Disney Settles Gender Pay Discrimination Class Action for $43.25M

Case Overview: Disney has reached a $43.25 million settlement in a class action lawsuit alleging gender pay discrimination against female employees.

Consumers Affected: Female employees in California who worked for Disney or its affiliates since 2015.

Court: Superior Court of the State of California for the County of Los Angeles

Disney has agreed to a $43.25 million settlement to resolve claims it systematically underpaid female employees in California compared to their male counterparts. The agreement, reached after more than five years of litigation, awaits court approval and includes compensation for more than 14,000 women employed by Disney or its affiliates since 2015.

Each eligible participant will receive a minimum of $200, with additional compensation calculated by a labor economist based on job level, tenure, and other factors. The settlement fund also allocates $250,000 for claims under the Private Attorneys General Act, with most of that amount going to the California Labor and Workforce Development Agency. The employees do not need to take action to claim their share.

The settlement also requires Disney to implement several measures to ensure pay equity, including hiring an industrial and organizational psychologist to train compensation personnel and retaining an external labor economist for three years to analyze annual base pay and flag statistically significant pay disparities.

Disney Accused of Gender Pay Discrimination Against Female Employees

The lawsuit, originally filed in 2019, accused Disney of violating California’s Equal Pay Act and labor laws by paying female employees less than men for equivalent work. The class action suit included non-union employees below the vice president level at entities such as Disney Studios, ABC, Lucasfilm, and Imagineering. Exclusions included Hulu, Pixar, and other divisions with separate pay policies.

Plaintiffs claimed that women at Disney earned on average 2% less than men, with some disparities reaching tens of thousands of dollars. They alleged that Disney’s reliance on prior salary to set starting pay, as well as percentage-based annual raises, perpetuated gender-based pay gaps. One analysis estimated that affected women were owed over $150 million in back wages since 2015.

Plaintiffs, including LaRonda Rasmussen, shared personal stories of inequity, with Rasmussen, a product development manager, saying male colleagues with the same title earned $16,000 to $40,000 more than her. Another plaintiff learned she was paid $25,000 less than men in equivalent roles. The suit also alleged women were passed over for promotions, given smaller raises, and assigned lower job classifications compared to men doing similar work.

While Disney denied the allegations, the settlement avoided a trial.

Disney Faces Other Legal Challenges

The settlement comes amid a series of high-profile legal disputes for Disney. Earlier this year, Disney reversed its stance in a wrongful death lawsuit brought by a widower, allowing the case to proceed in court. The lawsuit alleges his wife died from an allergic reaction to a meal at a Disney resort. Initially, Disney attempted to block the lawsuit, arguing that the victim’s husband Disney+ streaming service agreement included an arbitration clause. 

Disney claimed that because he had subscribed to Disney+ and purchased park tickets through the company’s website, he was bound by terms requiring arbitration for any disputes with the company.

This argument was highly unusual and widely criticized for attempting to extend a streaming service’s terms of use to an unrelated matter involving wrongful death. Amid backlash, Disney withdrew its arbitration request and allowed the lawsuit to proceed. 

Disney also resolved a legal battle with Florida Governor Ron DeSantis over control of the Walt Disney World area. The conflict, sparked by Disney’s opposition to Florida’s “Don’t Say Gay” law, ended with new development agreements and both sides dropping lawsuits.

Separately, Disney is defending a lawsuit related to injuries allegedly caused by a water slide at its Typhoon Lagoon park. A woman claims the slide’s design led to an “injurious wedgie,” causing severe physical harm.

Case Details

• Lawsuit: Rasmussen, et al. v. The Walt Disney Company, et al.
• Case Number: 19STCV10974
• Court: Superior Court of the State of California for the County of Los Angeles 

Are you a current or former Disney employee in California? Share your thoughts on the settlement in the comments below.