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Game Not Over for U.S. Women’s Soccer Team in Equal Pay Case

May 6, 2020, 6:03 PM

A federal judge’s equal pay ruling for the U.S. Soccer Federation may have been a severe setback to players on the women’s national team, but they have potentially winning arguments when they follow through on their stated plan to appeal, lawyers and advocates say.

Any appeal will challenge the U.S. District Court for the Central District of California’s “resolution of disputed facts and its valuation of compensation components in the case,” Noreen Farrell told Bloomberg Law.

“The court’s reliance on the collective bargaining agreement of the women’s team to justify pay discrimination is also fertile grounds for appeal,” Farrell said. She is executive director of Equal Rights Advocates in San Francisco, a group advocating for rights of women and people of all gender identities.

The court caught many off guard with its May 1 ruling, which rejected before trial the team’s class claims under the Equal Pay Act and its pay bias claims under Title VII of the 1964 Civil Rights Act. The women say they’re paid less than the U.S. men’s team players because of their sex.

But undisputed evidence shows the women were actually paid more per game than the men during the period at issue in the suit, Judge R. Gary Klausner said in the high-profile case. And the women’s argument they would have made more if paid performance bonuses equal to the men’s was undercut by the women having negotiated a separate pay scheme with salaries and other fixed compensation instead of accepting the exclusively “pay-for-play” agreement the men play under, Klausner said.

‘Subject to Scrutiny on Appeal’

The first part of the ruling “is subject to scrutiny on appeal,” management-side lawyer Stephanie E. Lewis said.

The court’s approach of looking at the players’ "total compensation” in finding the women were paid more than the men may be at odds with the approach laid out in Equal Pay Act regulations and the case law that has developed under it on how to define and compare compensation, Lewis said. She is the co-chair of Jackson Lewis PC’s pay equity resource group in the firm’s Greenville, S.C., office.

“As a matter of law, you have to look at all components of pay” when determining whether the evidence shows unequal pay, Lewis said. If workers of one sex receive less of one form of pay—for example, bonuses— that could be enough to prove a violation of the Equal Pay Act even if the overall compensation they receive is equal, Lewis said.

In such situations, the workers paid less under that component would be entitled to the difference as damages, unless the employer shows the difference was due to a reasonable factor other than sex, Lewis said.

In the women’s soccer case, such factors could include the other components of the pay plan the team negotiated with U.S. Soccer, which Klausner extensively detailed in his ruling, she said.

Defining Pay Is ‘Complicated’

It is those “unique aspects” of the women’s soccer case that management-side attorney Erin M. Connell thinks may allow Klausner’s decision to survive review by the U.S. Court of Appeals for the Ninth Circuit.

The women’s pay wasn’t simply set by their employer: It was bargained by U.S. Soccer and the players’ union, Connell said.

Klausner’s “total compensation” analysis “ties in” with how the two teams were paid under separate CBAs. Connell said. She is a partner in the San Francisco office of Orrick, Herrington & Sutcliffe LLP.

The women apparently negotiated for less financial risk than the men assumed under their pay-for-play plan, she said. While a total-compensation analysis may not be apt in all equal pay cases, “here, it makes sense” given the agreements and other unique facts, Connell said.

But defining and calculating compensation for pay comparisons is often “very complicated,” Connell said. Courts don’t use a one-size-fits-all approach.

It remains to be seen how the Ninth Circuit will approach the issue, she said.

Ruling May Not Have Wide Application

Plaintiff-side attorney Jahan C. Sagafi also noted the unique aspects of the case. That includes “the specialized nature” of the work at issue in addition to the CBAs, he said.

The team doesn’t perform duties seen under common sales or other business models. It instead performs for a specialized market in a specialized forum, he said.

“That makes it hard to analogize” the district court’s holding to more typical workplaces, Sagafi said. The women’s pay litigation with U.S. Soccer has deservedly garnered significant attention, but it’s hard to see how any ruling in the case might be applicable in equal pay litigation generally, he said.

Private unions are rare, so there aren’t a lot of CBAs in private industry, he said. Sagafi is the partner-in-charge of Outten & Golden LLP’s San Francisco office.

‘Alternate Ground for Affirmance’

The women’s and men’s teams’ "fundamentally different” bargaining contracts are “an alternate ground for affirmance” on appeal, Lewis said.

The existence of a CBA alone may not be a complete defense under the Equal Pay Act. But the history of negotiations between the women’s union and U.S. Soccer is important, Lewis said.

The details of those negotiations led Klausner to conclude the female players were really asking for more than equal pay by seeking all of the upsides of the men’s pay plan without risking any of the downsides, she said.

The “court may well have made a mistake of law when it did not give enough weight or consideration to the reasons motivating or compelling” the women to accept their pay structure, Farrell said. The players allege U.S. Soccer “refused them an equal pay structure,” forcing them to bargain for basic guarantees in how they were paid, she said.

But Klausner’s decision “relies squarely on false myths that pay discrimination flows from a woman’s ‘bad choices’” or poor negotiating, Equal Rights Advocates’ Farrell said.

Like Sagafi, Farrell cited the women’s much greater success on the field relative to the men’s team as among their best evidence they were paid unequally.

Timing of Appeal Unknown

The timing of the team’s expected appeal is complicated by the ruling, which also held that a jury must decide related allegations the women were also subjected to inferior travel conditions and medical and training support.

A trial is set to begin June 16.

With the bulk of the case dismissed and just a small portion of the original claims still pending, the team has a few options because a partial summary judgment grant isn’t a final appealable order.

The women could try their remaining claims to a jury and then appeal the summary judgment ruling and any trial issues at one time, Lewis said.

“That’s the most likely procedural outcome,” she said, even though it might result in more than one trial if the Ninth Circuit reverses Klausner’s May 1 ruling.

“Plaintiffs don’t typically mind multiple trials,” Lewis said.

Or the women may see that as a misuse of time and instead seek Klausner’s permission to appeal immediately, Sagafi said. He thinks the “chances are pretty good” the judge would grant the request. U.S. Soccer might also go along with that to avoid the public glare of multiple trials and for other strategic purposes, he said.

The team would have to show a controlling disputed question of law and that the case would likely be more quickly resolved if the Ninth Circuit answers it, if wants Klausner to grant such a request, Farrell said.

The women could alternatively file an immediate appeal without Klausner’s permission if they dismiss their remaining claims, Connell said. The dismissal could be filed without prejudice, but presumably the statute of limitations would start to run again on those claims unless U.S. Soccer agreed to suspend the time limit while an appeal is pursued, she said.

Or the prospects of an appeal “may motivate both sides to the settlement table,” Farrell said.

With the possibility of a settlement in play, the women’s team would be “wise to wage its battle against pay inequity—and the stereotypes that drive it—in the court of public opinion as hard as it does in the court of appeal,” she said.

The case is Morgan v. U.S. Soccer Fed’n, Inc., C.D. Cal., No. 2:19-cv-01717, trial scheuled for 6/16/20.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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