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Entertainment
8 min read
Areas of Expertise :
Wage And Hour Disputes, Economic Damages, Statistics, Human Resources, Class Action
Published Date:
Last Modified Date:
Jurisdiction:
California State
Grace v. The Walt Disney Company was a California wage-and-hour class action that turned on a focused but important legal question: whether Disney’s long-standing agreements with the City of Anaheim gave it the right to receive a qualifying “City Subsidy” under Anaheim’s Living Wage Ordinance, known as Measure L. If so, Disney was required to pay covered workers the ordinance’s higher minimum wage beginning in 2019.
What made the case notable was not a dispute over timecards or payroll math at the outset. Instead, the litigation centered on how a local wage law applied to a complex public-private financial arrangement. That issue pushed the case beyond an ordinary wage claim and into a broader dispute over statutory interpretation, municipal finance, and employer compliance risk. For lawyers, employers, HR professionals, and policy observers, the case shows how a city ordinance can create major wage liability when it intersects with tax-related agreements and development financing.
Anaheim voters approved Measure L in November 2018. The ordinance became effective in December 2018 and required covered hospitality employers that benefited from a qualifying city subsidy to pay at least $15 per hour starting January 1, 2019. The required wage then increased annually through 2022, with inflation-based adjustments beginning in 2023. This measure created the legal basis for the later dispute involving Disneyland Resort workers. The core question was not whether Measure L existed, but whether Disney fell within its coverage.
On December 6, 2019, Disneyland Resort workers filed a class action in Orange County Superior Court against The Walt Disney Company, Walt Disney Parks and Resorts U.S., Inc., and related entities. The plaintiffs alleged Disney failed to pay the living wage required by Measure L even though, in their view, Disney’s agreements with Anaheim entitled it to a qualifying subsidy. The complaint framed the case around coverage under the ordinance. Workers argued that Disney’s reimbursement arrangement tied to certain local tax revenues brought the company within Measure L’s reach.
Disney moved for summary judgment, arguing that it did not receive a qualifying “City Subsidy” as defined by the ordinance. The trial court agreed and ruled in Disney’s favor. That decision was a major win for the defense at the time. If it had remained in place, it would have ended the central Measure L claim against Disney and sharply limited the workers’ path forward.
The turning point came on July 13, 2023, when California’s Fourth District Court of Appeal reversed the summary judgment ruling. The appellate court held that Disney’s reimbursement agreement gave it the right to receive a rebate or reimbursement tied to transient occupancy taxes, sales taxes, and property taxes in certain circumstances. Based on that agreement, the court concluded Disney received a “City Subsidy” within the meaning of Anaheim’s ordinance.
That ruling revived the workers’ claims and resolved the most important legal issue in the case. After the appeal, the dispute was no longer centered on whether Measure L could apply to Disney at all. The case instead moved into the more typical wage-and-hour class action phase involving damages, classwide payroll analysis, and settlement pressure.
By early 2025, the litigation had shifted from ordinance coverage to administration and damages. Settlement materials later defined the class period as extending from January 1, 2019, through March 25, 2025, reflecting the period used for the approved resolution. This stage of the case shows how an appellate ruling on a single legal issue can transform a case from a threshold coverage fight into a large-scale damages and settlement proceeding.
In September 2025, the court granted final approval to a $233 million class settlement covering more than 51,000 Disneyland employees. The settlement later became final and effective on November 17, 2025. The approved resolution brought the Disney portion of the case to a close. It also confirmed the practical consequences of the appellate ruling: once Disney was found to fall within Measure L, the remaining exposure became large enough to support a major classwide settlement.
Court:
California Court of Appeal, Fourth Appellate District, Division Three
Case Name:
Grace v. The Walt Disney Company
Minimum Wage
Payroll
Labor and Employment
Employment Disputes
Labor Economics
Compensation Plans
Damages Calculations
Economic Analysis
Grace v. The Walt Disney Company was a California wage-and-hour class action that turned on a focused but important legal question: whether Disney’s long-standing agreements with the City of Anaheim gave it the right to receive a qualifying “City Subsidy” under Anaheim’s Living Wage Ordinance, known as Measure L. If so, Disney was required to pay covered workers the ordinance’s higher minimum wage beginning in 2019.
