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Case Study 7.2 Dont Mess With the Mouse: Labor Negotiations at Disney Disney employees were excited to learn that they would be getting a $1,000 bonus after the federal government lowered the tax rate for major corporations. The Disney company announced that it would give a portion of a $1.6 billion tax windfall to 125,000 nonmanagement workers. The excitement was short-lived, however, for the companys union employees. Disney officials threatened to withhold the bonus unless members of the Service Trades Council Union representing housekeepers, kitchen staff, shop clerks, and other low-wage employees ratified the companys latest contract offer. Ninety-three percent of the union membership had previously rejected the contract proposal, which called for a 50-cent an hour raise over two years with a $200 bonus.

Union leaders cried foul, claiming that the company was engaged in extortion, punishing members who had voted against the contract proposal. The union representing employees at Disneyland Resort filed a complaint under the National Labor Relations Act, alleging that Disney was withdrawing the bonus as a threat against workers. For its part, Disney claimed that the bonus should be included as part of any settlement.

Those familiar with Disneys history shouldnt be surprised by the latest labor unrest. In 1941, Disney cartoonists and illustrators went on strike, unionizing and asking for higher wages. Walt and Roy Disney retaliated, threatening workers and firing head animators. Later Walt would use the House Un-American Activities Committee as a platform to condemn the strikers as Communists. In 2008, visitors to Disney parks were greeted by union protestors dressed as Snow White, Tinkerbell, and other Disney figures holding picket signs. In 2017, the company was forced to pay 16,000 Florida employees $3.8 million in back wages for illegally charging them for costumes. Lawsuits by laid off technology employees claim that Disney illegally replaced them with foreign workers.

While labor conflict is nothing new to the home of Mickey Mouse, recent negotiations were particularly tense. Thats because the company took a hard-line stance even as corporate profits and executive salaries soared. Of the companys recent $10.7 billion profit, $2.2 billion came from its theme parks. (Disney raised prices on daily and multiday ticket packages to its properties.) Disney CEO Robert Iger made $43.9 million, chief operating officer Tom Staggs received $15.6 million, and chief financial officer Christine McCarthy took home $10.2 million.

In addition to holding public protests and sponsoring a rally featuring Bernie Sanders, union leaders commissioned a report by researchers at Occidental College. The investigators found that most union employees have been unable to keep up with soaring housing costs in Orange County, California, where Disney is the largest employer. Eighty-five percent earn less than $12 an hour, which puts them below the poverty line for a family of four. Many are homeless, living out of their cars or at the homes of friends and relatives. Three quarters say that they do not earn enough to meet basic expenses. Sixty percent said the food they bought didnt last the month. According to the authors of the report,

The Walt Disney Company promotes Disneyland Resort as the happiest place on earth. But for many of the approximately 30,000 people who work there, it is not the happiest place to work. Despite steep increases in the cost of housing and other necessities, Disneyland workers have suffered steady pay cuts and are struggling to make ends meet.

Spurred by the reports findings, Disney labor leaders in Anaheim placed a living wage initiative on the ballot, which proposed raising the minimum wage to $15 and then $18 an hour for hospitality companies receiving a city tax subsidy. Disney settled with the Disney World and Disneyland unions before the initiative came to a vote. Disney boosted starting wages to $15 an hour at both theme parks and guaranteed future raises over the life of the contract. The living wage ballot measure then passed by a comfortable margin. The head of the Anaheim Chamber of Commerce called the ballot result a tragic outcome that would drive away future hospitality projects, costing jobs. A union spokesperson called his claim laughable.

1. State your awareness of the ethical and unethical issues , what are they ?

2.Are there any different ethical perspectives , what are they ?

3. How could this case have been changed to be ethically correct ?

4. State your position in favor or against the ethical or unethical outcome of the case .