Disney to Pay $233 million to Settle Wage Theft Lawsuit

Anaheim, CADisney has agreed to pay $233 million to settle a California labor class action lawsuit that will affect over 50,000 current and former employees, including Cast Members directly employed by Disney and employees working for contractors such as Sodexo. The settlement ends a wage theft lawsuit originally filed five years ago alleging the company failed to comply with Anaheim's $15 minimum wage ordinance. After duking it out with union cast members last summer, Disney agreed to raise their base pay to $24 per hour.

Law360 estimates that the settlement will provide an average recovery of about $3,489 to each worker. And the workers urged the court to approve this payout, saying in a motion that it "is an outstanding result compared with what plaintiffs might obtain at trial." The Los Angeles Times on December 13 reported that Disney approved the preliminary settlement, which adds in back pay with interest. An attorney representing the workers told the LA Times that, “What we believe is the largest wage and hour class settlement in California history will change lives for Disney families and their communities.” He lambasted Disney, saying that “voters demanded that companies like Disney, who take public handouts, pay their workers a living wage. Disney should not get a pass.”

Another attorney for the plaintiffs told Law360 that the settlement is “outstanding” and their clients “beamed through smiles and tears as they expressed how thrilled they were that they and their co-workers would be paid the wages they were owed… Paying workers a living wage makes Disneyland a happier place.”

KTLA reported that the money is “life-changing” for a Fairy Godmother’s Apprentice at Bibbidi Bobbidi Boutique in Disneyland. “I have two small children, and getting potentially thousands of dollars in back wages I’m rightfully owed gives me peace of mind that I have money in case of an emergency or savings for their future,” Michi Cordell told KTLA. We’ve shown throughout these five years, and especially this last year in contract negotiations, that when we stand up for what we deserve, together, we can accomplish anything.”

Measure L Violation

About $105 million of the settlement accounts for back pay with interest owed from January 1, 2019, when Measure L went into effect, until the date Disney adjusted wages last year.

Five Disney cast members originally filed a wage theft lawsuit in 2019 claiming that the Walt Disney Company violated Measure L, also known as the Living Wage Ordinance, which was placed on a ballot thanks to a petition led by a coalition of Disney unions and adopted by Anaheim voters in 2018. It applied to hospitality employers in the Anaheim or Disneyland Resort areas who benefited from city subsidies (businesses that receive tax subsidies and their subcontractors) to pay employees at least $15 an hour beginning Jan. 1, 2019.

In July 2023, a California panel ruled that Disney was required to follow the city's Living Wage Ordinance because a pair of agreements the company signed with Anaheim allowed the company to receive a tax rebate from the city. Instead, Disney appealed to the state's high court justices, who decided to stay out of the case in late 2023. Measure L is set to increase minimum wage pay to $20.42 on Jan 1, 2025 in Anaheim.

The case is Kathleen Grace et al. v. The Walt Disney Co. et al., case number 30-2019-01116850, in the Superior Court of the State of California, County of Orange.