What made the case notable was not a dispute over timecards or payroll math at the outset. Instead, the litigation centered on how a local wage law applied to a complex public-private financial arrangement. That issue pushed the case beyond an ordinary wage claim and into a broader dispute over statutory interpretation, municipal finance, and employer compliance risk. For lawyers, employers, HR professionals, and policy observers, the case shows how a city ordinance can create major wage liability when it intersects with tax-related agreements and development financing.
Anaheim voters approved Measure L in November 2018. The ordinance became effective in December 2018 and required covered hospitality employers that benefited from a qualifying city subsidy to pay at least $15 per hour starting January 1, 2019. The required wage then increased annually through 2022, with inflation-based adjustments beginning in 2023. This measure created the legal basis for the later dispute involving Disneyland Resort workers. The core question was not whether Measure L existed, but whether Disney fell within its coverage.
On December 6, 2019, Disneyland Resort workers filed a class action in Orange County Superior Court against The Walt Disney Company, Walt Disney Parks and Resorts U.S., Inc., and related entities. The plaintiffs alleged Disney failed to pay the living wage required by Measure L even though, in their view, Disney’s agreements with Anaheim entitled it to a qualifying subsidy. The complaint framed the case around coverage under the ordinance. Workers argued that Disney’s reimbursement arrangement tied to certain local tax revenues brought the company within Measure L’s reach.
Disney moved for summary judgment, arguing that it did not receive a qualifying “City Subsidy” as defined by the ordinance. The trial court agreed and ruled in Disney’s favor. That decision was a major win for the defense at the time. If it had remained in place, it would have ended the central Measure L claim against Disney and sharply limited the workers’ path forward.
The turning point came on July 13, 2023, when California’s Fourth District Court of Appeal reversed the summary judgment ruling. The appellate court held that Disney’s reimbursement agreement gave it the right to receive a rebate or reimbursement tied to transient occupancy taxes, sales taxes, and property taxes in certain circumstances. Based on that agreement, the court concluded Disney received a “City Subsidy” within the meaning of Anaheim’s ordinance.
That ruling revived the workers’ claims and resolved the most important legal issue in the case. After the appeal, the dispute was no longer centered on whether Measure L could apply to Disney at all. The case instead moved into the more typical wage-and-hour class action phase involving damages, classwide payroll analysis, and settlement pressure.
By early 2025, the litigation had shifted from ordinance coverage to administration and damages. Settlement materials later defined the class period as extending from January 1, 2019, through March 25, 2025, reflecting the period used for the approved resolution. This stage of the case shows how an appellate ruling on a single legal issue can transform a case from a threshold coverage fight into a large-scale damages and settlement proceeding.
In September 2025, the court granted final approval to a $233 million class settlement covering more than 51,000 Disneyland employees. The settlement later became final and effective on November 17, 2025. The approved resolution brought the Disney portion of the case to a close. It also confirmed the practical consequences of the appellate ruling: once Disney was found to fall within Measure L, the remaining exposure became large enough to support a major classwide settlement.
These experts are commonly used to evaluate whether an employer’s pay practices complied with a wage ordinance or related labor requirements. In a case like Grace, their work would likely focus on hourly rates, payroll practices, service-charge treatment, and whether compensation systems matched local law.
Because Grace turned on the meaning of a city subsidy, municipal finance expertise would be especially relevant. Experts in this area may analyze reimbursement agreements, public financing structures, tax-revenue arrangements, and the financial mechanics of city-backed development deals.
Economic damages experts are often central once liability or coverage has been established. In a wage case, they typically review payroll records, model underpayment amounts, estimate aggregate class exposure, and help quantify settlement value.
