Microsoft to pay $14 million to settle a California discrimination case

Microsoft has agreed to pay over $14 million to settle a case alleging discriminatory practices against some workers in California. The state had accused the Windows maker of discriminating against employers who took protected leave, including parental, disability, pregnancy, and family caretaking leave. The proposed settlement is subject to court approval.

Microsoft to pay over $14 million in a discrimination case settlement

In 2020, the California Civil Rights Department (CRD) launched an investigation into Microsoft over potential violations of state laws, including California’s Fair Employment and Housing Act, the California Family Rights Act, California’s Pregnancy Disability Leave law, Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act.

In its complaint, the department claimed that Microsoft employees who used protected leave “faced unlawful retaliation and discrimination in compensation and promotion opportunities.” The company allegedly offered lower bonuses and unfavorable performance reviews to those employees. This “harmed their eligibility for merit increases, stock awards, and promotions.”

The California CRD said Microsoft adhered to these discriminatory practices for several years. It didn’t take sufficient action to prevent such discrimination, affecting the careers of women, people with disabilities, and other employees. Following a lengthy investigation, Microsoft decided to settle the case out of court. It will pay a monetary relief of $14,425,000 and will take proactive steps to prevent future discrimination.

According to an official press release from the CRD, $14,200,000 of the settlement amount will go against covering direct relief for workers. The remaining $225,000 will cover the department’s costs. Microsoft employees who took a protected leave between May 2017 and the date of the court’s settlement approval may receive compensation. Covered workers will receive further information following the court’s approval.

“Whether it’s to look after a newborn child or take care of your own health, workers generally have the right to take time off without worrying about consequences at work,” said CRD Director Kevin Kish. “By allegedly penalizing employees for taking protected forms of leave, Microsoft failed to support workers when they needed to care for themselves or their families.” He than the firm for agreeing to make the necessary changes.

Microsoft will retain an independent consultant for policy recommendations

As part of this settlement, Microsoft will retain an independent consultant for policy and practice recommendations. The tech biggie must ensure that protected leaves don’t affect annual rewards and promotions of employees. The independent consultant will also help workers raise complaints if they feel discriminated against for using protected leave. Last but not least, Microsoft is required to report annually to the CRD  on compliance with the settlement.