Disney to Pay $43.25M to Settle Equal Pay Fight in California

A California judge has approved a $43.25 million settlement resolving a class-action lawsuit that alleged The Walt Disney Company violated equal pay principles by paying male employees more than female employees for similar work.  

The settlement ends a six-year legal battle and covers non-union California employees below the vice president level employed by Disney between April 1, 2015, and December 28, 2024.

Case Background: Women Say They Were Denied Equal Pay

In 2019, several female employees filed a class action lawsuit against Disney, claiming the company routinely underpaid women, denied promotions, assigned extra work without additional compensation and failed to provide sufficient support staff to help women succeed at work.

The suit claimed Disney violated California’s Fair Employment & Housing Act by using pay practices that had a disparate impact on women, and California’s Equal Pay Act by paying women less than men for similar work. 

Among other things, the women said Disney:

• Routinely refused to promote women, despite documentation from positive performance reviews showing they worked above their pay grade for years, and
• Maintained a strict policy of pay secrecy in violation of state law, instructing them to keep pay increases confidential and ordering them not to discuss compensation.

Key Settlement Details

Under the settlement agreement, Disney will pay $43.25 million and take the following measures to prevent future inequities and promote equal pay:

• Retain an outside industrial consultant to provide training on best practices for benchmarking jobs to external market data and organizing jobs within the company, and
• Retain an outside labor economist to perform a pay equity analysis of all full-time, non-union, California employees below the level of vice president and take appropriate steps to address any significant pay differences flagged in the analysis.

Christine Webber, lead counsel for the plaintiffs, stated, “This settlement would not be possible without these courageous women. Because of them, women can expect equitable treatment at Disney in the future.”

HR Takeaways: Action Steps to Promote Equal Pay

Here’s how HR can take concrete steps to ensure equal pay within their organization.

Eliminate Pay Secrecy Policies

• Establish transparent pay policies that comply with pay transparency laws.
• Clearly communicate pay ranges and promotion criteria to employees.
• Encourage and support employees’ legally protected right to openly discuss compensation.

Build Transparent Pay Structures

• Define pay bands for all levels and make them accessible.
• Align compensation with job responsibilities, performance and market standards.
• Implement structured pay policies to retain talent, foster fairness and reduce disputes.

Document Performance and Promotion Decisions

• Standardize criteria for promotions and raises to ensure consistency.
• Maintain clear records linking performance evaluations to pay and advancement decisions.
• Use documentation to protect against discrimination claims and reinforce trust.

Audit Pay Regularly and Objectively

• Conduct annual pay audits using independent reviews to identify gaps.
• Benchmark jobs against external market data and internal job families.
• Take prompt corrective action to maintain compliance with EPA and FEHA.

Integrate Training and Cultural Change

• Educate leadership and HR on unconscious bias, pay equity and legal requirements.
• Embed equitable practices into the organizational culture to ensure long-term compliance and fairness.
• Promote equal pay awareness across all levels of the organization to reinforce accountability and equitable decision-making.

Moving Forward: Pay Equity as a Strategic Imperative

Pay equity is a critical component of organizational effectiveness and employee trust. Employers that implement transparent pay structures, document decisions, conduct regular audits, and embed equity into their culture reduce legal risk and retain top talent.

HR teams can use the lessons from this case to proactively identify and address pay gaps before they escalate into bigger problems. Taking these steps now helps to ensure compliance with laws like California’s Equal Pay Act and FEHA and creates a foundation for sustainable, equitable growth and a more resilient workforce.