Disney cast members could see their pay increased to nearly $20 an hour following a California appellate court ruling this week that found the resort illegally skirted a 2018 voter-approved living wage measure.
Measure L required businesses that receive subsidies from Anaheim to raise wages to at least $15 an hour in 2019, with $1 annual increases through 2022 and cost-of-living hikes after that.
Cast members sued in 2019, arguing the measure applied to Disney, but the company had failed to follow it.
Then in October 2021, Orange County Superior Court Judge William D. Claster said that while Disney benefited from 1996 agreements with Anaheim that use hotel taxes to pay debt on a parking structure for Disneyland visitors, those agreements don’t constitute a tax rebate or a subsidy as described in the ballot measure.
On Thursday, July 13, a three-judge panel for California’s Fourth Appellate District disagreed with that interpretation.
Under an agreement tied to the parking structure deal, Disney agreed that if there was any year in which the city’s incremental tax revenues failed to meet its bond obligations, Disney would make up the shortfall. Additionally, the parties agreed Disney would be reimbursed for its shortfall payments in those years when the city’s incremental tax revenues rebounded.
“Consequently, 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.”
Mike Lyster, a spokesperson for the city of Anaheim, said Friday the city “respectfully” questions the appellate court’s interpretation, and needs time to analyze the decision.
A Disney spokesperson declined Friday to say whether the company will appeal the decision, adding it is “reviewing the opinion and considering our options.”
The ruling is a monumental victory for Disney workers, who have been fighting for better wages and benefits, said attorney Richard McCracken, who represented the plaintiffs in the lawsuit and subsequent appeal.
“The only really surprising aspect of this case is how much effort Disney has devoted to avoiding paying all its employees at least $15 an hour,” he said in a statement. “The Living Wage Ordinance was clearly aimed at large hospitality employers, and Disney is, of course, the most prominent. The Court of Appeal has carried out the intentions of the Anaheim voter.”
The ruling affects Disney park, hotel, and food service workers employed by Sodexo.
“Disney’s ongoing refusal to pay more than 25,000 employees a living wage has resulted in this case becoming one of the largest living wage class action lawsuits,” said attorney Sarah Grossman-Swenson, who is McCracken’s co-counsel.
Several cast members praised the appellate court ruling. “Earning a living wage would mean I could help plan for my future and get out of poverty,” said Damien Valdovinos, a cashier employed by Sodexo.
Those sentiments were echoed by Javier Terrazas, a banquet server at Disneyland who lives in Garden Grove.
“It feels great,” said Terrazas, a father of five. “All this time we’ve been waiting for Disney to follow Measure L. I’m glad the court has agreed with Disney workers.”