Disneyland Resort Gets Hit With Class-Action Lawsuit Alleging Workers Are Not Paid a Living Wage Under New Tax Laws

Disneyland Resort in California is getting hit with a class-action lawsuit filed by workers of the park, alleging that they are not being paid a living wage, as dictated by local tax laws according to LA Business Journal.

What’s Happening:

  • Filed in Orange County Superior Court, the lawsuit alleges that the Disneyland Resort has violated “Measure L,” a measure that took effect January 1st, 2019, which requires hospitality businesses in Anaheim’s resort district that are benefiting from a city subsidy pay workers a minimum of $15 an hour
  • The lawsuit states that Disneyland is benefiting from a city subsidy since Anaheim is using tax dollars, most of which come from Disney’s $35 million in revenue from the parking garage (and some from bed taxes throughout Anaheim)  to pay off construction bonds for a six-story parking garage at the resort. After the 40-year bond has been paid off, the city has agreed to transfer ownership of the garage to the Disneyland Resort
  • Officials from the city of Anaheim as well as Disney have argued that their agreement that dates back to 1996 to build the garage does not actually fit the definition of a subsidy because it doesn’t return any of the taxes directly back to the Disneyland Resort.
  • Unite Here Local 11, which represents workers across the Disneyland Resort, has argued that the financing deal for the garage actually does fit the description of a city subsidy.
  • Disney had an agreement with Anaheim that allowed it to be reimbursed $267 million in hotel taxes if it went through with construction of a luxury hotel at the resort. In another deal, the city of Anaheim agreed not to adopt any entertainment taxes for 30 years as long as Disney agreed to invest one billion dollars into the resort. Months before Measure L’s approval by voters in November 2018, Anaheim City Council voted to end the two tax-subsidy deals.
  • Measure L also says that every January 1st until 2022, there must be an increase in wages by 1.00 until wages reach 18.00 an hour, when annual raises would be attached to cost of living increases.
  • The class-action lawsuit also names various subcontractors of the Disneyland Resort, including Sodexo and Sodexomagic who operate restaurants and coffee shops around the resort.
  • The lawsuit was filed by 5 different employees, one from a Starbucks operated by Sodexo, a bellhop, a makeup artist, a cashier, and an event server, who along with 400 current and former employees who can collectively be owed millions of dollars in back-pay if the this is approved as a class-action lawsuit.

What They’re Saying:

  • Disneyland spokeswoman Liz Jaeger in a statement to the L.A. Times: “We have yet to see the lawsuit, but the union coalition is well aware that the [Anaheim] city attorney has previously looked at the issue and clearly stated that Measure L does not apply to the Disneyland Resort.”