athttps://www.espn.com/espnw/sports/story/_/id/19082314/us-soccer-women-national-team-ratify-new-cba; Defendant United States Soccer Federation’s Answer and Affirmative Defenses to Plaintiff’s Complaint, May 6, 2019, ¶ 54 (hereafter, Response to Complaint).
 Response to Complaint, ¶¶ 51-56; Defendant United States Soccer Federation, Inc.’s Opposition to Plaintiff’s Motion for Class Certification, September 30, 2019, (hereafter, Defendant’s Opposition to Motion for Class Certification), pp. 2-3; Open Letter, July 29, 2019.
 Defendant’s Opposition to Motion for Class Certification, Exhibit A, ; Graham Hays, “U.S. Soccer, women’s national team ratify new CBA,” espnW.com, April 5, 2017 athttps://www.espn.com/espnw/sports/story/_/id/19082314/us-soccer-women-national-team-ratify-new-cba.
 EEOC Compliance Manual.
 Open Letter, July 29, 2019.
 Open Letter, July 29, 2019.
 Reality Check Team, “Women’s World Cup: What is the Pay Gap?”BBC News, July 8, 2019.
 Reality Check Team, “Women’s World Cup: What is the Pay Gap?” BBC News, July 8, 2019. In addition to prize monies, FIFA grants additional sums to the teams for preparation costs and club compensation, which are similarly paid at higher amounts to the men relative to the women.
 Andrew Das, “What’s a World Cup Title Worth? For U.S. Women, Six Figures and Counting,”New York Times, July 7, 2019.
 Ryan Boysen, “US Women’s Soccer Team Must Disclose Sponsorship Income,” Law360, November 4, 2019.
 Defendant United States Soccer Federation’s Answer and Affirmative Defenses to Plaintiff’s Complaint, May 6, 2019, para. 37 and p. 17.
 Rachel Bachman, “U.S. Women’s Soccer Games Outearned Men’s Games,” Wall Street Journal, June 17, 2019 (hereafter, Bachman, June 17, 2019); also, Abigail Hess, “U.S. Women’s soccer games now generate more revenue than men’s—but the players still earn less, June 19, 2019 at CNBChttps://www.cnbc.com/2019/06/19/us-womens-soccer-games-now-generate-more-revenue-than-mens.html.
 Bachman, June 17, 2019; also, Abigail Hess, “U.S. Women’s soccer games now generate more revenue than men’s—but the players still earn less, June 19, 2019 at CNBChttps://www.cnbc.com/2019/06/19/us-womens-soccer-games-now-generate-more-revenue-than-mens.html.
 Bachman, June 17, 2019.