Disney Settles Gender Pay Lawsuit for $43 Million, Impacting Thousands of Female Workers

Across industries, workers often face pay disparities that can lead to financial struggles, stress and a sense of injustice. Unfortunately, unequal pay is not uncommon, even at some of the largest and most recognizable companies. The recent $43.25 million settlement by the Walt Disney Company is a stark reminder that even industry giants are not immune to allegations of unlawful pay practices.

Disney agreed to resolve a class-action lawsuit claiming that the company systematically paid female employees less than male workers in similar roles for almost a decade. The settlement affects thousands of women.

The lawsuit began in 2019 when LaRonda Rasmussen, a Disney financial analyst, discovered she was earning significantly less than six of her male counterparts in the same position. Despite having years of experience, Rasmussen learned that one of her male colleagues was earning $20,000 more annually even though he had fewer years on the job.

After voicing her concerns, Rasmussen received a $25,000 raise, which still failed to match the average salary of her male peers. Her decision to file the lawsuit against Disney ultimately brought attention to widespread inequities within the company.

The case gained traction as more women joined, leading to a California judge granting class-action status in December 2023. Around 9,000 current and former non-union, salaried Disney employees were included. They spanned roles in the company’s California-based operations, including theme parks, cruise lines and studios. Nine women were named as class representatives.

The employees alleged that Disney’s policy of basing starting salaries on prior pay perpetuated gender-based wage disparities, with newly hired women being paid lower starting salaries than men. This practice often disadvantages women, as their historical earnings are more likely to reflect past gender discrimination in pay.

Supporting the plaintiffs’ claims through a commissioned study, a labor economist analyzed data from 2015 to 2022 and found that women at Disney earned an average of 2.01 percent less than their male counterparts. While Disney disputed the findings and did not admit wrongdoing, the company ultimately agreed to settle the case.

The settlement goes beyond financial compensation, requiring Disney to implement changes to prevent future disparities. Over the next three years, Disney must hire a labor economist to conduct pay equity studies and an outside consultant to train employees on benchmarking pay levels. These measures aim to ensure fair pay practices and reduce the likelihood of similar issues in the future.

California has strong laws protecting workers from pay discrimination, such as the California Equal Pay Act. Strengthened in 2016, the law prohibits employers from basing salaries on prior pay and requires equal pay among workers for substantially similar work. 

Wage disputes are not limited to gender disparities. They can also arise from a worker’s personal characteristics, such as age, race or disability. For example, an employer may discriminate against an older employee by paying them less than a younger worker who is less qualified or inexperienced. Employees may also face unlawful retaliation from their employer for speaking out about unfair pay practices. The California Fair Employment and Housing Act protects workers from discrimination based on certain protected personal characteristics.

Standing up to a large employer is rarely easy. However, it is possible with the help of an experienced employment law attorney who can obtain the best possible outcome in your case.

When workers experience similar employment violations, it sometimes makes sense for them to take legal action against their employer as a group. In this case, thousands of workers at Disney were subjected to the same or similar unfair pay practices. As a result, they filed a class-action lawsuit to hold their employer accountable.

If you believe you are being subjected to unlawful pay practices, you do not have to deal with the issue alone. An experienced Oakland employment attorney can help you understand your rights and take legal action to recover what you are owed. While Erlich Law Firm was not involved with the Disney class-action lawsuit, we are ready to assist with your employment dispute. Contact us today for a free initial consultation to discuss your case.