Entrance to Disneyland Resort, Anaheim, California
ORANGE COUNTY, CALIFORNIA - Disney will pay $233 million to settle claims it underpaid tens of thousands of workers at its Disneyland theme park, after a superior court judge signed off on the deal.
On Sept. 17, Orange County Superior Court Judge William Claster granted final approval to the deal, crafted to end a court fight accusing Walt Disney Co. of not paying enough to its theme park employees to satisfy the city of Anaheim's so-called "living wage" ordinance.
Under the deal, workers will reportedly receive all of the income they allegedly lost under Disney's alleged insufficient pay structure, a total of about $141.5 million of the total payout.
The lawyers who led the legal action will receive nearly $35 million of the total, or 15% of the total settlement.
The state of California will also receive about $17.5 million of the total, paid as penalties under California state law which empowers private lawyers to essentially sue in the name of the state over alleged violations of California labor law. Under that law, known as the Private Attorney General Act (PAGA), the state claims 75% of such claims under state law, with workers and their lawyers sharing the remaining 25%.
Workers will receive about $5.8 million under the PAGA claims.
The lawsuit landed in Orange County court in 2019, when attorneys for the firms of McCracken Stemerman & Holsberry, of Oakland; and Hadsell Stormer Renick & Dai, of Pasadena, filed suit on behalf of class of more than 51,000 Disneyland workers.
Named plaintiffs in the action included Kathleen Grace, Regina Delgado, Patricia Grijalva and Javier Terrazas.
The lawsuit claimed Disney had underpaid workers under the rules laid out in Anaheim's "living wage" ordinance, established by voters under a ballot referendum known as Measure L.
The lawsuit also lodged PAGA claims, accusing Disney of violating workers' rights under California state labor law.
Essentially, the lawsuit claimed Disney had not raised employee wages to a minimum level required under Measure L, an amount which exceeded California's already high minimum wage.
Today, the California state minimum wage is $16.50.
However, under Measure L, the minimum wage for workers, such as those at Disneyland, stands at $20.42, and is adjusted annually for inflation. That wage rule applies to any hospitality employers, including Disneyland Resort Areas, which the city says benefits from a city subsidy.
When Measure L passed, it set the new Measure L minimum wage at $15, increasing by $1 per year until 2023, when it would be increased annually to account for inflation.
The plaintiffs asserted Measure L should apply to Disney because it had received more than $200 million to help finance the construction of its California Adventure park, as well as a new parking garage.
The subsidies are secured by bonds repaid with and secured by taxes levied on Disney. Those bonds will be paid off in 2036, according to court documents.
Disney sought to dismiss the lawsuit, asserting it did not believe Measure L's rules should apply to Disneyland, because they argued the measure was "not intended to apply to businesses that do not have a right to a tax rebate from the city of Anaheim."
However, that argument failed at all levels in California courts, as Judge Claster and a California state appeals panel said they believed the Disney is still receiving assistance from the city of Anaheim sufficient to bring it under Measure L's more stringent requirements.
After the California Supreme Court refused to review the ruling, Disney said it brought all of its Disneyland employees into compliance with Measure L and then entered into settlement talks with the plaintiffs.
The parties introduced the settlement agreement in Orange County court in late 2024.
The settlement will include more than 51,000 Disneyland employees, according to court documents.
Disney has been represented in the action by attorneys Alan Schoenfield, Ryan Chabot and David C. Marcus, of the firm of Wilmer Cutler Pickering Hale and Dorr.
Plaintiffs have been represented by attorneys Richard G. McGracken, Sarah Grossman-Swenson and Ivy Yan, of the firm of McCracken, Stemerman & Holsberry; and Randy Renick and Cornelia Dai, of Hadsell Stormer & Renick & Dai.
