A proposed class action lawsuit claims The Walt Disney Company and Walt Disney Parks and Resorts, US Inc. have failed to pay employees at Disneyland Resort the proper hourly minimum wage as required by Anaheim’s Living Wage Ordinance (LWO).
According to the case, the Anaheim LWO required all hospitality businesses such as hotels, restaurants and theme parks that receive subsidies from the city to pay employees a minimum wage of at least $15 per hour effective January 1, 2019. The case claims that despite receiving “massive subsidies” from the city, Disney, along with co-defendants Sodexo, Inc. and SodexoMAGIC, LLC, has failed to comply with the mandatory Anaheim LWO minimum wage, with certain employees earning rates as low as $12 per hour. Filed in Orange County Superior Court, the lawsuit additionally contends that, as a consequence of their non-compliance with the LWO, Disney and Sodexo violated California’s Labor Code by failing to pay the proper time-and-a-half overtime and full wages upon separation to those who were terminated or resigned.
The case spills a good deal of ink elaborating on a 1996 agreement between Disney and the City of Anaheim in which the city agreed to give the company hefty tax rebates to help subsidize its construction of the California Adventure theme park and an accompanying parking garage. As Anaheim’s municipal code defines a city subsidy as “any agreement with the city pursuant to which a person other than the city has a right to receive a rebate of transient occupancy tax, sales tax, entertainment tax, property tax or other taxes,” the suit argues that Disney is subject to the requirements of the LWO as a result of the 1996 agreement.
The more than $200 million Anaheim gave Disney to help finance the construction of the theme park and parking garage was raised through the issuance of municipal bonds secured and paid off by Disney’s taxes, the lawsuit explains. Nearly all of Disney’s city taxes are used to make payments on the bonds, which, the case claims, will not be paid off until 2036.
According to the complaint, California taxpayers footed the bill for over $208 million worth of improvements to Disney property, including $90 million for the construction of the California Adventure parking garage alone. The case stresses that Disney received massive rebates on its taxes for the projects and, considering the defendant received the money up front, the total time-value amount of the rebate is now over $500 million, including interest from the bonds.
The lawsuit looks to represent a class covering “all nonexempt current, former, and future individuals employed by Defendants in Disney theme park and hotels in Anaheim, California, who reside in California.”