THE BIG PICTURE: U.S. Soccer Federation and Women’s National Team announce $24 million equal-pay suit settlement

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The U.S. Soccer Federation and the U.S. Women’s National Team players announced an agreement on Tuesday to settle the three-year-old class action lawsuit over “equal pay” vs. the Men’s National Team.

Although no terms were specified in the statement, the agreement reportedly includes a $22 million bonus fund for the 28 current and ex-players who filed suit in March 2019 and others who are members of the class as certified in late 2019, with the distribution to be determined by the plaintiffs.

In addition, $2 million will be placed into a fund to benefit players after their playing days are over (up to $50,000 each) and for efforts to grow the sport for girls in the U.S.

Most importantly, the settlement is “contingent on the negotiation of a new collective bargaining agreement” with the U.S. Women’s National Team. Their last comprehensive agreement was signed in 2017, lasting through the end of 2021; negotiations have been ongoing, with the federation negotiating concurrently with the U.S. Men’s Team, which has been without a labor agreement since the end of 2018.

The USSF agreed to “equal pay” for the women’s team with the men, but how this exactly will work is hardly clear. During an interview at halftime of the U.S. women’s 5-0 win over New Zealand at the SheBelieves Cup match in Carson, California on Sunday, USSF President Cindy Parlow Cone said they were working toward the “same contract” for both teams, but acknowledged that there would be “some differences.”

The equal-pay portion of the lawsuit was dismissed in 2020 on a summary judgement motion by U.S. District Court Judge R. Gary Klausner, who noted that the women’s team was offered the same terms as the men’s team, but chose a different compensation model. The plaintiffs appealed to the U.S. Ninth Circuit Court of Appeals and arguments were scheduled to be heard on 7 March, but this agreement will eliminate that effort. However, the District Court must approve the settlement to conclude the suit and therefore the labor agreement with the women’s squad must be finalized.

So, this is a step forward, but not the end. But it is pointing that way.

Observed: The women’s team members are taking a victory lap, but it’s the USSF that must be smiling. The women’s suit has been a divisive issue within the federation and any kind of settlement which is financially workable for the USSF is strategically worthwhile.

While the reported $24 million settlement is a lot of money, it’s a lot less than the women were asking for. They trotted out estimates of damages as high as $29.7 million under the Equal Pay Act of 1963 and $66.7 million under Title VII of the Civil Rights Act of 1964 ($96.4 million total), plus punitive damages and so on.

On the other hand, Klausner’s summary judgement opinion was devastating and the chances of having it overturned and then having to go to a jury trial and have the details exposed publicly was a huge risk for the plaintiffs. So both sides had motivating reasons to settle NOW.

The USSF can handle a $24 million settlement in return for getting a completed collective bargaining agreement for the women and simultaneously putting pressure on the men’s team to complete their own agreement. In its 31 March 2021 financial statements, USSF had $130.1 million in reserves, and is looking forward to significant added revenue attendant to the run-up to the 2026 FIFA World Cup in Canada, Mexico and (mostly) the U.S.

And if FIFA does go ahead with its plan to hold the men’s and women’s World Cups every two years, USSF will realize a bonanza from hosting a sooner-than-expected FIFA Women’s World Cup again in the U.S.

The announcement of the settlement agreement is also expected to be a positive for USSF President Parlow Cone – a former national team star – who has been at the head of the negotiating effort and is up for election at the USSF Annual General Meeting on 5 March in Atlanta. However, the crux of the campaign against her by former USSF President Carlos Cordeiro is that too much of the federation’s time and resources are spent on the national teams and not enough on the grass-roots programming and sports development; this settlement may not play as well with that audience.

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