Microsoft to Pay $14M in Settlement for Discriminating Against Leave-Taking Employees

Microsoft Corp. has agreed to a $14.4 million settlement to resolve allegations of retaliation and discrimination against employees who took protected leave, including parental and disability leave, the California Civil Rights Department announced on Wednesday. This settlement follows a multi-year investigation by the California agency and requires approval from a state court in Santa Clara County, where Microsoft has an office.

The investigation, initiated in 2020, revealed that employees who took leave for pregnancy, disability, bonding with a new baby, or caring for a sick family member faced lower bonuses and negative performance reviews. These actions affected their eligibility for merit pay increases and promotions, disproportionately impacting women and people with disabilities.

Settlement Details

As part of the proposed settlement, Microsoft will implement measures to prevent future discrimination, including updated manager training. An external consultant will monitor and report on the company's compliance. Most of the settlement money — $14.2 million — will be allocated to affected workers.

Covered employees are those who worked at Microsoft from May 13, 2017, to a yet-to-be-determined date of court approval for the settlement and took at least one leave protected under state or federal law. Each eligible employee will receive a base payment of $1,500, with additional amounts based on factors such as salary and length of employment.

Impact on Employees

Microsoft employs about 221,000 people worldwide, including nearly 7,000 in California. The state civil rights agency did not provide an estimate of how many workers might receive payment from the settlement. The department highlighted that the practice of penalising employees who took protected leave harmed their career progression.

In response to the allegations, Microsoft stated that it disagrees with the agency's claims but remains committed to listening to and supporting its employees. "We will continue to listen, learn, and support our employees," Microsoft said in its statement.

Agency's Perspective

Kevin Kish, director of the California Civil Rights Department, praised Microsoft's willingness to address the issue and make necessary changes to protect workers in California. "We applaud the company for coming to the table and agreeing to make changes necessary to protect workers," Kish said.

The consent decree resulting from this settlement is subject to approval by a state court in Santa Clara County. The decree includes provisions for monitoring Microsoft's compliance with anti-discrimination measures by an outside consultant.

The investigation found that discriminatory practices at Microsoft affected employee bonuses and performance reviews. These practices had a significant impact on merit pay increases and promotions for those who took protected leave.

The settlement aims to rectify these issues by providing financial compensation to affected employees and implementing measures to prevent future occurrences. The agreement underscores the importance of protecting workers' rights and ensuring fair treatment in the workplace.

This case highlights ongoing efforts by regulatory agencies to hold companies accountable for discriminatory practices. It also emphasises the need for companies to create inclusive work environments that support all employees equally.

The resolution of this case marks a significant step towards ensuring that employees who take protected leave are not unfairly penalised. It also serves as a reminder of the importance of compliance with state and federal laws regarding employee rights.

The settlement agreement between Microsoft and the California Civil Rights Department represents a commitment to improving workplace practices and protecting employee rights. It sets a precedent for other companies to follow in addressing similar issues within their organisations.

This development is part of broader efforts to promote equality and fairness in workplaces across various industries. It reinforces the need for continuous monitoring and improvement of company policies related to employee leave and discrimination prevention.

By agreeing to this settlement, Microsoft acknowledges the importance of addressing these issues and taking steps towards creating a more inclusive work environment for all its employees.