Disney lawsuit: Employees sue over failed Lake Nona campus, being force to move to Florida

Fong had moved across the country—leaving the state where his family had lived for generations—for work reasons. In a lawsuit filed to the Superior Court of California, Fong said in July 2021 The Walt Disney Corporation informed him and around 250 other employees their roles—as part of the Disney park, experiences and products team—were being relocated to the new Lake Nona campus in Florida.

However, less than six months after selling the home he had inherited, Fong claims he and his peers were told the Lake Nona project had been cancelled and they would have to move back to California if they wanted to keep their roles.

That left Fong with a seemingly unsellable home: He listed it and then pulled it from the market after a month due to no offers, before ultimately selling it around three months later.

The story is similar for Maria De La Cruz, who works for Disney as vice president of product design. In May 2022, De La Cruz sold her home in Altadena, California, and relocated with her family to Florida. She is also now also in the process of moving back west to work in the company’s Glendale offices.

The pair have launched the suit—and hope other plaintiffs will join them—seeking unspecified damages from their employer. The allegations against Disney include intentional misrepresentation, concealment, negligent misrepresentation, and solicitation of employee by misrepresentation.

Disney did not immediately respond to Fortune’s request for comment.

Disney’s Lake Nona saga was the result of an amalgamation of issues. The $1 billion project was announced by former CEO Bob Chapek and—per the suit—would be packed with “collaborative workspaces, large group gathering spaces, extensive amenities and efficient transport options.”

On top of that, according to the suit seen by Fortune, Disney advertised Orlando’s affordable housing market, good schools, and lifestyle amenities.

However, in 2022, Chapek left the $185 billion company and stalwart Bob Iger returned to the corner office. Iger inherited a row with Ron DeSantis, which led to the takeover of the theme park resort’s government by the Florida governor. And on top of the fierce battle with the politician was, of course, the COVID-19 pandemic.

So, in May 2023, Disney announced it had scrapped the plan. Per Reuters, Disney parks chief Josh D’Amaro told 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.

“This was not an easy decision to make, but I believe it is the right one.”

Less desirable homes

The consequences of the decision, Fong and De La Cruz say, is not only upheaval, but also the fact that the homes they have now bought back in California are of a worse quality.

According to the suit, Fong purchased a property in April with “significantly less square footage than his previous Los Angeles home,” adding: “Apart from Mr. Fong, other similarly situated individuals have been forced to purchase or rent less desirable housing upon their return to California.”

On top of house prices rising in California, mortgage rates had also continued to balloon between the summer of 2022 and a year later. Per the St Louis Fed, at the start of June 2022, the average 30-year fixed mortgage rate in the U.S. was 5.09%. Almost exactly a year later, that figure had risen to 6.79%.

While the damages sought by the plaintiffs—represented by attorneys Jason S. Lohr and Roberto G. Ripamonti of San Francisco-based Lohr Ripamonti & Segarich LLP—is not made clear in the claim, it seems Fong has already been disappointed by the offers Disney has made thus far.

The lawsuit adds Fong met with managers at Disney to discuss his relocation and the damages he would incur as a result (house prices in Lake Nona rose when Disney announced its campus, then dropped significantly when they announced its cancellation), but was “extremely disappointed” with the offer made. Despite his outrage, the suit adds, Fong and De La Cruz both returned to California because they “recognized that [their] job security and ability to perform [their] role were dependent upon [their] return.”

Lohr and Ripamonti did not immediately respond to Fortune’s request for comment.