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Claim against Disney for unequal pay

In early April, two female employees filed a lawsuit in California Superior Court in Los Angeles County against The Walt Disney Company, Walt Disney Pictures, and Hollywood Records Inc (collectively "Disney.") The allegations of the lawsuit are that Disney pays them, and other female employees, less than their male colleagues for the same or substantially similar work. They accuse Disney of violating the California Equal Pay Act as well as the unfair competition prohibition of the state Business and Professions Code.

The plaintiffs are asking the court to certify the suit as a class action to resolve similar claims of other women working for the same business unit within Disney.

Disney denies the allegations.

The nature of the allegations

The plaintiffs, who both have several years of work history at Disney, allege generally that the company "routinely underpays" female workers as well as taking many other employment actions that impact male and female employees unequally.

They describe in their complaint a centralized management system that imposes company-wide policies and practices, which the plaintiffs say results in the unequal pay system. One of these has been the practice of basing starting women's salary levels on historical salary levels that may have been unequal, perpetuating the "historic pay disparity between men and women."

The complaint asserts that Disney must create a "meaningful system of accountability" to monitor decisions that may result in unequal treatment. Plaintiffs allege further that the employer's practices result not only in pay disparity, but also in unequal promotion and other employment actions and that treating men and women differently in these ways is "not valid, job-related, or justified by business necessity."

Requested legal remedies

The suit asks for lost benefits and wages, liquidated damages and interest as well as legal fees and costs, and more. The California Equal Pay Act allows a successful plaintiff to get liquidated damages in the same amount as that awarded for lost wages (the difference between what the female plaintiff received, and a comparable male employee received).

It also asks the court for declaratory and injunctive relief as follows:

  • Find Disney's employment policies, practices, and/or procedures illegal;
  • Order that Disney no longer engage in pay discrimination on the basis of gender;
  • Order Disney to provide equal treatment and opportunity for female workers, and remedy the effects of historical practices;
  • Order Disney to create systems of assigning, training, compensating, and promoting female employees in a nondiscriminatory manner;
  • Order Disney to create a task force to oversee and monitor the actions ordered by the court and equal opportunity generally; and
  • Order Disney to correct female employees' salary levels to equal that of comparable male employees

Takeaways

This suit reminds California employers about the significant demands of state and federal equal pay laws. It is smart to consult with an experienced attorney as early as possible to receive guidance about how to audit your current pay structure and set up internal systems and processes that will assist the employer in complying with complex requirements.

The California Equal Pay Act, for example, requires an employer to pay employees of different genders or races at equal rates for "substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.An employer can support the difference in pay for substantially similar work due to:

  • Seniority system
  • Merit system
  • System that pays based on production quantity or quality
  • "Bona fide factor" other than gender or race like "education, training, or experience" and "consistent with a business necessity"

In addition, an employee must show that it applies the above factors reasonably and that the factors account for the entire difference in wages. Under the Equal Pay Act, as amended effective January 1, 2019, an employer may not justify any pay difference between employees of the opposite sex, or employees of different race or ethnicity based on an employees' prior salary. Violations of the Equal Pay Act can result in enforcement action or a lawsuit by the state, or a suit by an employee. Early advice and training by a knowledgeable lawyer will help to avoid any question of noncompliance.

This case is in the early stages and we will report back in this space news of the outcome. The April 2 complaint is available on Westlaw at 2019 WL 1472596.

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