EA settles overtime lawsuit for $14.9 million

[Trippy]

From the San Jose Mercury News:

http://www.mercurynews.com/mld/mercurynews/14426655.htm

EA settles overtime suit
By Nicole C. Wong
Mercury News

Software engineers working at Electronic Arts, the world's largest video-game publisher, Tuesday won $14.9 million in a settlement of a California class-action lawsuit against the Redwood City-based company for unpaid overtime.

Some of the engineers eligible for the settlement money are entry-level software engineers who will be reclassified as hourly workers, making them eligible for overtime pay. They will also receive a one-time grant of restricted company stock. However, they will no longer receive stock options or bonuses.

While the settlement money covers programmers in California, the reclassification applies to entry-level programmers throughout the United States, of which there are fewer than 200.

The settlement, which covers programmers working at EA between Feb. 14, 2001 and Feb. 14, 2006, must be approved by the San Mateo County Superior Court.

As the world's largest employer of game developers, EA's action is likely to spark more workplace reforms in an industry that has earned a reputation for overworking employees.

EA isn't the only video game company that relies on ``crunch time,'' an industry practice of working long hours to finish a project as its deadline nears. Nor is it the only one where employees have revolted by suing over the uncompensated hours. Since the summer of 2004, computer graphic artists and software engineers have filed at least six lawsuits for unpaid overtime against EA, Vivendi Universal Games and Sony Computer Entertainment America.

``In the past two years, we've looked at the old way of managing. Crunch time wasn't working,'' said EA spokeswoman Trudy Muller. ``We took progressive steps to address those issues. Our priority is to fairly compensate people for their work. We're going to continue to do things to make people successful and be an attractive employer and a strong competitor.''

EA, which employs 1,700 workers in the Bay Area and 6,500 worldwide, says it is changing practices. Last year, as part of a settlement of another unpaid-overtime lawsuit, it reclassified 450 U.S. employees -- including 200 entry-level artists -- so they can collect pay for extra hours worked.

And in November, EA's Los Angeles studio tried cutting work hours with a process it called ``Five Great Days,'' which helps game developers to work five days a week -- instead of six or seven -- by setting major deadlines on Fridays instead of Mondays.

EA LA's chief operating officer, Arcadia Kim, credits the program with decreasing turnover. Now EA is implementing the concept throughout the company.

Experts say tweaks like these, while an improvement, are not enough to change the industry's hard-charging culture. And overhauling the process of producing games poses a huge risk to these money-making machines in a $10.5 billion industry built on workers rushing to push the latest video-game hits onto store shelves.

``It's nice to see those baby steps,'' said Jason Della Rocca, executive director of the International Game Developers Association. While the industry has been showing more ``sympathy for the need to change,'' Della Rocca added, ``there's also the sense that our old ways -- no matter how broken -- have got us this far...''

``Who wants to gamble their careers? Who wants to gamble a $15 million budget on trying something new?'' Della Rocca said.

[Trippy]

From the SJ Mercury News blogs: Exclusive: Nicole Wong Reveals Identity Of EA Spouse

[Viin]

That's all? 15mil is pocket change.

How many people were in the lawsuit? 15 / 30 = 500k each?

Maybe one of these days they will actually have a good work environment, but EA is certainly not going to jump on that bandwagon without a lot of shadow puppets first. Good for these guys for bringing it up, it at least gets their attention.

[Trippy]

That's all? 15mil is pocket change.

That is pocket change to them since they have $2.72 billion in cash, however $15 million is still roughly a 5% hit on their earnings per share which isn't insignificant.

[fatboy]

How many people were in the lawsuit? 15 / 30 = 500k each?

Don't forget the lawyer's cut of probably 30 - 40 % .....  OFF THE TOP !!!!!

Then the people get their shares ......

[HaemishM]

$15 million is a fucking travesty. It's bupkiss. Fuckall. It's not even significant enough to put out a press release. It's not even a broken fucking fingernail.

It's not a penalty. These cocksmokers were practically running a fucking sweatshop. They can fart out $15 million. It's a burp.

[Soln]

I wonder the career path at EA for those few litigants :/

[Lt.Dan]

That's all? 15mil is pocket change.

That is pocket change to them since they have $2.72 billion in cash, however $15 million is still roughly a 5% hit on their earnings per share which isn't insignificant.

It's non-recurring so I'd be surprised if it even moved the stock.

[shiznitz]

$15 million is a fucking travesty. It's bupkiss. Fuckall. It's not even significant enough to put out a press release. It's not even a broken fucking fingernail.

It's not a penalty. These cocksmokers were practically running a fucking sweatshop. They can fart out $15 million. It's a burp.

Whoa there. The number of plaintiffs is a big factor in how significant this is. Yes, $15 million is nothing to EA but what did you expect? $200 million in punitive damages?

[HaemishM]

They committed an illegal act, and yes the number of plaintiffs matters a great deal.

But this won't hurt them at all. It isn't punitive, it's a nuisance.

[WayAbvPar]

That should have sentenced all the managers to 100 hours of play TSO. That would be properly punitive.

[HaemishM]

Are you kidding? They probably wouldn't even be able to launch the game. Everyone knows the managers on up at EA don't play games.

[Xanthippe]

From the San Jose Mercury News:

EA, which employs 1,700 workers in the Bay Area and 6,500 worldwide, says it is changing practices. Last year, as part of a settlement of another unpaid-overtime lawsuit, it reclassified 450 U.S. employees -- including 200 entry-level artists -- so they can collect pay for extra hours worked.

And in November, EA's Los Angeles studio tried cutting work hours with a process it called ``Five Great Days,'' which helps game developers to work five days a week -- instead of six or seven -- by setting major deadlines on Fridays instead of Mondays.

EA LA's chief operating officer, Arcadia Kim, credits the program with decreasing turnover. Now EA is implementing the concept throughout the company.

What a concept!  Imagine the possibilities if every business did this!  Improving worker productivity by having a 5 day workweek, and paying overtime.  Revolutionary!  (Well, I guess it was a revolutionary idea in the '30s maybe).

Experts say tweaks like these, while an improvement, are not enough to change the industry's hard-charging culture. And overhauling the process of producing games poses a huge risk to these money-making machines in a $10.5 billion industry built on workers rushing to push the latest video-game hits onto store shelves.

``It's nice to see those baby steps,'' said Jason Della Rocca, executive director of the International Game Developers Association. While the industry has been showing more ``sympathy for the need to change,'' Della Rocca added, ``there's also the sense that our old ways -- no matter how broken -- have got us this far...''

``Who wants to gamble their careers? Who wants to gamble a $15 million budget on trying something new?'' Della Rocca said.

Zzzzzzzzzzzzzzzzzzzzz.  It's way past time that the game industry grew up. 

It's not really so very different from the rest of the software industry, other than the toleration for the immaturity and poor decisions of the executives.