Microsoft Discrimination Lawsuit Settles for $14.4 million

Santa Clara, CAA discrimination and retaliation lawsuit filed by the California Civil Rights Department (CRD) alleging that Microsoft gave workers lower bonuses and unfavorable performance reviews for taking leave has settled for $14.4 million. The settlement includes those who worked for Microsoft in California for at least 90 days during the settlement period that from May 13, 2017 and the present and took one or more leaves of absence.

The CRD investigated the global software giant from May 13, 2020, to Nov. 17, 2023. The investigation found that employees who took leave from work due to pregnancy or disability, or to bond with a new baby or care for a sick family member were, in turn, harmed in their eligibility for merit increases, stock awards, and promotions.

State and federal laws prohibit employers from interfering with an employee’s use of protected forms of leave, such as leave to bond with a new child, address a serious health condition, or care for a family member.

Consent Decree

According to the consent decree:

• Each employee the decree covers will receive at least $1,500.
• Microsoft's investigations team will provide a third-party consultant with written findings on the company's alleged acts in the past 12 months.
• The third-party consultant will also update the department on an annual basis on Microsoft's progress.
• Microsoft's human resources employees will also undergo annual trainings
• A $30,000 service payment is set aside to the complainant "in recognition of their contribution to CRD's investigation" and up to 15 individuals will receive $2,500 for their "substantial participation" in the investigation.
• A $750,000 will be put on a set-aside fund that the settlement administrator can use to adjunct payments.

The Civil Rights complaint states that Microsoft’s compensation policies and practices disadvantage its workers who take employment leave that is protected under California and federal law, including disability, pregnancy parental, and other family caretaking leave. Because Microsoft workers who use or will use protected leave are disproportionately women and people with disabilities, Microsoft’s challenged policies and practices also have a discriminatory adverse impact based on sex and disability that Microsoft cannot justify based on business necessity.

According to the Associated Press, civil rights department director Kevin Kish applauded Microsoft “for coming to the table and agreeing to make the changes necessary to protect workers in California.” Microsoft’s response is that the CRD’s allegations are inaccurate, but it “will continue to listen, learn, and support our employees.” Part of the settlement includes Microsoft “committed to take a number of proactive steps to prevent future discrimination and provide monetary relief to employees who used company-protected leave in California between 2017 and 2024.” 

The CRD states that Microsoft has about 221,000 employees worldwide, including nearly 7,000 in California. The case is California Civil Rights Department, an agency of the State of California v. Microsoft Corp., case number 24CV442210, Superior Court of the State of California, County of Santa Clara.