Microsoft agrees to $14m settlement over claims of penalising employees for taking leave

Microsoft Corp has agreed to pay $14 million to settle a California agency's claims that it illegally penalized workers who took medical or family-care leave, the agency said on Wednesday.

The California Civil Rights Department in filings in state court accused the tech giant of retaliating against its California-based employees who used parental, disability, pregnancy, and family-care leave since 2017 by denying them raises, promotions, and stock awards.

Those workers, who were disproportionately women and people with disabilities, received lower performance-review scores that in turn suppressed their pay and opportunities for promotions and altered their career trajectory, the department said.

The settlement, which must be approved by a state judge, would resolve a multiyear investigation by the Civil Rights Department, the agency said. Microsoft denied wrongdoing in the settlement agreement. In a statement, a company spokesperson said it disagreed with the agency's allegations.

“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," the spokesperson said.

The state's Civil Rights Department has announced a series of large settlements in recent years, mainly in sex discrimination cases. Those include a $100 million deal with videogame maker Riot Games in 2021, a $54 million settlement with Activision Blizzard last year, and, last month, a $15 million settlement with Snapchat parent Snap.

The agency accused Microsoft of sex and disability discrimination and interfering with workers' rights to take leave. It was not clear how many workers could benefit from the settlement. Redmond, Washington-based Microsoft has about 6,700 employees in California, according to court filings.

Kevin Kish, the director of the Civil Rights Department, said in a statement that Microsoft failed to support workers when they needed time to care for themselves and their families. "The settlement announced today will provide direct relief to impacted workers and safeguard against future discrimination at the company," Kish said.

Along with the $14.4 million payout, Microsoft has agreed to hire an independent consultant to ensure that company policies do not discriminate against workers who take leave and that employees are able to raise complaints and to provide training to managers and human-resources personnel.