Electronic Arts Settles Overtime Suit, Will Reclassify Entry-Level Artists

Electronic Arts, which was hit with a class action suit regarding overtime "crunch" hours late in 2004, has settled the suit with employees at its California studios and agreed to compensate affected employees. The original suit was filed by San Francisco law firm Schubert & Reed filed suit on behalf of the affected workers. Now, in return for a settlement of $15.6 million, the artist class plaintiffs have agreed to drop their claims against the giant game publisher. The settlement will be divided between the plaintiffs after legal fees and other costs have been eliminated, with any unclaimed money going to the Jackie Robinson Foundation for college sponsorships for minority students. The settlement is not yet final, and must be approved by the Superior Court of San Mateo County before the money will change hands. A second lawsuit was filed by a software engineer in early 2005, but this suit has not yet been settled. Additionally, a report from the San Jose Mercury News indicates that, as a direct result of the lawsuit, Redwood City-based company will redesignate its entry-level artists as hourly employees. They will be able to earn overtime pay but will no longer receive stock options or bonuses. Since 2000, California labor law has exempted some professionals in the software industry from overtime regulations. Companies do not have to pay workers overtime if they make more than $41 an hour and engage in advanced work that is creative or intellectual in nature. The original July 2004 lawsuit against EA argued that Electronic Arts' artists are entitled to overtime like image effects workers in the film and theater industries, which are not covered by the exemption for the software industry, and this is the conclusion that the suit has apparently reached.