Disney may be in legal hot water again over a scrapped $1 billion development plan that negatively affected the lives of hundreds of employees.
Lawsuit Against Disney
Two Disney employees have filed suit against their employer this week after the company abandoned development plans that required them to move from Los Angeles to Orlando, Florida.
Misrepresented Development Plans
According to the lawsuit filed in Los Angeles County Superior Court on Tuesday, the pair believe that the media giant misrepresented the development plans, which had significant consequences for them and others.
Lake Nona Offices
Back in 2021, Disney announced its plans to build a $1 billion office space and campus in Lake Nona, a housing development in the southeast of Florida.
A Convenient Tax Decision
It was confirmed by Bob Chapek, who was CEO at the time, and Josh D’Amaro, the Chairman of Experiences at Disney. The decision was made on the basis of lower expenses and convenient state tax credits that would be available to the company.
2000 Notified
Disney told 2,000 employees, including park and resort staff, that they would need to relocate to Orlando. The lawsuit asserts that they were offered affordable housing and competitive schooling for their children.
Move or Quit
However, Maria De La Cruz and George Fong, the plaintiffs in the case, claim that they were only given two options by the company: to move to Florida permanently or lose their position at the company.
90 Days to Decide
It was a highly unpopular development amongst affected staff, who were given just 90 days to decide and begin either planning to sell their homes and move or find a new job entirely.
Seeking Security
De La Cruz even contacted the human resources department at her office to seek assurances that security would be provided for those who made the move.
Email to HR
“I don’t want to be punished for being put into a situation my company put me in,” she wrote in an email to the department.
Property Troubles
Under pressure to keep their jobs, De La Cruz and Fong sold their homes in LA and began searching for properties in Lake Nona and surrounding areas, only to find that the local property market had ballooned in value due to Disney’s new development plan.
“Changing Business Conditions”
To make matters worse, Disney reversed the decision just two years after the initial announcement in May 2023, citing “changing business conditions.”
Memo to Staff
“Given the considerable changes that have occurred since the announcement of this project, including new leadership and changing business conditions, we have decided not to move forward with construction of the campus,” the company said in a memo to staff.
Disney vs DeSantis
They scrapped the $1 billion development in Lake Nona after a year of public-facing and legal conflict between the company and Florida Governor Ron DeSantis.
250 Employees Affected
The reversed decision was devastating for the two employees, as well as 250 others who had already made the move. Just two years after being told that they had to leave California, they were now being pressured to return.
Equity Loss for Hundreds
Both plaintiffs now maintain that they incurred significant losses from the move, particularly in terms of property, having to settle for considerably smaller and lower-quality housing. Fong even had to sell the family home he grew up in and inherited.
Bad Time to Sell
“Home prices in the Los Angeles, California area had increased significantly between the summer of 2022 and the summer of 2023,” the lawsuit asserted.
An Impossible Situation
“Mortgage rates had also increased significantly, making it impossible for Plaintiffs and other similarly situated individuals to obtain housing comparable to the homes they had sold,” it continued.
Seeking Damages
Now, the pair are seeking punitive damages, and the lawsuit will represent all employees who agreed to move to Florida for the Lake Nona development.
Families Upended Without Compensation
“Disney upended 250 families for no reason whatsoever, without fully compensating these individuals for the significant losses relating to the unnecessary move,” said Jason Lohr, the attorney on the case.
“A Mistake on Disney’s Part”
So far, Disney has not commented on the lawsuit, and the company has employed neither De La Cruz nor Fong. One senior leader at Disney did apologize for the ramifications of the Lake Nona development last month, calling it “a mistake on Disney’s part.”
Featured Image Credit: Pexels / juan mendez.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
