Microsoft has agreed to a substantial $14.4 million settlement following accusations of discrimination and retaliation against employees based on their use of protected leave, including parental and disability leave.

The California Civil Rights Department announced this settlement, which stemmed from an investigation into allegations of Microsoft's discrimination in compensation related to the use of protected leave. Under state and federal laws, employers are prohibited from interfering with a worker's use of protected forms of leave.

Microsoft Agrees to $14.4 Settlement Over Allegations of Discrimination

The proposed settlement, subject to court approval in Santa Clara County, California, where Microsoft maintains a major office presence, addresses a range of discriminatory practices alleged by the state agency. 

These practices reportedly included lower bonuses and unfavorable performance reviews for employees who took leave related to pregnancy, disability, bonding with a new child, or caring for family members in need.

According to the Civil Rights Department, its investigation, which began in 2020, highlighted disparities affecting employees who exercised their rights under California's Fair Employment and Housing Act, the California Family Rights Act, and other federal laws protecting disability and parental leave. 

The department's findings suggest that those using protected leave were disproportionately subject to adverse employment consequences, affecting their financial incentives and opportunities for career advancement.

Kevin Kish, Director of the California Civil Rights Department, emphasized the significance of this settlement in protecting employees' rights to take leave without fear of workplace repercussions.

He noted that Microsoft's alleged actions undermined the support employees needed during critical personal and family-related periods, potentially altering their career trajectories.

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Microsoft Commits to Several Corrective Measures

Under the settlement terms, Microsoft has committed to several corrective measures to prevent future discrimination and foster a more equitable workplace environment.

These measures include financial compensation totaling $14.2 million for affected employees and an additional $225,000 to cover enforcement costs incurred by the department during its investigation.

Moreover, Microsoft will engage an independent consultant to evaluate and recommend improvements to the company's personnel policies. The focus will be on ensuring that the use of protected leave does not negatively impact employees' eligibility for annual rewards, stock awards, or promotions.

Additionally, the company will provide mandatory training for managers and human resources personnel on preventing discrimination based on employees' use of protected leave.

The settlement agreement also mandates that Microsoft submit annual compliance reports through the independent consultant detailing the company's adherence to the terms outlined in the settlement.

This transparency measure aims to ensure ongoing accountability in handling discrimination complaints related to protected leave within the organization. Employees who took protected leave at Microsoft's California locations between May 2017 and the court's approval of the settlement agreement may be eligible for compensation. 

Microsoft told AP that the agency's allegations from the agency are inaccurate. However, the company remains committed to listening, learning, and supporting its employees. 

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