Disney faces lawsuit over canceled employee relocation plan
Disney canceled the Lake Nona project in 2023 and employees who relocated for it allege the compensation was inadequate
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Disney's cancellation of a planned Florida campus that left some California-based employees slated for relocation in the lurch last year has the entertainment giant facing a lawsuit.
Disney announced in 2021 that it would relocate certain California-based employees who support theme parks and resorts to Florida, where they would work at a $1 billion office park development at Lake Nona near Orlando.
The proposed class action lawsuit, filed by creative director George Fong and Vice President of Product Design Maria De La Cruz, claims that after the plan was announced, the roughly 2,000 employees who were asked to move would have "up to 90 days from the day they are informed to consider and make the decision that's best for them."
Fong and De La Cruz, who agreed to relocate, allege that the company fraudulently induced them to move from California to Florida before pulling the plug on the project, while other employees submitted resignations to stay in California and some who declined the move were allowed to stay with the company.
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Disney is facing a lawsuit filed by employees who relocated from California to Florida for a project the company later canceled. (AaronP/Bauer-Griffin/GC Images / Getty Images)
In Fong's case, he made the move after selling his Los Angeles home, which the lawsuit says "was a particularly painful decision because it was the family home he had grown up in and inherited."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DIS | THE WALT DISNEY CO. | 117.16 | -0.31 | -0.26% |
The campus, which was planned by then-CEO Bob Chapek, was canceled in 2023 after Bob Iger returned to replace Chapek and the company was embroiled in a legal battle with Florida Gov. Ron DeSantis over tax breaks the company received and its involvement in hot-button political issues.
That legal dispute has since been resolved and Disney has signaled it will invest in an expansion of its Florida theme parks.
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At the time of the Lake Nona project's cancellation, Disney admitted that some employees had already relocated to Florida to participate in the new project and said it would discuss the situation with individual employees. It gave employees who relocated to Florida until the end of 2023 to decide whether they want to move back to California.
Complicating matters financially for affected employees, home prices declined in the Orlando area around the time of the project's cancellation, while home prices have risen in the Los Angeles area, according to the lawsuit.
Bob Iger's return as Disney CEO amid broader cost-cutting and a feud with Florida Gov. Ron DeSantis prompted the Lake Nona project's cancellation. (Charley Gallay/Getty Images for Disney / Getty Images)
The filing cited a Wall Street Journal report from May 2023 that said Disney's initial investment plans "sparked a wave of new residential and multifamily development" in the area, while the cancellation "could contribute to a glut of homes in the community."
The timing also coincided with relatively higher interest rates on mortgages that have made it less affordable for homebuyers to purchase a home.
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Disney has since resolved its legal dispute with the DeSantis administration and is planning to expand its Florida theme parks. (Brian Carlson/Bloomberg via Getty Images / Getty Images)
According to the suit, Disney executives apologized to the plaintiffs and other impacted workers for the cancellation of the project and the situation they were placed in, saying it was a mistake on the company's part.
The lawsuit claims that the compensation offered by Disney was inadequate and seeks compensatory damages as well as punitive damages against Disney that would deter other companies from putting employees in a similar position.
Disney did not immediately respond to a request for comment.
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According to the lawsuit, Fong has returned to Southern California and purchased a home in South Pasadena that has "considerably less square footage than his previous Los Angeles home," while De La Cruz is in the process of moving back to California.