EXCLUSIVE: Fireworks might be about to go off at the Walt Disney Company this Fourth of July weekend, at least legally.
More than four years after Walt Disney Studios staffers LaRonda Rasmussen and Karen Moore first filed a complaint accusing the Mouse House of discriminating against female workers by paying them less than men, attorneys for the duo and other women are today asking a California judge to allow them to turn the matter into a class-action suit.
In a widely redacted filing on the potentially sprawling matter (read it here), plaintiffs’ attorney Lori Andrus and Joseph M. Sellers and Christine E. Webber of D.C.-based Cohen Milstein Sellers & Toll figuratively seek to make up for lost time by cut straight to the chase:
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Disney systematically pays women in California less than men. This pay disparity is not based on legitimate factors, it is based on sex, with a less than one in one billion chance it occurred in the absence of discrimination. The class as a whole was thus deprived of over $150 million in wages. Disney violated the Fair Employment & Housing Act (“FEHA”) because its common practices caused a disparate impact on women. It also violated California’s Equal Pay Act (“EPA”), which does not require Plaintiffs to identify the cause of the disparities, because it pays women less for substantially similar jobs. Accordingly, Plaintiffs seek certification of a class of non-union, female employees in California, below the level of Vice President, challenging sex discrimination in compensation at Disney on or after April 1, 2015.
The document goes on to add:
Only as a class can the women at Disney address wage gaps and receive effective injunctive and monetary remedies. Injunctive relief to address systematic disparities is unattainable through individual actions as the scope of relief would be limited to the scope of the violation shown, and an individual plaintiff would not obtain the breadth of discovery of a class. And many class members are unlikely to bring individual actions.
“We are pleased to be taking the next step in this important litigation,” Andrus told Deadline on Friday. “As our experts explain, women who work for Disney face a persistent gender wage gap. Over the last eight years, that has added up to more than $150 million in stolen wages.”
Big surprise (a.k.a. no surprise at all), Disney sees it differently.
“The plaintiffs’ assertions about an alleged pay gap between women and men are simply false, which we will demonstrate through the litigation,” said Shawna M. Swanson, Associate General Counsel and head of the employment law function for company this afternoon.
Since this case began in 2019, Disney has sought to swat away or silence the initial plaintiffs’ claims of institutional discrepancy and move for back pay, lost benefits and other compensation as “an assortment of individual claims, based on highly individualized allegations” that are best addressed internally individually.
Still, the company has been unsuccessful in getting the matter tossed out of court.
Perhaps even more unsettling to Disney is that portions of a 2017 pay-equity study the company conducted were allowed into this case, as well as a boatload of other corporate documents – which is one reason today’s filings are so heavily blacked out on almost every page.
According to the 28-page filing, the average discrepancy in wages at Disney works out to about 2.5% less for women than men since 2017 (when the company stopped using prior salary levels as part of “setting starting pay” and “the disparities in starting pay shrunk substantially”).
Even with what appears to be a lowest common denominator strategy for apples to apples that the plaintiffs are taking, the numbers escalate once put on a spreadsheet.
“There are 12,511 women employed at Disney in Covered Positions in the Class Period, for an average of 4.38 years,” says an expert report from economics professor David Neumark from the University of California, Irvine. “Thus, the estimated pay penalty implies cumulative underpayment of covered women in the Class Period of approximately $151.6 million,” adds Neumark’s regression model analysis that accompanied the motion for class certification today (read it here).
In a Hollywood already rocked by labor strife and deep job cuts, that $151.6 million could get much bigger if this case doesn’t go Disney’s way.
Were the suit to be certified as a class action by L.A. Superior Court Judge Elihu M. Berle at a proposed November 15 hearing, and were the plaintiffs to be successful at trial, that $151.6 million could double to $300 million under stipulations of the Golden State’s Equal Pay Act. Also, the judge could add significant further damages and sanctions.
Now, a 2.5% gap might not seem a lot, especially at a company where the average pay is estimated to be $137,617 for men in the same jobs as the proposed class. However, the apparent reality is starting wages for females at at Disney are noticeably lower and a 2.5% difference (about $1,875) on pay of $75,000 or less truly does cut into the take-home package after taxes, deductions and more.
For a variety of reasons, across the period stretching from 2015 to now, the proposed class action does not include “Hulu, ESPN, Pixar, 21st Century (Fox), FX, National Geographic [or] Bamtech” employees. Additionally, “bonuses and long-term incentive pay” have not by probed by Neumark.
However, now taking direct reports from recently appointed SEVP and Chief Human Resources Officer Sonia Coleman in such areas, past and current CEO Bob Iger does get tainted in today’s filing for his “direct control” role in the company. “In addition to controlling Disney’s organization into segments, the CEO exercises direct control over many aspects of employment, including by directing the return to in-person work, establishing a hiring freeze, imposing travel restrictions, and, most recently, requiring layoffs,” the filing states. It calls out Iger and to some extent his successor and predecessor Bob Chapek in Disney’s systematic “global job classification system and company-wide pay philosophy.”
BTW – you might be wondering why this class-action certification motion is only happening now after being first filed in April 2019. Chalk it up to a combo of the Covid pandemic shutting down and then backlogging the courts and the retirement of LASC Judge Daniel Buckley from the bench and the case a couple of years ago. As the plaintiffs took dozens of depositions, the matter was bounced around from one judge to another before landing in Berle’s courtroom – which is where the action will be at that November hearing.
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