Infinity Ward staff sues Activision for $500 million

A group of 38 present and former Infinity Ward employees has filed a class0action suit against Activision, claiming between $75 million-$150 million in unpaid bonuses, and asking for as much as half a billion dollars in damages.

<a href='http://meincmagazine.com/gaming/news/2010/04/infinity-ward-staff-sues-activision-for-500-million.ars'>Read the whole story</a>

 

[willatazl]

Wow, I guess all the people giving up their bonuses didn't really matter after all.

 

[merc70]

I really hope the rest of staff leaves IW and doesn't stay for the bonuses.

 

[Jack_o]

$500 million ! WoW After its all over and the lawyers take their cut the employees will probably get about $10.00

"Activision spokesman Dan Amrich said that employees who leave the studio would be giving up their bonus, and that "the more people that leave, the bigger the bonus gets for the people who stay." In light of allegations that the money was being held as a kind of ransom to get employees to stay, those statements look rather damning."

Holding bonuses for ransom is basically financial terrorism. What a crappy thing to do, personally, I hope they rot in hell for doing that. So much for buying their products, never again. Integrity consists of many things, one of which is fairness and honesty towards others. If they would not be fair or honest with their own employees what makes us think they would be fair and honest with their customers?

 

[Biggiesized]

Holy shit! Those punitive damages are in RIAA territory right there.

 

[RaveBomb]

Er guys? "class0action" appears in the front page summary....

 

[TOGSolid]

Holy crap, this story just keeps getting better and better. Go go Infinity Ward, I hope they take Activision for every penny they can get.

 

[MatthiasF]

Two to three million bucks for each person in royalties? I'm in the wrong industry.

 

[Ben Kuchera]

Two to three million bucks for each person in royalties? I'm in the wrong industry.

When people say that Modern Warfare 2 is a hit, they don't realize how much of an understatement it is. A few hundred thousand copies of a game is a hit. Modern Warfare 2 sold millions upon millions in its first week. People have spent over a billion dollars on the game.

The royalties being asked for in this case are completely reasonable.

 

[Game_Ender]

Two to three million bucks for each person in royalties? I'm in the wrong industry.

Pretty much no game developer makes a billion dollar game. