An Orange County Superior Court has ruled against 25,000 Disneyland cast members who sued to be paid a Living Wage under the 2018 Measure L passed by Anaheim Voters which said hospitality businesses must pay workers $18 an hour by 2022. The catch is this applies to businesses who get a subsidy from the City of Anaheim and the Judge ruled Disneyland does not.
From SF Gate:
“While we never want to see a dispute like this play out in court, we appreciate the judge’s determination,” Mike Lyster, spokesman for the city of Anaheim, told SFGATE. “It validates what we already knew and have said ― the city of Anaheim does not provide any rebate or subsidy to Disney.”
…
Per the city’s Measure L, voted into law in 2018, any private business in Anaheim receiving city subsidies is required to raise employees’ wages to $18 per hour by 2022, plus subsequent cost-of-living increases.
In his final ruling issued Wednesday, Judge William Claster found that while Disney is receiving a “significant benefit” from the city, the company is not technically receiving a city subsidy.
From Anaheim’s Gabriel San Roman writing for the LA Times/Daily Pilot, this:
Passed by voters in 2018, Measure L requires hospitality businesses within the Anaheim Resort area to pay a tiered minimum wage topping at $18 an hour next year if they have tax rebate subsidy agreements with the city.
On Monday, Orange County Superior Court Judge William D. Claster granted a summary judgement in favor of the Disneyland Resort stating that a Disney expansion agreement passed by the city in 1996 didn’t meet the legal definition of a tax rebate subsidy under the living-wage law.
“The court is confronted with a narrow question: whether any of the agreements identified by the parties gives the Disney Defendants a right to a rebate of their taxes,” read Claster’s tentative Oct. 29 ruling. “Whether the city of Anaheim ‘subsidized’ the Disney Defendants in a colloquial sense is not an issue.”
Before going to trial, Claster ruled that the ’96 agreement, in which the city issued $510 million in bonds for resort-area infrastructure improvements in partnership with Disney’s $1.4-billion investment in Disney’s California Adventure, Downtown Disney and Disney’s Grand Californian Hotel, didn’t constitute the tax refund, abatement or discount needed to trigger the living-wage law.
….
“We disagree with the court’s narrow reading of Measure L and believe Monday’s ruling eviscerates the 2018 vote to adopt a living wage in Anaheim,” he said. “The plaintiffs are considering all their options, including appeal. It’s disappointing that Disney can take hundreds of millions of dollars from the city of Anaheim and yet refuse to pay over 25,000 workers a living wage.”
From Deadline.com:
Disney parks swung to a loss a year ago due to the pandemic, but bounced back to an operating profit of $356 million in Q3 2021. Revenue in the Parks, Experiences and Products division more than quadrupled to $4.3 billion this year.
Judge Claster ruled that while Disney benefited from the agreement with the city, it did not technically receive a tax rebate.
Claster said, “Whether the Disney defendants received a ‘public subsidy’ in a general sense is a different question from whether they received or have a right to receive a city subsidy as defined, i.e., a rebate of taxes (in the form of a refund, abatement, exemption, etc.).”
The judge said the plaintiffs showed how the benefits were used to service bond debt, but “they identify no evidence suggesting that the finance agreement causes the Disney defendants to pay less in taxes (whether by post- payment refund, pre-payment exemption, etc.) than they would owe if no finance agreement were in place.”