Disney Free to Weigh ‘Don’t Say Gay’ Views, Delaware Judge Says

Disney had every right to listen to employees, customers and others who weren’t investors before opposing a Florida law limiting classroom discussion of sexual orientation, Delaware Vice Chancellor Lori W. Will said Thursday.

Will’s remarks at a Northwestern University securities conference came after she backed Walt Disney Co. in June in a shareholder lawsuit over the company’s response to Florida’s “Don’t Say Gay” law— a reply that triggered a feud with Gov. Ron DeSantis (R). Delaware is focused on long-term shareholder value, which may take a hit if Disney loses customers, employees and business partners, she said.

“It’s perfectly within the board’s business judgment to step back and say, ‘Our employees are upset. Our creative partners are upset. This is going to harm us, and so we need to take a stance on this bill,’” Will said.

Will said at the time of her ruling in Simeone v. Walt Disney Co. that she saw no evidence the company or its leaders did anything wrong.

The investor in the case in Delaware’s Chancery Court didn’t formally allege any wrongdoing, but unsuccessfully sought internal Disney documents on the company’s reaction to the “Don’t Say Gay” statute. The lawsuit came amid a battle over the law between DeSantis and Disney, the biggest private employer in the state. DeSantis, who backs the statute, eliminated special tax benefits for Disney, leading the entertainment giant to cancel a planned $1 billion expansion in the state and bring a court challenge.

The shareholder didn’t challenge the decision before an appeal window ended in September.

—With assistance from Mike Leonard.