Electronic Arts settles overtime suit

World's biggest video game company set to pay $15.6 million to settle suit filed by current and former graphic artists seeking overtime pay.

Tech Industry
Electronic Arts, the world's biggest video game company, said Wednesday that it will pay $15.6 million to settle a lawsuit filed by current and former graphic artists seeking overtime pay.

The proposed settlement of the class action lawsuit, which was filed in July 2004, must be approved by the California Superior Court in San Mateo County.

The employees charged that EA violated labor laws requiring it to pay overtime and were seeking past-due overtime pay and penalties.

Under the settlement, about 200 entry-level artists will become hourly workers eligible for overtime pay and a one-time grant of restricted EA stock. Those employees would be excluded from bonuses and stock option grants, said Jose Martin, head of human resources for EA's global studios.

Miranda Kolbe, the attorney for the EA artists, did not immediately return calls seeking comment.

A similar lawsuit, filed in February by EA programmers, is still pending.

The lawsuits signify a changing view among some workers at Silicon Valley companies, where employees have traditionally traded long unstructured work hours for the chance to get rich with stock option grants.

Wedbush Morgan Securities analyst Michael Pachter said EA will get productivity gains from the changes and, if it needs to, will control costs by weeding out slower workers.

He said the artists who are reclassified as hourly would likely get more supervision and be assigned work-related quotas, resulting in less job satisfaction.

"Think of it more like a factory worker," he said. "The assembly line just sped up."

Story Copyright © 2005 Reuters Limited. All rights reserved.

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