New England Biz Law Update
A Los Angeles judge has given final approval to a class‑action settlement resolving claims that women in middle management roles at Disney were paid less than male peers, passed over for promotions, and assigned extra work without equivalent compensation under California’s Equal Pay Act.
The case was filed in 2019 and involves over 15,000 current and former female employees working in full‑time, non‑union salaried roles below vice president across Disney’s California operations.
In addition to the monetary award of $43.25 million, which compensates for past losses, the settlement includes non‑monetary requirements. Disney agreed to engage an external labor economist to conduct pay equity analyses for certain job classifications over the next three years.
The settlement highlights that even large companies with established pay practices can face substantial liability under state pay equity laws.
Here are some key takeaways for employers:
- Scope and eligibility matter. Organizations should carefully define which classes of employees are exposed to pay equity risk (e.g., non‑union, salaried, below VP level), particularly in states with robust equal pay statutes. It is important to identify possible patterns of disparity, even within department or job‑level silos.
- Regular pay audits and benchmarking are critical. Non‑monetary terms like periodic analyses by external experts are part of many settlements now and may become expected best practices as well.
- Promotion, workload, and title alignment are under scrutiny. Disparities can arise not just in base pay but in who is promoted, who carries added responsibilities without compensation, and how job titles align with duties. Revisit job classifications, performance review processes, and how tasks are assigned to ensure there is no imbalance in who gets extra “uncompensated” work.
Being proactive in reviewing your practices helps can help avoid legal costs later.
