Since its inception, Disney has done everything possible to create a solid and loyal fanbase. The company has created an empire worth billions, from making some of the most iconic films to developing multiple amusement parks worldwide.
Disney specializes in adding magic to everything it touches, which has earned it the name of the "Happiest Place on Earth."
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However, as happy as Disney might market itself to be, some disagree with the self-assigned title.
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Although no one can deny that Disney is one of the most beloved companies by both adults and children, the company has faced its fair share of lawsuits throughout the years, including a damaging wrongful death lawsuit this year alone.
Disney has landed itself in muddy waters once again, but this time, it's ready to settle a controversial feud that has followed it for five years.
Disney gets accused of gender-based discrimination in the workplace
In 2019, LaRonda Rasmussen, a current product manager at Disney, sued the company under the allegations that female middle managers were paid less than their male counterparts who worked in similar positions for multiple years. The alleged disparity violates two California labor laws that prevent sex discrimination in the workplace.
In June last year, eight women joined in on Rasmussen's claims and filed a motion for class certification against the company.
Six months later, a California judge granted the class certification, acknowledging that one of the claims, which falls under the state's Equal Pay Act and affects around 8,900 Disney female workers, could proceed as a class action lawsuit in court.
According to the lawsuit, Disney has underpaid women by $151 million over eight years since 2015, averaging a 2% wage gap, as calculated under the Fair Employment and Housing Act.
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Since then, around 9,000 other women who work or have previously worked for Disney have joined the lawsuit.
Disney denied all allegations and argued that multiple people across different divisions set the employees' salaries using a variety of factors to determine wages. Therefore, each claim must be analyzed individually.
Disney agrees to pay a hefty settlement to end this multi-year wage gap feud
On Monday, Disney (DIS) filed a settlement agreement with the California state court. The company agreed to pay $43.3 million to prevent a long, controversial trial and avoid unwanted attention that could taint its kid-friendly image.
In addition to the monetary restitution, other demands were made to ensure the company would no longer pay its female employees unfair wages.
Disney agreed to hire an organizational psychologist to properly train the compensation team to benchmark jobs against external data. For the next three years, Disney will also have outside labor economists perform pay-equity analyses for full-time, nonunion California employees below the vice president level.
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However, the settlement is not Disney's admission that the plaintiffs' claims are accurate or valid.
“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,” said a Disney spokesperson to The Street.
Although Disney has signed the settlement agreement, the court must still hold a hearing to decide whether to approve it; no exact date was provided on the documents.
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