Microsoft Reaches $14.4 Million Settlement in California Over Retaliation Claims

Microsoft has agreed to a $14.4 million settlement in California, addressing allegations that the company retaliated against employees for taking legally protected time off. The California Civil Rights Department announced the proposed settlement, which awaits approval by a state judge. Most of the settlement funds will be distributed to California workers who took parental, family care-taking, or disability leave from 2017 to the present and who opt into the settlement.

The department’s complaint asserted that Microsoft’s policies and practices disproportionately affected women and people with disabilities, leading to discriminatory adverse impacts that were not justified by business necessity. It highlighted that managers were not adequately prevented from considering protected leave when evaluating an employee’s “impact,” a factor used to determine bonuses, promotions, stock awards, and merit increases.

Microsoft, headquartered in Redmond, Washington, employs approximately 6,700 people in California. Under CEO Satya Nadella, the company has made strides in diversifying its leadership and addressing harassment and discrimination issues. Women represented 31.2% of Microsoft’s workforce in 2023, up from 27.6% in 2019.

Following a 2022 shareholder vote, Microsoft revised its sexual harassment and gender discrimination policies based on recommendations from an external group. As part of the recent settlement, the company will train managers and HR employees in California to ensure protected leave is not considered in “impact” decisions, with APTMetrics monitoring compliance.