EA Settles Overtime Lawsuit

Electronic Arts announced it will pay $15.6 million and re-classify some salaried employees as hourly workers to settle a class-action lawsuit brought by workers over overtime pay.

Entry-level computer graphic artists in the U.S. will 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 is waiting approval by the San Mateo County Superior Court, is expected to take five months.

The reclassification changes the landscape of how the $10 billion U.S. videogame typically worked. Previously, employees were fueled to work long hours by an entrepreneurial spirit and stock options. But with stock prices down and a shortage of skilled workers loaming, insiders saw a huge separation between labor and management, which could led to the unionization of the industry.

If EA starts treating its employees better, and they're the largest employer in the industry so goes the rest of the industry,'' said Tom Buscaglia, an employment lawyer with expertise in the videogame industry, to the SAN JOSE MERCURY NEWS. Six months ago, I thought unionization would be inevitable in the industry. I'm not so sure any more.''

This suit is the first overtime case to be settled. Other such suits in the gaming world include artists versus Sony Computer Ent. America, software engineers versus Vivendi Universal Games and another suit pitting EA against its game programmers.

The original settled lawsuit was filed in July 2004 by Jamie Kirschenbaum, a lead animator who no longer works for EA. Under California labor law, decision-making employees whose work requires advanced knowledge or creative talent are exempt from earning overtime pay. However, Krischenbaum's attorneys argued he was an image production employee'' whose job did not require original, creative work. In addition, it was argued that EA as part of the entertainment industry should recognize overtime regulations, which do not apply to effects workers in the film and theater biz.

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