Disney agrees to $233 million wage theft settlement for Anaheim’s theme park employees

Walt Disney Co. has agreed to settle a wage theft lawsuit for $233 million, ending a five-year dispute over pay for tens of thousands of Anaheim theme park employees.

Randy Renick, an attorney representing the workers in the proposed class-action lawsuit, said on Monday that the settlement would be the largest of its kind in California history.

Disney confirmed it approved the preliminary settlement on Friday.

Also see: Disneyland employees’ economic plight spotlighted in Sundance documentary

According to a Dec. 6 court filing, $179.6 million would go to plaintiffs in terms of back pay and retirement contributions. Another $17.5 million in penalties will be paid to the California Labor and Workforce Development Agency. And $35 million will go toward attorney fees, with the remainder going to administration of the settlement.

The lawsuit arose after Disney claimed it was exempt from Measure L, a 2018 voter-approved living wage initiative. The ordinance required any businesses in the city’s resort district that received city tax subsidies to pay workers at least $15 an hour starting Jan. 1, 2019, with hourly wages rising $1 annually through 2022.

Employees backed by several Disney-based unions filed suit in 2019. A judge in 2021 agreed with Disney, a decision the unions appealed. In July 2023, a three-judge panel for California’s Fourth Appellate District disagreed with that interpretation.

The same judge, Orange County Superior Court Judge William D. Claster, will render a decision on the wage theft settlement in February.

If there are no further appeals, plaintiffs could expect payments in July 2025, according to court documents.

Under terms of the settlement, the wage floor for Disney workers will rise to at least $20.50 hourly, beginning in January.

“We are pleased that this matter is nearing resolution,” Suzi Brown, vice president of communications for Disneyland Resort, said in a statement.

Brown said that cast members at the resort earn at least the Measure L requirement of $19.90 hourly, with 95% of them making more.

In the past year, Disney said that it has taken steps to pay its workers higher wages.

In October 2023, the company said it moved all cast members who “were not at or above the Measure L rate,” to $19.40 per hour, the prevailing rate under the living wage at the time, according to Brown’s statement.

In July 2024, Disney agreed with unions to raise the pay of more than 13,000 cast members who work in attractions, custodial and merchandise to a minimum hourly rate of $24. The wage is more than $4 above the Measure L requirement of $19.90 per hour and $8 more than the California minimum wage of $16.

Plaintiff attorneys Randy Renick of Hadsell Stormer Renick & Dai in Pasadena, and Richard G. McCracken and Sarah Grossman-Swenson of McCracken, Stemerman & Holsberry, in Oakland, were not immediately available for comment on Monday.

The unions backing the lawsuit included United Food and Commercial Workers, the Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers.

Litigation roots

The lawsuit — filed by several resort workers on behalf of 50,000 workers at Disney — had roots in complex discussions that took place between Disney and Anaheim city officials before Measure L was passed.

Anaheim City Attorney Robert Fabela announced about a month before voting day that Disney would not be subject to its rules because it had canceled tax incentive deals that would have sent millions of dollars in hotel guest taxes away from city coffers and back to Disney. Instead of building a luxury hotel complex, the development was dropped.

City leaders said at the time that Anaheim was short on luxury accommodations, and such deals with Disney would help persuade businesses to make the big investment required to build them.

The city was not named in the lawsuit, but the case challenges Fabela’s determination that a 1996 deal – in which Anaheim borrowed $546 million to build the Mickey & Friends parking garage and make street, landscaping and other improvements in the resort – wouldn’t be considered a subsidy as described by the ballot initiative.

The lawsuit from 2019 stated that the parking garage is on Disney property, and operates it and keeps all the revenues.

“When all of the construction costs are paid back, Disney will own the garage free and clear,” the lawsuit stated. “All this was paid for with what Disney would have otherwise paid in taxes.”

The appelate court last year said “… Disney receives a city subsidy within the meaning of the living wage ordinance, and it is therefore obligated to pay its employees the designated minimum wages,” the appellate panel ruled. “Thus, we reverse the trial court’s order granting Disney and (food service contractor) Sodexo’s motion for summary judgment.”