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After a lengthy five-year legal dispute concerning allegations of failing to meet minimum wage standards, Disney has agreed to pay $233 million to resolve a class action suit that represents over 50,000 underpaid employees at Disneyland.

Randy Renick, an attorney for the workers, stated, “This settlement will provide substantial compensation to those workers, positively affecting their lives as well as the health and well-being of their families.”

The lawsuit was initiated following the approval of Measure L by Anaheim voters in 2018, which mandated that hospitality businesses receiving tax rebates must raise the minimum wage to $15 per hour, with future increases tied to inflation. In response to this initiative, Disney sought to terminate $267 million in subsidies for a luxury hotel to avoid compliance. Josh D’Amaro, the chairman of Disney Parks, also called for the abolition of a long-standing freeze on entertainment taxes.

Workers submitted a proposed class action lawsuit in Orange County Superior Court, referencing agreements made with Anaheim in 1996 that resulted in over $200 million in tax rebates to Disney to fund the construction of California Adventure and a parking garage. According to the complaint, the five workers who filed the lawsuit earned between $12 and $14.25 an hour while working at the resort.

Disney contended that it was not subject to Measure L, arguing that the term “rebate” in the ordinance pertains solely to the return of taxes paid by residents. The initial court ruling favored Disney, concluding that it did not benefit from a city subsidy.

However, last year, a state appeals court overturned that decision. A three-judge panel from California’s 4th District Court of Appeal determined that, due to employee protections outlined in the measure, the 1996 agreements qualify as subsidies because they grant Disney the “right to receive a return of taxes.” The state Supreme Court chose not to review the case.

On Friday, Disney and the lawyers representing the workers filed for court approval of the settlement. A judge is scheduled to review the agreement at a hearing next month.

A spokesperson for Disneyland commented that all cast members “earn at least the Measure L requirement of $19.90 per hour, with 95% earning more.” They added, “We are glad that this matter is approaching resolution.”

In July, Disney reached an agreement with Master Services, the largest union at Disneyland that represents over 13,000 cast members in attractions, custodial, and merchandise roles, to increase base pay to $24 per hour.

A 2018 survey conducted by Occidental College and Economic Roundtable revealed alarming rates of homelessness, food insecurity, and low wages among Disneyland employees. Nearly 75% of respondents indicated they do not earn enough to cover basic expenses, with 10% reporting recent experiences of homelessness or lack of a stable sleeping arrangement. More than 85% of union workers were found to earn less than $15 per hour.

The settlement follows Disney’s agreement last month to pay $43.25 million to resolve a class action from about 9,000 female employees in California who alleged pay discrimination. As part of the settlement, Disney will engage experts to address “significant pay differences” based on a model developed by the lawyers representing the women.

 

Person: Randy Renick, Josh D’Amaro
Company Names: Disney, Master Services
Titles: Measure L, California Adventure

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