Walt Disney’s Female Employees File Sex Discrimination Lawsuit

Los Angeles, CAA group of current and former female employees at Walt Disney Co. claim they were paid at least $150 million less than men in similar middle-management positions, which violates the Fair Employment & Housing Act and California's Equal Pay Act.

In their California labor lawsuit filed in Los Angeles County Superior Court, the women demand equal pay for equal work and are hopeful that the judge will certify their four-year-old civil suit as a class action. About 12,500 current or former fulltime female Disney employees in California who held positions below the level of vice president from 2015 until the present may be affected.

According to the complaint posted by Deadline, plaintiffs LaRonda Rasmussen, Karen Moore, Virginia Eady-Marshall, Enny Joo, Rebecca Train, Amy Hutchins, Nancy Dolan, Pareja Sinn, Dawn Johnson and Chelsea Hanke, Disney “routinely underpays its female employees, passes them over for promotion, piles on extra work without additional compensation, and does not supply sufficient support staff to allow women to succeed at their jobs.”

The case was first filed in 2019 by LaRonda Rasmussen, a manager of product development for Disney. She claims that six men with the same title were paid between $16,000 to nearly $40,000 more than her. And a senior manager for Disney music publishing said she earned $25,000 less than male employees with similar job descriptions. And to top it off, The Guardian revealed that earlier this year, Abigail Disney, the great-niece of Walt Disney, publicly criticized the company’s chief executive, Bob Iger, for his $65.6m salary, saying it “deepened wealth inequality” and was “insane”.

Statistical Analysis

An analysis of Disney's human resource data from April 2015 through December 2022 conducted by David Neumark, a University of California Irvine professor and labor economist and gender pay gap expert, determined that female Disney employees were paid roughly 2% less than male counterparts. Neumark asked in his analysis if women at Disney receive lower annual salaries than similarly-situated men; If there was a difference, was it statistically significant; and do other potentially non-discriminatory factors fully account for the female pay penalty?  

Commenting on Neumark’s report that Disney paid women 2% less than their male counterparts, the women said, “This finding is statistically significant — there is less than a one in one billion chance such results would be found in the absence of gender differences,” and noted that the disparity can be attributed to Disney considering prior salary in setting pay for new hires and putting the responsibility for setting starting pay with a small group of people.

In his report, Neumark found that the gender difference in starting pay from 2015 to 2017 was 4.36%, but after Disney stopped using the prior salary policy, starting pay disparities dropped to 1.3%.

According to Forbes, through October 2017, Disney’s compensation policies permitted a new hire’s prior pay to be considered in setting their starting pay at the company. But employers’ inquiring about previous work’s pay is at issue because women have historically been paid less than men and using salary history to determine compensation perpetuates the pay discrepancy problem. For instance, if a woman is underpaid in a previous job she could be forced to accept a lower wage, which will be difficult to catch up and achieve equal pay.

California Equal Pay Act

Effective January 1, 2018, the California Equal Pay Act has prohibited an employer from paying its employees less than employees of the opposite sex for equal work. And it prohibits employers, with one exception, from seeking applicants' salary history information and requiring employers to supply pay scales upon the request of an applicant.

However, Disney continued to collect current or prior salary information if it was provided by the candidate voluntarily and it would be shared with their compensation department. According to the complaint, “Disney also encouraged recruiters to ask about a candidate’s compensation expectations, as well as any compensation that would be ‘left on the table’ if they were to leave their current employer.” Disney allegedly used salary expectations in calculating offers to new hires until last year. According to Forbes, asking about salary expectations can hinder women because there’s evidence women ask for less pay than their male counterparts. To be equitable, wages need to be set according to objective criteria and not based on previous salary or job candidates’ ideas about what they should be paid.

The Disney class action lawsuit is LaRonda Rasmussen, et al. v. The Walt Disney Co. et al., Case No. 19STCV10974, in the Superior Court of the State of California, Los Angeles County.