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Microsoft Agrees to $14.4 Million Settlement Over Allegations of Leave Discrimination

By Rachel Kaufman | Posted on July 5, 2024

Microsoft Agrees to $14.4 Million Settlement Over Allegations of Leave Discrimination - Adobe Stock Images

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Microsoft has agreed to pay $14.4 million to resolve allegations by the California Civil Rights Department (CRD) that the company penalized employees for taking legally protected forms of leave. The settlement follows a multi-year investigation into the tech giant's employment practices.

The CRD accused Microsoft of retaliating against and discriminating against employees who took parental, disability, pregnancy, and family care leaves—forms of leave protected under state and federal laws. The department claimed that these employees faced lower bonuses, unfavorable performance reviews, and reduced eligibility for merit increases, stock awards, and promotions. Such actions, if proven, violate laws designed to protect employees from employer interference when taking protected leave.

The California Civil Rights Department (CRD), formerly known as the Department of Fair Employment and Housing, is the state agency responsible for enforcing California’s civil rights laws, including those related to employment, housing, and public accommodations. The CRD aims to protect individuals from discrimination and ensure fair and equal treatment.

The CRD initiated a multiyear investigation into Microsoft following allegations that the tech giant had retaliated and discriminated against employees who took protected forms of leave, such as parental, disability, pregnancy, and family care leaves. These forms of leave are protected under both state and federal laws, which prohibit employer interference and ensure employees can take necessary leave without facing adverse consequences at work.

The investigation by the CRD revealed that employees who utilized protected leave were allegedly penalized through lower bonuses and unfavorable performance reviews, which subsequently affected their eligibility for merit increases, stock awards, and promotions. Such practices were found to be in violation of the protections guaranteed by California's civil rights laws.

Under the settlement terms, which await court approval, Microsoft will provide monetary relief to affected employees who used protected leave between 2017 and 2024. The settlement includes $14.2 million allocated for direct relief to impacted workers and $225,000 to cover costs associated with the CRD's enforcement efforts.

In addition to the financial compensation, Microsoft has committed to implementing several measures to prevent future discrimination. These steps include retaining an independent consultant to review and make recommendations on the company’s personnel policies and practices. The consultant will also report annually on Microsoft’s compliance with the settlement agreement.

A Microsoft spokesperson stated, "Microsoft is committed to an environment that empowers our employees to take leave when needed and provides the flexibility and support necessary for them to thrive professionally and personally." This statement underscores the company’s dedication to fostering a supportive and inclusive workplace.

Kevin Kish, the director of the CRD, praised the settlement, stating, "The settlement announced today will provide direct relief to impacted workers and safeguard against future discrimination at the company. We applaud Microsoft for coming to the table and agreeing to make the changes necessary to protect workers in California."

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