Disney Settles $233 Million Class Action for Underpaid Workers

After an extensive five-year legal battle, Disney has agreed to settle a class-action lawsuit by paying $233 million to over 50,000 Disneyland workers. The lawsuit alleged that Disney failed to comply with minimum wage requirements, which originated from a 2018 local California law.

This legal action was initiated after Anaheim voters passed Measure L in 2018, requiring businesses benefiting from tax rebates to increase their minimum wage to $15 per hour, with yearly raises linked to inflation. In response, Disney canceled a $267 million hotel subsidy and advocated for the elimination of a long-standing entertainment tax ban in the city.

Initially, Disney contested its obligation to adhere to Measure L, interpreting the term “rebate” in the ordinance as applicable solely to the return of taxes paid by local residents. However, in 2023, the California 4th District Court of Appeal overturned this interpretation, affirming that the 1996 agreements indeed constituted subsidies.

Consequently, Disney clarified that all current Disneyland workers earn at least the Measure L-mandated $19.90 per hour, with 95% making more. There are ongoing discussions to finalize the $233 million settlement, awaiting court approval next month.

In a related development, Disney also reached a deal with Master Services, the principal union representing Disneyland cast members, to boost the minimum wage for attraction, custodial, and merchandise workers to $24 per hour.

A 2018 survey by Occidental College and the Economic Roundtable uncovered that many Disneyland employees struggled with financial challenges, including heightened rates of homelessness and food insecurity. The survey highlighted that almost 75% of participants couldn’t cover essential expenses, with 10% experiencing recent homelessness. Over 85% of union workers earned less than $15 per hour based on the findings.