CALIFORNIA— In a case that has garnered significant attention, Microsoft has agreed to pay $14.4 million to settle a discrimination lawsuit filed by the California Department of Civil Rights (CRD).
The lawsuit alleged that Microsoft had given unfavorable performance reviews and lower bonuses to employees who took leaves for pregnancy, disability, or to care for a sick family member.
This settlement covers all employees who worked for Microsoft in California for at least 90 days since May 13, 2017 and took one or more protected leaves.
The CRD’s investigation, which lasted from May 13, 2020, to November 17, 2023, uncovered harmful practices toward employees who utilized protected leaves.
These leaves, essential for workers’ health and well-being, include those for pregnancy, disability, caring for a new baby, or a sick family member. Affected employees were denied merit increases, stock awards, and promotion opportunities.
Both state and federal laws prohibit employers from interfering with protected leaves.
These laws ensure workers can attend to personal or family needs without fear of workplace retaliation.
According to the consent decree reached in this case, several measures have been established to compensate affected employees and ensure future compliance.
Compensation and Agreed Measures
- Employee Payments: Each employee covered by the decree will receive at least $1,500 in compensation.
- External Consultancy: Microsoft must provide an external consultant with written findings on discriminatory acts committed in the last 12 months. The consultant will also update the CRD on the company’s progress annually.
- Training: Microsoft’s HR employees will receive annual training to prevent future discrimination.
- Special Payments: The primary complainant will receive a service payment of $30,000, and up to 15 people will receive $2,500 for participating in the investigation.
- Reserve Fund: A reserve fund of $750,000 will be established to supplement payments to affected employees.
The complaint filed by the CRD emphasizes that Microsoft’s compensation policies negatively impacted employees who took protected leaves, disproportionately affecting women and people with disabilities. According to the investigation, business needs cannot justify these practices.
With approximately 221,000 employees worldwide and nearly 7,000 in California, Microsoft faces improving its internal practices to ensure a fair and equitable work environment.
The resolution of this lawsuit sets a significant precedent in the tech industry, highlighting the need for inclusive and equitable policies. Implementing the agreed measures will benefit Microsoft’s current employees and set a standard for other companies in the sector.
Promoting a work environment that respects and values diversity and individual needs will ultimately contribute to a healthier and more productive corporate culture.
