EA settles labor-dispute lawsuit

A San Mateo Superior Court judge is expected to soon approve a negotiated settlement between former Electronic Arts employee Jamie Kirshenbaum (and others) and Electronic Arts. The case, Jamie Kirshenbaum vs. Electronic Arts, Inc., was previously filed in court on July 29, 2004.

In a statement released after trading had concluded in New York today, EA alerted investors to the settlement.

In the complaint, Kirshenbaum alleged that EA had "improperly classified some of its employees, including 'animators,' 'modelers,' 'texture artists,' 'lighters,' 'background effects artists,' and 'environmental artists' as exempt from overtime, and therefore failed to pay those employees overtime compensation."

Kirshenbaum's initial complaint sought to establish a "class" that could press its claims for back pay against Electronic Arts. The settlement today renders the complaint moot in the eyes of the law, but by any standard, Kirshenbaum has come out on top.

The terms of the settlement will see Electronic Arts pay out $15.6 million, to be distributed to all class members and plaintiffs' attorneys. A portion of that $15.6 million will go directly to the named plaintiffs (Kirshenbaum, Mark West, Eric Kearns, and Gianni Aliotti) as well as into a fund to cover all administrative costs. The case will be dismissed as a result.

EA says any portion of the settlement fund that is not claimed by the class will go to the Jackie Robinson Foundation, nonprofit organization that awards college scholarships to minority students.

Today's settlement brings a notorious chapter in EA's labor relations to a legal close--a chapter first brought to light by the blog of the "EA Spouse", which outlined working conditions within EA. Though they preceded the publicity surrounding the Kirshenbaum complaint, the EA Spouse's posts were covered by many outlets, including the New York Times, the Los Angeles Times, and others that dug deep to uncover alleged inequities.

That said, there remains an undercurrent of discontent among some current and former members of the extended EA family. In this month's Wired magazine, a letter to the editor written in response to a recent article about EA's efforts in Hollywood commented on the publisher's treatment of its employees. "The story didn't mention EA's decision to move hundreds of employees to Florida and Canada after being forced to reclassify which positions are eligible for overtime in California," read the letter. "If EA intends to break out of the sports market, it may be forced to cater to artists and designers on the same terms that its managers and marketers already enjoy." The writer claimed to be a former staffer at EA's Los Angeles studio.