Disney Pays for Vendor’s Unfair Labor Practices
By Michelle Logsdon - December 18, 2001After a five-month investigation by a state agency, Walt Disney Co. has paid more than $900,000 in back wages to approximately 800 employees who worked through a contractor assembling tiaras and wands.
The payment to the California Division of Labor Standards Enforcement allows the Burbank-based entertainment giant to admit no liability in the unfair labor practices scandal.
The probe into the contracting company, KTBA Inc., began in July after workers told an Orange County Register reporter about their work predicament. The women worked from home manufacturing beaded tiaras and wands to be sold in the Disney stores just in time for Halloween.
KTBA Inc. paid 60 cents for each tiara. In order to make the state’s minimum hourly wage of $6.25 the women would have to make 10 tiaras each hour—one tiara every six minutes. “That’s impossible,” worker Martha Gutierrez Castillo told the Orange County Register. “It’s very difficult and poorly paid.”
At the beginning of the investigation Carol Schelin, owner of KTBA Inc., told the Orange County Register she was not taking advantage of her employees. “I love the people I have. The last thing I would want to do is exploit anybody. There are always going to be people who are unhappy; maybe they don’t have the skill.”
Since the investigation, KTBA Inc. has closed its doors. Schelin had worked with Disney for nearly a decade. The state will try to collect the remaining $600,000 in back wages from Schelin and her defunct company.
Besides failing to meet the minimum wage standard, KTBA Inc. was also found to be violating overtime laws and child labor laws. According to the agency’s report, more than a dozen minors between the ages of seven and 15 were used to assemble Disney products.
Disney officials pulled the products off the shelves in July and destroyed any remaining stock. Wands and tiaras seized by the state agency were donated to children’s charities. Sondra Haley, spokeswoman for the Disney store, told the Associated Press, “We feel a responsibility as a good corporate citizen to make the KTBA employees whole.”
Schelin expected to be a scapegoat. In July, when the allegations were first announced, she told reporters, “They [Disney] are going to cut all ties as if they knew nothing, which in reality they did.”
This is not the first time Disney contractors have been accused of violating labor laws. Charles Kernaghan, of the New York-based National Labor Committee investigated Disney contractors in China and Haiti in the past, “Disney tries to project this image of children's dreams but in fact they are one of the worst sweatshop abusers in the world.”
A spokesman for the labor standards agency said workers would receive checks within the next few months. The amount per worker has yet to be determined. | 
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