Last Updated on October 15, 2025 by MyHRConcierge

The Walt Disney Company, one of the world’s largest entertainment conglomerates, recently agreed to a $43.25 million settlement to resolve claims that it systematically paid female employees less than their male counterparts for performing “substantially similar work.” The class-action lawsuit, Rasmussen et al. v. The Walt Disney Company, was originally filed in 2019 and represented nearly 9,000 current and former non-union female employees in California.

While the Walt Disney Company denies any wrongdoing, the settlement marks one of the largest gender pay resolutions in recent years, and underscores the growing legal and reputational risks companies face if they fail to ensure compliance with pay equity laws.

Allegations at the Heart of the Case

The plaintiffs alleged that Disney’s compensation practices perpetuated gender-based pay disparities across multiple divisions. According to the complaint, women at Disney were:

• Hired at lower starting salaries than men for similar roles, partly due to reliance on prior pay history;
• Denied equal opportunities for promotions and pay increases; and
• Expected to take on additional responsibilities without commensurate compensation.

These claims collectively painted a picture of a systemic issue rather than isolated incidents- precisely the kind of pattern that California’s equal pay laws are designed to prevent.

California’s Equal Pay Act and FEHA: The Legal Foundation

The lawsuit was based primarily on violations of California’s Equal Pay Act (EPA) and the California Fair Employment and Housing Act (FEHA).

Under the California Equal Pay Act, employers are prohibited from paying employees less than those of the opposite sex for “substantially similar work” when viewed as a composite of skill, effort, and responsibility. The law also restricts employers from using prior salary history to justify current pay disparities; a common practice that can inadvertently perpetuate inequity.

FEHA, meanwhile, expands protections by prohibiting discrimination in compensation, promotions and other employment terms based on sex, race and other protected characteristics. Together, these laws form one of the most comprehensive pay equity frameworks in the country.

Terms of the $43.25 Million Settlement

The settlement covers non-union, salaried women employed in California (below the vice president level) between April 1, 2015, and December 28, 2024. While individual payments will vary based on tenure and position, the broader impact of the case lies in its structural commitments.

Disney agreed to:

• Engage an independent labor economist for three years to conduct pay equity analyses.
• Hire an external consultant to review job classification, compensation benchmarking, and pay-setting processes; and
• Implement corrective actions if significant disparities are identified.

These measures go beyond financial restitution… they represent an organizational shift toward proactive pay equity oversight.

Pay Equity Under Federal Law: A Broader Framework

While California leads the nation with some of the most stringent pay equity requirements, federal law also provides important protections that form the foundation of pay equity compliance across the U.S.

The federal Equal Pay Act of 1963 (EPA), part of the Fair Labor Standards Act (FLSA), requires that men and women in the same workplace receive equal pay for equal work. The law applies to jobs that require equal skill, effort and responsibility, and are performed under similar working conditions. Employers can only justify pay differences based on legitimate factors such as seniority, merit, quantity or quality of production or any factor other than sex.

Additionally, Title VII of the Civil Rights Act of 1964 prohibits broader forms of compensation discrimination, not only on the basis of sex, but also race, color, religion and national origin. While the federal EPA is narrower in scope than California’s state laws, it sets a baseline standard that applies nationwide, —and violations can expose employers to federal investigations and lawsuits from the Equal Employment Opportunity Commission (EEOC).

For multi-state employers, this dual framework underscores the importance of developing uniform, equitable pay practices that comply not only with federal law, but also with the more expansive state statutes in several states.

Moving Forward: A Culture of Equity and Compliance

As more states strengthen pay equity legislation and public scrutiny intensifies, companies can no longer afford a reactive stance. The Disney case highlights the reputational and financial stakes of noncompliance, but it also demonstrates a growing opportunity for organizations to lead with transparency, fairness and accountability.

For more information on how to enhance your organization’s government compliance efforts, contact MyHRConcierge at 855-538-6947 ext.108, ccooley@myhrconcierge.com. Or, schedule a convenient consultation below: