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Disney announced that it has reached an agreement to pay $43.25 million to resolve a lawsuit that accused the prominent entertainment company of compensating female employees less than their male counterparts in equivalent positions.
The proposed settlement is set to be reviewed and potentially approved by a judge in January of the upcoming year.
This pay equity class action, which has been a concern for the company for the last five years, originated from a lawsuit filed in 2019 by LaRonda Rasmussen. She alleged that Disney‘s compensation practices were influenced by gender rather than performance.
Rasmussen reported discovering that six men holding the same job title received significantly higher salaries than she did, including one individual with fewer years of experience who earned 20,000 U.S. dollars more annually than her.
Over the past five years, approximately 9,000 women, both former and current employees, have joined the lawsuit as the company consistently challenged the claims and declined to acknowledge any wrongdoing.
The lawsuit fundamentally asserted that Disney had breached the Fair Employment & Housing Act as well as California’s Equal Pay Act by compensating male employees at a higher rate than their female counterparts for identical roles.
As per documents submitted later on Monday evening in the Los Angeles Superior Court, the company has ultimately consented to settle the lawsuit by issuing a financial payment. This settlement will potentially benefit up to 14,000 eligible female Disney employees who have been with the company from 2015 to the present.
It is important to note that the class action and the associated financial compensation do not extend to women employed at Hulu, ESPN, Pixar, or former Fox properties such as FX or National Geographic.
A spokesperson for Disney stated: “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.”
