Disney is faced with a $43.3 million lawsuit settlement after it was accused of paying its male and female staff differently. The Disney pay gap settlement came after a case was filed against the company alleging that its female employees had earned $150 million less than the male employees over an eight-year period.
The suit was originally fined in 2019 by a single plaintiff, however, over 9,000 current and former female employees later joined the Disney gender pay lawsuit. Along with paying out the settlement fee, Disney has agreed to make other changes to monitor and equalize the pay going forward.
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Disney Pay Gap Settlement Marks a Victory for the Company’s Female Employees
LaRonda Rasmussen was the first to file the pay inequality lawsuit against Disney in April 2019, when she learned that six other men who held the same job title as she did were earning significantly more than her. She also discovered that one of them had considerably less experience than she did, but was still paid $20,000 a year more than her. Karen Moore has also been credited for initiating the wage disparity case along with Rasmussen.
Around 9,000 current and former female employees soon added their names to the cause, risking their careers to fight for their own rights as well as those of other women who were likely also victims of the alleged pay disparity at Disney.
Disney Denies Having any Issues with Pay Disparity
Data from the company’s HR team ranging from April 2015 to December 2022 was analyzed by a professor from the University of California Irvine, David Neumark, who found that female employees were in fact paid 2% less than their male counterparts.
Disney, for its part, has largely disputed the allegations, providing a statement to CNN, “We have always been committed to paying our employees fairly and have demonstrated that commitment throughout this case, and we are pleased to have resolved this matter.” Disney’s $43 million lawsuit settlement is a win for the company’s female employees despite the company’s claim that it has always paid a fair wage.
Disney to Make Structural Changes as Part of the Gender Pay Lawsuit
As part of the Disney pay gap settlement fine, the company will likely pay affected female employees $3,000 each, with the net awards calculated to be $1,800 after considering legal costs. This sum is not standard for all the affected employees as the highest projected net award is set to be $15,000 while the lowest sum is said to be around $200.
Apart from the $43 million lawsuit settlement fine, Disney will also be expected to recruit an external labor economist who will be tasked with reviewing pay equity within the company for the next three years. The economist will keep an eye on the pay of full-time, non-union California employees who work below the vice president level.
Another psychologist is also to be hired to train the company’s compensation staff on the best practices that can be used to ensure the job pay is aligned with the external market rates.
The finalization of this settlement will only occur after a court hearing on January 10, 2025, where a judge will have to approve the agreement between the two parties. If approved, Disney will have to reassess how it operates and establish a new era of work.
