After a five-year legal battle, Disney has agreed to pay $233 million to settle a class action lawsuit that represents over 50,000 underpaid Disneyland workers. This settlement comes after claims that the company had been avoiding minimum wage requirements. Randy Renick, an attorney for the workers, expressed that the settlement would provide substantial compensation for employees, significantly improving their lives and the well-being of their families.
The lawsuit stemmed from Anaheim voters’ approval of Measure L in 2018. This ordinance required hospitality businesses receiving tax rebates to raise the minimum wage to $15 per hour, with increases tied to inflation. Following the passage of Measure L, Disney sought to avoid this mandate by ending a $267 million subsidy for a luxury hotel. Disney also pushed to end a long-standing moratorium on entertainment taxes, actions that prompted the lawsuit.
The lawsuit was filed by workers in Orange County Superior Court, who pointed to a series of agreements from 1996 between Disney and Anaheim. These agreements resulted in more than $200 million in tax rebates, which helped finance the construction of California Adventure and a parking garage. The five workers involved in the lawsuit were earning between $12 and $14.25 per hour at the resort.
Initially, Disney argued that Measure L did not apply to them, claiming that the ordinance’s definition of “rebate” was limited to taxes paid by residents. The court ruled in favor of Disney, asserting that the company did not benefit from a city subsidy. However, a state appeals court reversed this decision in 2023. The court determined that the 1996 agreements qualified as subsidies since they granted Disney the right to receive a return of taxes. The California Supreme Court declined to review the case, leading to the settlement.
On Friday, Disney and the workers’ attorneys filed a joint motion for court approval of the settlement. A judge will review the agreement in a hearing scheduled for next month.
A Disneyland spokesperson clarified that all employees currently earn at least the $19.90 per hour required by Measure L, with 95% of workers earning more than that. The spokesperson expressed satisfaction that the issue was nearing resolution. Additionally, in July, Disney reached a deal with Master Services, Disneyland’s largest union, which represents over 13,000 employees in attractions, custodial, and merchandise departments. This agreement raised the base pay for union members to $24 per hour.
A 2018 survey by Occidental College and the Economic Roundtable highlighted challenges faced by Disneyland employees, with high rates of homelessness and food insecurity. The survey found that nearly 75% of workers struggled to cover basic living expenses, and about 10% reported recent homelessness. More than 85% of unionized workers earned less than $15 per hour at that time.
The settlement comes shortly after Disney agreed to pay $43.25 million to resolve a separate class action lawsuit from around 9,000 female employees in California who accused the company of pay discrimination. As part of the agreement, Disney will engage experts to address the significant pay disparities using a model developed by the women’s attorneys.
