When the Trump administration’s business-friendly new tax form bill was signed into law at the end of 2017, The Walt Disney Company was quick to join the chorus of other massive companies – including Walmart, Boeing, AT&T and Comcast – in announcing that they would be sharing some of the resulting wealth of their lowered corporate tax rate with many of their employees in the form of a one time bonus. Unfortunately for some of those employees, that promise may turn out to be too good to be true.
Proposed perks for park employees
The initial announcement made by Disney in January 2018 detailed two substantially beneficial initiatives, totaling a reported $175 million, meant to serve as a reinvestment into their employee base. One of these investments comes in the form of a $50 million employee education program, which would make the option of pursuing either vocational training or qualifying higher education courses more accessible to their hourly employees.
The other $125 million, Disney announced, would be dispensed as one-time bonuses in the amount of $1,000, which would be distributed to any full-time or part-time employees who had been working for the company since before January 1. The bonus was scheduled to be paid in two installments, with the first coming in March and the second in September. Disney, like many other large companies who announced bonuses and other employee benefit programs at the start of 2018, credited the recent tax reform law, which decreased the corporate tax rate from 35 percent down to 21 percent, with their decision to give back to their employees. Disney alone has reportedly gained a significant $1.6 billion financial bump which they have attributed to the new tax rate.
Financial uncertainty for union employees
Though the initial announcement failed to specify the exclusion of any employees aside from those who work for the company on an executive level, around 38,000 Disney workers who are part of a union now find themselves caught in a mouse trap. New contract negotiations with unionized employees, which were begun back in November, prior to the signing of the new tax law and the announcement of employee bonuses was made, are currently at something of a stalemate – and The Walt Disney Company appears to be using the bonuses as leverage in their negotiations with the Service Trades Council Union.
After the company’s offer of two subsequent 50-cent raises, one to begin in the present year and one to go into effect in the following year, as well as a $200 signing bonus in November 2017, which was rejected by the union members, Disney has responded with a threat to withdraw the offer of the additional one-time $1,000 tax cut bonus if unionized employees fail to approve their most recent wage proposal by the deadline of August 31, 2018.
The legality of this tactic has now been officially called into question, with members of the Services Trades Council Union filing a federal unfair labor practices complaint against the company with the National Labor Relations Board. In the meantime, Disney has already approved the bonuses for some employees who do not belong to the union, which could lend some legal weight to the STCU’s claim that union employees are facing a form of discrimination in this matter, but an official response to the complaint is still pending.
This is not the first time that Disney has found themselves accused of questionable employee treatment and because they are a company of considerable size, with a lengthy roster of employees, it’s unlikely it will be the last.