Disney Must Disclose Information Related to "Secret" Pay Equity Study

Walt Disney Studios Los Angeles April 8 2020 2

Last November, a group of suing Disney employees demanded the opportunity to conduct a statistical analysis of pay data to prove gender disparities that they allege occur throughout the studio's workforce. It turns out that Disney had already hired consultants in 2017 to study the issue. On Friday, a Los Angeles Superior Court judge ruled that as part of the ongoing lawsuit, Disney would have to disclose more information on the communications and documents related to this pay equity study.

According to the judge's decision, the decision to hire the outside consulting firm of Willis Towers Watson was made by Shawna Swanson, an associate general counsel at Disney. The consultant's study then kicked off a discussion among 33 Disney employees, most of whom worked in the Human Resources and Compensation departments.

The plaintiffs in the case — a number of women who say they are paid less than men who perform similar work — have been attempting to compel documents related to the study. In a motion, they asserted that these documents "would tend to show that Disney systematically discriminates against female employees, and that the discrimination is knowing and willful."

Disney responded that it wasn't trying to keep "secret" any information and that the underlying pay data was discoverable, but that the analysis was covered by attorney-client privilege. Disney added that there was no evidence that any of this was disseminated widely or prepared for any purpose other than legal advice. For example, the defendant said the consultants weren't engaged to advise on an internal investigation, PR strategy, business product or day-to-day operations.

In an order, L.A. Superior Court Judge Daniel Buckley appears skeptical of Disney's arguments.

While he hasn't yet decided whether these documents are privileged or not, Buckley does note that Swanson spontaneously requested the study "without any prompting or direction from her 'client,' Disney" and then failed "to provide any legal advice to her corporate 'client.'"

The judge then goes through chapter and verse on when there's no presumption of confidentiality before deeming Disney's privilege logs to be insufficient.

"While Defendants adequately explain that their in-house counsel enlisted the aid of Compensation and HR personnel for purposes of obtaining the data and information necessary for WTW to conduct its analysis (that the in-house attorneys used to provide legal advice), that explanation holds little water with respect to communications that occurred only between non-attorneys after Defendants received WTW’s final deliverable," writes the judge. "Moreover, that the after-the-fact communications occurred only between non-attorney personnel and executives, including sometimes exclusively between individuals that were not privy to initial receipt of the analysis from WTW, further indicates the potential non-privileged business purpose of those communications."

Meaning, even if the 2017 pay equity study itself is off limits to the women suing Disney, there could very well be communications within Disney triggered by the study that could become evidence in the case. What's more, even when Disney's in-house lawyers were on the email chain, if the communications don't include legal opinions, the judge appears to be open to the possibility that these emails could become non-secret too. For now, Disney must at least outline each of the documents being withheld. A further decision on whether these documents are truly privileged figures to come later.

Finally, Buckley also rules that Disney must give up its agreement with the consulting firm. States the judge in his order, "Even assuming a retention agreement between an attorney and client is privileged under California law, it does not follow that an attorney’s (or even a client’s) agreement with an outside consultant or analyst is similarly privileged."