Electronic Arts said Wednesday it will pay $15.6 million and re-classify some salaried employees as hourly workers to settle a class-action lawsuit brought by artists against the world's largest video game maker for unpaid overtime.
In the coming weeks, entry-level computer graphic artists in the United States will be able to start earning overtime pay and will receive a one-time ownership grant of restricted company stock. However, they will no longer receive stock options or bonuses. The settlement, which needs to be approved by the San Mateo County Superior Court, is expected to take five months.
The settlement represents a culture shift in Silicon Valley, where workers have taken pride in toiling day and night, fueled by an entrepreneurial spirit -- and stock options. But now, souring stock prices have made some options worthless -- or worth less. So some employees are itching to be paid for all the hours they work, sometimes more than 12 hours a day, even on weekends.
The reclassification is also a step toward redefining how the $10 billion U.S. video game industry operates, as it braces for a shortage of skilled workers and hears rumblings that conditions are ripening for unionization.
This is the first of a recent spate of unpaid overtime lawsuits against video game makers to reach resolution. Artists are suing Sony Computer Entertainment America, and software engineers are suing Vivendi Universal Games. Another EA lawsuit filed by its game programmers has not been settled.
Some employees have publicly complained about unrelenting EA work schedules in news reports and blog postings. But Redwood City-based EA, which employs 6,500 people worldwide, said the internal agitation hasn't hurt its recruiting efforts.
The settlement also allows the company to focus on other important challenges, such as adapting its technology for the new game consoles released every four to five years, Martin said.
The lawsuit was filed in July 2004 by Jamie Kirschenbaum, a lead animator who no longer works for EA and and did not reply to an e-mail seeking comment. One of his attorneys, Miranda Kolbe, who is also representing the EA engineers and Sony artists in their unpaid overtime suits, declined to comment.
Under California labor law, decision-making employees whose work requires advanced knowledge or creative talent are exempt from earning overtime pay.
But Krischenbaum's attorneys argued he was an ``image production employee'' whose job did not require original, creative work. They also argued that EA is part of the entertainment industry and should recognize overtime regulations, which do not apply to image effects workers in the film and theater industries.
Several EA workers didn't return calls for comment. One artist, who requested anonymity to protect his job, said he applauded the settlement, but would like to see the company cap the number of hours employees work. He said he occasionally gets to leave work ``early'' -- at 8 p.m. -- and can't even come close to that when he's preparing for a game release.
He also said the only artistic discretion he and his colleagues have is whether to color a red object darker red. ``It isn't like, `I think I'm going to make this room green,' '' he said.
Marcus Courtney, president of the WashTech union, said the settlement's overtime concession still leaves room for other benefits from unionization, such as better health care and retirement benefits. He said his organization has reached out to EA employees and video game workers elsewhere.
As video game makers grapple with the remaining lawsuits -- particularly the ones concerning programmers -- the debate will continue over whether high-tech workers should be protected by labor laws created decades ago for older industries.
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