Disney must pay Anaheim employees $15 hourly minimum wages, panel rules

Disney employees minimum wage overview: 

• Who: Walt Disney Parks must follow Anaheim city law and pay its Disneyland Resort employees a living wage, a California state appellate panel has ruled.
• Why: Disney employees sued the company alleging Disney was bound to follow Anaheim City law, while Disney had argued it was exempt.
• Where: The Disney employees minimum wage

Walt Disney Parks must follow Anaheim city law and pay its Disneyland Resort employees a living wage, a California state appellate panel has ruled.

On July 13, a three-judge panel in the Court of Appeal for the State of California Fourth Appellate District reversed a ruling that gave Disney a loophole out of the minimum wage city ordinance. 

The panel found the living wage law does apply to the Disney theme park and resort in Anaheim because the company receives a subsidy from the city.

It pointed to two agreements Disney signed with the city in the late 1990s that allowed the company to receive a tax rebate from Anaheim. As a result, Disney is bound by the terms of the city’s Living Wage Ordinance (LWO), the judges ruled.

“In short, we hold that Disney receives a ‘City Subsidy’ within the meaning of the LWO and is therefore required to pay its employees a living wage. Thus, we reverse the trial court’s order granting the defendants’ motion for summary judgment,” they state in their opinion.

Disney was subsidized by Anaheim taxpayers, judges rule 

In 1996, Anaheim agreed to issue Disney a $400 million bond to revitalize and expand the Disneyland resort district, which would be repaid based on incremental increases in hotel occupancy, sales and property taxes, with Disney paying the latter, court documents state.

Under the agreements, Disney agreed to make up the shortfall if there were any years in which the city’s incremental tax revenues did not meet its bond obligations and to be reimbursed for those shortfall payments in the years when the city’s tax revenues rebounded.

In 2018, Anaheim’s voters adopted Measure L. Starting in 2019, affected employers were required to pay their employees a minimum of $15 per hour under the LWO, with annual increases of $1 an hour. Today, workers in the Anaheim resort district at taxpayer-subsidized businesses are required to be paid nearly $20 an hour under Measure L.

Disney workers in Anaheim sued the company in 2019, alleging that the company violated the LWO. In July 2021, a lower court certified a class of workers and ruled in favor of Disney in a summary judgment. The workers appealed the decision in Dec. 2021, leading to this month’s win in the appeal’s court.

What do you think of the ruling in this Disney class action lawsuit? Let us know in the comments! 

The workers are represented by Richard G. McCracken, Sarah Grossman-Swenson and Ivy Yan of McCracken Stemerman & Holsberry LLP, and Randy Renick and Cornelia Dai of Hadsell Stormer Renick & Dai LLP.

The Disney Anaheim class action lawsuit is Grace et al. v. The Walt Disney Co. et al., Case No. G061004, in the Court of Appeal for the State of California, Fourth Appellate District.

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