Class actions often depend on whether claims and damages can be evaluated using common proof across a large group of employees. Statistical experts may assess payroll data, class membership, common impact, and whether damages can be measured through classwide methods.
HR and payroll systems experts may be asked to examine how wage policies were implemented in practice. Their review can include internal compliance procedures, payroll coding, recordkeeping systems, and the employer’s process for monitoring legal changes.
Grace shows that liability in a wage-and-hour case may rise or fall on a threshold legal question. Here, the central issue was whether Disney’s agreements with Anaheim qualified as a city subsidy under Measure L. Once that issue was decided against Disney on appeal, the case changed dramatically.
The reimbursement agreement at issue was not a payroll document. It was part of a broader financial relationship with the city. Even so, the appellate court’s reading of that arrangement made it the key to wage liability. Employers with public agreements should review those documents with employment-law risk in mind, not only tax or development concerns.
Disney won summary judgment in the trial court, but that victory did not survive appeal. The July 2023 reversal changed the case, strengthened the workers’ position, and appears to have set the stage for the eventual settlement. For litigators, the case is a strong reminder that an appellate loss on statutory interpretation can rapidly alter risk, valuation, and strategy.
After the appeal, the practical issues became more familiar: who was covered, what should have been paid, what records existed, and how damages should be calculated across the class. In large wage cases, that transition from legal theory to payroll analysis often determines the path to settlement.
Employers often focus on California wage law and federal labor standards, but Grace illustrates how local ordinances can create separate and substantial obligations. Compliance reviews should account for city-specific wage requirements, especially where public subsidies, rebates, or reimbursements may be involved.
Grace v. The Walt Disney Company began as a dispute over whether Disneyland workers were entitled to the higher wages required by Anaheim’s Measure L. The answer depended on a narrow legal issue: whether Disney’s reimbursement agreement with the city gave it the right to receive a qualifying subsidy under the ordinance. When the trial court said no, Disney won. When the Court of Appeal said yes in July 2023, the case changed course.
That appellate decision gave the workers’ claims real force and moved the litigation toward a major settlement. By the time the court approved the $233 million resolution in September 2025, the case had become one of the most closely watched local wage disputes in California. Its lasting importance lies in how it connected municipal finance language to labor-law obligations and showed that local wage ordinances can carry serious class action exposure for large employers.
What triggered the Grace v. Disney lawsuit?
The lawsuit followed Anaheim voters’ approval of Measure L in 2018. The ordinance required certain hospitality employers that benefited from a qualifying city subsidy to pay a higher minimum wage starting January 1, 2019. Disneyland workers later alleged that Disney’s agreements with Anaheim triggered that obligation.
Why was the meaning of “City Subsidy” so important in the case?
That term determined whether Measure L applied to Disney at all. The workers argued that Disney’s reimbursement agreement with the city gave it the right to receive tax-related rebates or reimbursements, which qualified as a city subsidy under the ordinance.
What did the California Court of Appeal decide in July 2023?
The Court of Appeal reversed the trial court’s summary judgment ruling and held that Disney’s reimbursement agreement fit the ordinance’s definition of a “City Subsidy.” That meant Disney was subject to Measure L’s wage requirements.
Why did the appellate ruling matter so much?
The appellate decision resolved the main legal dispute in the workers’ favor. After that ruling, the case shifted away from whether the ordinance covered Disney and toward damages, payroll records, and classwide settlement exposure.
How did the Disney portion of the case end?
The claims against Disney ended in a $233 million class settlement that received final court approval in September 2025. The settlement became effective on November 17, 2025.
These experts are commonly used to evaluate whether an employer’s pay practices complied with a wage ordinance or related labor requirements. In a case like Grace, their work would likely focus on hourly rates, payroll practices, service-charge treatment, and whether compensation systems matched local law.
Because Grace turned on the meaning of a city subsidy, municipal finance expertise would be especially relevant. Experts in this area may analyze reimbursement agreements, public financing structures, tax-revenue arrangements, and the financial mechanics of city-backed development deals.
