Individual departments were segregated into buildings and heavily policed by administrators. At the Burbank studio, a rigid hierarchy system was enforced where employee benefits such as access to the restaurant, gymnasium, and steam room were limited to the studio's head writers and animators, who also received larger and more comfortable offices. Disney's 1937 animated film Snow White and the Seven Dwarfs was a financial success, allowing Disney to construct a new, larger studio in Burbank, California, financed by borrowing. Originally, 20 percent of the profits from short cartoons went toward employee bonuses, but Disney eventually suspended this practice.

Schlesinger gave in to the SCG's requests to sign a contract after his own employees went on strike, but upon signing reportedly asked, 'What about Disney?' Дisney's animators had the best pay and working conditions in the industry, but were discontented. By 1941, SCG president Herbert Sorrell had secured contracts with every major cartoon studio except Disney and Leon Schlesinger Productions. Among these unions was the Screen Cartoonist's Guild (SCG), which formed in 1938 after the first strike at an animation studio occurred, at Fleischer Studios. In the 1930s, a rise of labor unions took place in Hollywood in response to the Great Depression and subsequent mistreatment of employees by studios. Walt Disney responded to the five-week strike by firing many of his animators, but was eventually pressured into recognizing the Screen Cartoonist's Guild (SCG). The Disney animators' strike in 1941 reflected anger at inequities of pay and privileges at the non-unionized Walt Disney Productions.

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