25,000 Disneyland Employees In Class Action Lawsuit Alleging Underpaid Wages

Scarlett Johansson is not the only person who has a bone to pick with Walt Disney Co DIS regarding a salary dispute.

More than 25,000 current and former employees of Disneyland have joined in a class action lawsuit alleging that they have been underpaid while the resort has received tax breaks from Anaheim's city government.

What Happened: The lawsuit was filed in 2019 — the original litigation involved five Disneyland employees — and was recently granted class action status by the Orange County Superior Court.

The plaintiffs argue Disney is in violation of Measure L, which was approved by voters in 2018 and requires Anaheim resort businesses and their subcontractor to pay employees a living wage if they are receiving local tax subsidies. Measure L took effect when the living wage was set at $15, and the wage is supposed to increase $1 per year through 2022, when raises are then transitioned to correspond with the cost-of-living index. California’s minimum wage is $14.

The lawsuit covers Disney and contractors including Sodexo and SodexoMagic, which operate the dining venues at Disneyland.

“I think the issues here are simple: The voters demanded that companies like Disney, who take public handouts, pay their workers a living wage,” said Randy Renick, the attorney who filed the lawsuit, in a Los Angeles Times interview. “Disney should not get a pass.”

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What Else Happened: At the heart of the lawsuit is the construction of the Mickey and Friends garage at Disneyland, which Anaheim financed through the issuance of municipal bonds that are primarily being repaid by Disney’s taxes and the hotel room taxes collected by the city. The garage’s construction budget was over $100 million, and Disney leases the property from the city for $1 per year while charging a minimum of $25 per car.

Renick claimed this arrangement constitutes a city subsidy because Disneyland retains all revenue for the garage even though it was financed by the city.

“Instead of going to the City for general purposes, almost all of Disney’s transient occupancy, sales and real property taxes go to payments on the bonds, which will not be paid off until 2036,” Renick said. “Disney got a rebate of the best kind: it got its taxes back before it paid them.”

Disney didn't publicly comment on the lawsuit, but Anaheim is backing Disney on this issue, with city spokesman Mike Lyster insisting the “public-private partnership of the 1990s with the city and Disney does not fall under the tax rebate language of Measure L.”

The lawsuit represents another public relations problem for Disneyland’s relationship with its workforce. In 2018, a report published by the Coalition of Resort Labor Unions found 85% of union workers at Disneyland earned less than $15 an hour, with many employees facing issues of food insecurity and homelessness due to their low wages.