After a five-year legal battle over claims of dodging minimum wage requirements, Disney will pay $233 million to settle a class action representing more than 50,000 underpaid Disneyland workers.
In a statement, Randy Renick, a lawyer representing the employees, said, “This settlement will put significant awards in the hands of those workers and positively impact their lives as well as the health and well-being being of their families.”
Anaheim voters’ passage in 2018 of Measure L — which forced hospitality businesses that receive tax rebates to increase the minimum wage to $15 an hour, with bumps tied to inflation — sparked the lawsuit. After the initiative was approved, Disney moved to end $267 million in subsidies for a luxury hotel to evade the mandate. Josh D’Amaro, chairman of Disney Parks, also called to end a decades-long moratorium on entertainment taxes.
Workers filed a proposed class action in Orange County Superior Court, pointing to a series of deals with Anaheim in 1996 under which over $200 million in tax rebates were granted to Disney to help finance the construction of California Adventure and a parking garage. The five workers who filed the lawsuit earned between $12 to $14.25 per hour working at the resort, according to the complaint.
Disney maintained it’s not covered by Measure L. It argued that the word “rebate” as defined in the ordinance is limited to the return of taxes paid by residents. The court sided with the entertainment giant, finding that it doesn’t enjoy a city subsidy.
Last year, a state appeals court reversed the decision. A three-judge panel of California’s 4th District Court of Appeal, citing employee protections in the measure, concluded that the 1996 agreements constitute subsidies since they afford Disney the “right to receive a return of taxes.” The state Supreme Court declined to review the case.
Disney and lawyers representing the workers on Friday moved for court approval the deal. A judge will consider the agreement at a hearing next month.
In a statement, a Disneyland spokesperson said that all cast members “make at least the Measure L requirement of $19.90 per hour, and, in fact, 95% of them make more.” She added, “We are pleased that this matter is nearing resolution.”
In July, Disney negotiated an agreement with Master Services — Disneyland’s largest union representing more than 13,000 cast members who work in attractions, custodial and merchandise — that raised base pay to $24 per hour.
A 2018 survey from Occidental College and Economic Roundtable found that Disneyland employees reported high instances of homelessness, food insecurity and low wages. Nearly 75 percent of respondents said they don’t earn enough money to pay for basic expenses, with ten percent saying that they’ve recently been homeless or didn’t have a place of their own to sleep. More than 85 percent of union workers earn less than $15 per hour, it concluded.
The settlement was reached after Disney last month agreed to pay $43.25 million to settle a class action from roughly 9,000 female employees in California who accused the company of pay discrimination. Under the deal, Disney will retain experts to address “significant pay differences” using a model commissioned by lawyers representing the women.
