Disney owes female workers more than $150m in wages, pay gap suit alleges

The Walt Disney Company has systematically underpaid women, depriving female employees of more than $150m in wages in California since 2015, according to a new analysis of salary data carried out as part of a class-action lawsuit alleging widespread pay gaps at the company.

Attorneys for a group of women suing Disney alleged in state court in Los Angeles on Friday that the entertainment and media corporation has paid women on average 2% less than men doing equivalent jobs, in violation of California’s Equal Pay Act.

The analysis is based on salaries for non-union employees below the vice-president level and includes workers at Disney Studios, parks and resorts, its music label, Disney+, ABC, Lucasfilm, Searchlight Pictures and other major entities that the lawsuit says are all subject to the same compensation system.

The estimate that women are owed $151.6m was revealed in the attorneys’ motion for class certification for the more than 10,000 women employed by those Disney entities from 2015 to the present. The case excludes Hulu, ESPN, Pixar, 21st Century Fox and several other brands that have distinct pay policies or were recently acquired and cannot be fairly compared to the rest of the corporation, the lawyers say.

The case was first filed in 2019 alleging an “egregious gender pay gap that appears to be engrained in Disney’s culture”. LaRonda Rasmussen, a manager of product development for Disney, and the plaintiff who the case is named after, alleges that six men with the same title were receiving between $16,000 to nearly $40,000 more than her. A senior manager for Disney music publishing said she learned she was earning $25,000 less than some men with equivalent titles. Other women allege that they faced discrimination when they were denied promotions, given smaller raises than men, or were classified in lower-ranking jobs compared with men doing similar work.

Out of nine named plaintiffs, five are women of color.

The new statistical analysis was conducted by David Neumark, a University of California, Irvine labor economist and pay gap expert hired by the plaintiffs. His report filed with the court said his comparisons of men’s and women’s salaries controlled for job levels, tenure and other factors that could affect pay, meaning the disparities he uncovered stemmed from gender discrimination.

The pay disparities were due in part to Disney’s consideration of prior salary in setting starting pay for new hires and its practice of setting annual merit raises as a percentage of salary, further widening the gender gaps. Neumark reported that the gender pay gap was 4.36% when Disney relied on prior pay to set starting salary and after it stopped that practice in late 2017, the pay gap decreased.

Neumark wrote that the $151m estimate was significantly lower than the damages affected women would be owed, which would include significant interest charges.

“This year is Disney’s 100th anniversary and it’s high time that Disney gets serious about addressing the persistent gender wage gap that we have now documented,” said Lori Andrus, attorney for the women, whose firm has taken on Intel and previously won a $4m pay gap settlement against Farmers Insurance. For the plaintiffs, some of whom continue to work at Disney, she added, “It’s pretty demoralizing and especially damaging when it’s coming from a brand like Disney that women in America idolize. They love their jobs. They love the content that Disney produces and they just want to be paid fairly.”

Shawna M Swanson, associate general counsel and head of the employment law function for Disney, denied the latest allegations in an email on Friday, saying, “The plaintiffs’ assertions about an alleged pay gap between women and men are simply false, which we will demonstrate through the litigation.” Spokespeople did not address the specific claims in Neumark’s analysis.

The company has previously defended its “robust pay equity practices and policies”, and under pressure from some shareholders last year, released its own pay gap report, which said women are paid nearly identically to men.

The case is one of many pay gap class-actions against high-profile companies in recent years. Google settled a class-action gender discrimination case last year and agreed to pay $118m. In May, Goldman Sachs agreed to pay $215m to settle a case alleging widespread gender discrimination in salary and promotions.