Economic damages experts are often central once liability or coverage has been established. In a wage case, they typically review payroll records, model underpayment amounts, estimate aggregate class exposure, and help quantify settlement value.
Class actions often depend on whether claims and damages can be evaluated using common proof across a large group of employees. Statistical experts may assess payroll data, class membership, common impact, and whether damages can be measured through classwide methods.
HR and payroll systems experts may be asked to examine how wage policies were implemented in practice. Their review can include internal compliance procedures, payroll coding, recordkeeping systems, and the employer’s process for monitoring legal changes.
Grace shows that liability in a wage-and-hour case may rise or fall on a threshold legal question. Here, the central issue was whether Disney’s agreements with Anaheim qualified as a city subsidy under Measure L. Once that issue was decided against Disney on appeal, the case changed dramatically.
The reimbursement agreement at issue was not a payroll document. It was part of a broader financial relationship with the city. Even so, the appellate court’s reading of that arrangement made it the key to wage liability. Employers with public agreements should review those documents with employment-law risk in mind, not only tax or development concerns.
Disney won summary judgment in the trial court, but that victory did not survive appeal. The July 2023 reversal changed the case, strengthened the workers’ position, and appears to have set the stage for the eventual settlement. For litigators, the case is a strong reminder that an appellate loss on statutory interpretation can rapidly alter risk, valuation, and strategy.
After the appeal, the practical issues became more familiar: who was covered, what should have been paid, what records existed, and how damages should be calculated across the class. In large wage cases, that transition from legal theory to payroll analysis often determines the path to settlement.
Employers often focus on California wage law and federal labor standards, but Grace illustrates how local ordinances can create separate and substantial obligations. Compliance reviews should account for city-specific wage requirements, especially where public subsidies, rebates, or reimbursements may be involved.
Grace v. The Walt Disney Company began as a dispute over whether Disneyland workers were entitled to the higher wages required by Anaheim’s Measure L. The answer depended on a narrow legal issue: whether Disney’s reimbursement agreement with the city gave it the right to receive a qualifying subsidy under the ordinance. When the trial court said no, Disney won. When the Court of Appeal said yes in July 2023, the case changed course.
That appellate decision gave the workers’ claims real force and moved the litigation toward a major settlement. By the time the court approved the $233 million resolution in September 2025, the case had become one of the most closely watched local wage disputes in California. Its lasting importance lies in how it connected municipal finance language to labor-law obligations and showed that local wage ordinances can carry serious class action exposure for large employers.
What triggered the Grace v. Disney lawsuit?
The lawsuit followed Anaheim voters’ approval of Measure L in 2018. The ordinance required certain hospitality employers that benefited from a qualifying city subsidy to pay a higher minimum wage starting January 1, 2019. Disneyland workers later alleged that Disney’s agreements with Anaheim triggered that obligation.
Why was the meaning of “City Subsidy” so important in the case?
That term determined whether Measure L applied to Disney at all. The workers argued that Disney’s reimbursement agreement with the city gave it the right to receive tax-related rebates or reimbursements, which qualified as a city subsidy under the ordinance.
What did the California Court of Appeal decide in July 2023?
The Court of Appeal reversed the trial court’s summary judgment ruling and held that Disney’s reimbursement agreement fit the ordinance’s definition of a “City Subsidy.” That meant Disney was subject to Measure L’s wage requirements.
Why did the appellate ruling matter so much?
The appellate decision resolved the main legal dispute in the workers’ favor. After that ruling, the case shifted away from whether the ordinance covered Disney and toward damages, payroll records, and classwide settlement exposure.
How did the Disney portion of the case end?
The claims against Disney ended in a $233 million class settlement that received final court approval in September 2025. The settlement became effective on November 17, 2025.
Minimum Wage
Payroll
Labor and Employment
Employment Disputes
Labor Economics
Compensation Plans
Damages Calculations
Economic Analysis
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