The company logo is seen illuminated at the Microsoft booth at Mobile World Congress 2024 in Barcelona on February 26, 2024.
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Microsoft Apple is paying $14.4 million to settle a California lawsuit over allegations that the company retaliated against employees who took legally protected leave.
The California Department of Civil Rights announced the proposed settlement on Wednesday. After a state judge approves it, nearly all of the money will go to California workers who took parental leave, family leave or disability leave from 2017 to the present and who choose to participate in the settlement.
“Because Microsoft workers who use or will use protected leave are disproportionately women and people with disabilities, Microsoft’s controversial policies and practices also have a discriminatory adverse effect on the basis of sex and disability that Microsoft cannot justify on the basis of business necessity,” the state agency said.
According to the complaint, Microsoft is not doing enough to prevent managers from considering protected leave when evaluating an employee's “impact,” a factor involved in calculating annual bonuses, promotions, stock awards and vesting increases.
Microsoft, which is based in Redmond, Washington, employs about 6,700 people in California out of a total workforce of 221,000, according to the complaint.
Under CEO Satya Nadella, Microsoft has sought to diversify its senior ranks, while also becoming more responsive to issues of harassment and discrimination.
The proportion of women at the partner, executive, and director levels has increased over the years. At Microsoft’s core, women made up 31.2% of the workforce in 2023, up from 27.6% in 2019, according to the company’s latest diversity report.
In 2022, after a shareholder vote, Microsoft said it would review its sexual harassment and gender discrimination rules after a report from an outside group found problems with the company's handling of complaints.
Employees reported fearing retaliation after requesting protected leave, according to the complaint filed in California. The proposed settlement says Microsoft refutes the agency’s allegations.
“Microsoft is committed to providing an environment where our employees can take time off when needed and where they have the flexibility and support they need to succeed professionally and personally,” a company spokesperson told CNBC in an email. “While we believe the agency’s allegations are inaccurate, we will continue to listen, learn and support our employees.”
As part of the settlement, Microsoft will provide training to California faculty members’ direct and subordinate managers and human resources staff who handle their bonuses and accrual increases. Managers will also be instructed not to consider protected leave when making “impact” decisions. A consulting firm, APTMetrics, will be responsible for monitoring compliance.
