Was USWNT's equal pay settlement celebrated too soon? Here's why it may have been announced before new CBA

The U.S. Soccer Federation and the U.S. women's national team players jointly announced on Feb. 22 the settlement of the class-action equal pay lawsuit that the players filed against U.S. Soccer. The players will receive $22 million, plus access to a $2 million fund that will offer players grants of up to $50,000 for post-playing work that contributes to women's and girls' soccer. Moreover, U.S. Soccer committed to provide "an equal rate of pay going forward for the women's and men's national teams in all friendlies and tournaments, including the World Cup."

Although this was far less than the $67 million the players sought, it was more than they might have expected after the District Court rejected their pay equity claims and granted U.S. Soccer partial summary judgment in May 2020 on the equal pay claims. The judge agreed with U.S. Soccer that the undisputed facts on the equal pay claims were so clear that the federation was entitled to judgment as a matter of law and could forgo a trial on those claims, forcing the players to try to appeal.

So, it's not surprising that news of the settlement was celebrated with much fanfare. Players including Alex Morgan and Megan Rapinoe did the media rounds and took a victory lap with U.S. Soccer president and former USWNT player Cindy Parlow Cone. Morgan called it a "monumental step forward," while Rapinoe later predicted "this will completely change the landscape of the women's game in the country forever." At her address in U.S. Soccer's annual general meeting the following week, Cone echoed these remarks, saying it was "a huge win for U.S. Soccer and for our women's players" and "has far-reaching long-term benefits for everyone."

Lost amid this collective back-patting, however, was a big catch: The settlement is contingent upon the parties reaching a new collective bargaining agreement. That means more than negotiating with the USWNT Players Association, too. As Cone admitted, unless FIFA acts, the only way to resolve the disparity in the World Cup prize money -- one of the most contentious issues in the lawsuit -- "is for the men's team, the women's team and U.S. Soccer to get together and reach an agreement on equalizing it ourselves." FIFA is planning to pay $440 million in prize money at the 2022 men's World Cup in Qatar, but only about $60 million at the 2023 Women's World Cup in Australia and New Zealand.

That raises a question: If they decided that reaching a CBA deal was crucial to the settlement, why did they announce a settlement before the CBA was done? There are at least three possible explanations.

1. The deal is 'all but done,' but the announcement couldn't wait

One possibility is that the deal is close to done, but they wanted to announce it early because of the timing of other things.

Oral argument on the appeal

The most straightforward reason to announce early is to avoid oral argument on the players' appeal, which was scheduled for March 7. By settling two weeks in advance (not quite "on the courthouse steps," but close), the parties avoid both the legal fees associated with preparing for and participating in the oral argument and any negative news stories based on statements made at the argument.

Plus, it avoids the risk that either party might change their mind on the settlement after getting clues about which way the judges are leaning in their questioning of the lawyers during oral argument.

The U.S. Soccer presidential election

The U.S. Soccer annual general meeting started on March 3, and by announcing the settlement before then, the parties accomplished a couple of key things.

First, the settlement gave Cone a big win prior to the presidential election on March 5, which may have been helpful in her winning re-election at the meeting. This could have motivated Cone to push the settlement along -- something she denied as a factor -- but it also could have influenced the players, who made no secret of their preference for Cone over her opponent, former U.S. Soccer president Carlos Cordeiro. (He was in office when the players first filed their lawsuit in 2019.)

Second, it effectively locked-in the settlement in case Cordeiro had won and was not in favor of its terms. According to reports, U.S. Soccer's board of directors voted to approve the settlement terms already. Cone declined to share exactly how the boardroom discussions went, citing "executive session," but the public announcement makes it difficult as a public relations matter to reverse course.

A new media deal

On March 1, U.S. Soccer announced a new eight-year multimedia deal with Warner Media's Turner Sports for the English-language rights to national team matches for both women and men. Although there is no indication that this media deal was itself contingent on the settlement, Warner Media may have preferred to delay its announcement until after the settlement was announced. That would have spoiled U.S. Soccer's plans to showcase the new deal at the annual general meeting.

By ending its commercial rights partnership with Soccer United Marketing in May 2021 so that U.S. Soccer could sell the media rights itself, Cone and U.S. Soccer took a gamble that it could do so successfully. Achieving that and announcing it in advance gave Cone another win prior to the election.

Legal approval of a settlement

There is one strictly legal reason for opting not to wait and announce both the settlement and a new CBA together: Under Rule 23 of the Federal Rules of Civil Procedure, the District Court judge in a class action must approve, after a hearing, a settlement to ensure that it is "fair, reasonable, and adequate" and "treats class members equitably relative to each other." The judge could have a question about the allocation of resources between the settlement and the CBA because they are between different, although overlapping, groups that include both current and former U.S. women's national team players.

Locking in the terms of the settlement before finalizing and getting approval on a new CBA may be a way to reassure the judge that the settlement and the CBA were separate, and compensation intended for the former players in the settlement wasn't shifted to the current players in the CBA.

2. The deal isn't actually done

A second possibility is that the men's national team players are holding things up on the critical issue of equalizing the World Cup prize money. As Cone has made clear, solving that issue requires agreement among both the women and the men. That might require the men to make some concessions that they have not yet agreed to make.

Announcing the settlement now, while making it contingent on reaching a CBA that solves the prize money disparity between the two teams, may be calculated to put pressure on the men to reach an agreement before the women's current CBA expires on March 31. (Sources have told ESPN reporters that the equalized prize money is indeed the last piece to get a deal over the line, and it has been the most complicated part as well, but negotiations are progressing with an eye on March 31.)

If that were the strategy behind the announcement, though, it would suggest that the negotiations on a resolution are not going that well. Resorting to something drastic -- like announcing a settlement -- just to shake things up and push negotiations forward would imply there is a chance the whole deal breaks down. This seems unlikely, but until a deal is announced, it can't be ruled out.

3. The deal isn't as good as advertised

A third possibility is that the CBA is close to done, but it doesn't look as good on the issue of equal pay as the public statements about the settlement suggest. That could just be optics -- such as if the women's CBA retains some guaranteed salaries and the men instead receive an offsetting amount of some other type of compensation. But it also could be that they have agreed to something that falls short of what many people consider equal pay.

The most likely spot for that would be on the World Cup prize money. Other countries that have announced equal pay deals for their national teams have generally resolved the disparity by providing equal percentages, not equal money. Australia, for example, provides that each team receives 40% of the prize money FIFA pays out in the tournament they qualify for, but because of the disparity in prize money between the men's and women's World Cups, the actual money paid to each team still differs substantially. Norway set its deal at 25%, with the president of the Norwegian Players Association admitting that "technically, it's not equal at all." Brazil did not specify its percentage, stating it would pay "proportionally equal" amounts, while Ireland decided to exclude prize money from the terms of its equal pay deal.

Perhaps these types of approaches are the best that U.S. Soccer and the players can do while pressuring FIFA to resolve the disparity itself. If so, announcing the settlement early allows U.S. Soccer and the players to claim victory for equal pay while omitting inconvenient details that might disrupt their narrative.

What's next for the USWNT and U.S. Soccer

If the CBA contingency was just a timing issue because of other events, it shouldn't dampen enthusiasm for the settlement. If, however, it reflects deeper problems in reaching a long-lasting equal pay deal, then the celebrations over the settlement may have been premature. This is just as true if the parties agree to a CBA that is less than satisfactory as it is if they fail to reach a deal at all.

Although a settlement would resolve the litigation between U.S. Soccer and this group of players over the alleged violations of law that occurred during the period covered by the lawsuit, it wouldn't bind the players or the USWNT Players Association, which was not a party to the lawsuit, for future violations of law. In this case, the danger is that a CBA that fails to meet the players' expectations about equal pay may only serve to lay the foundation for the next lawsuit.

Steven Bank is a professor of business law at UCLA and an avid soccer fan who teaches a course called "Law, Lawyering and the Beautiful Game."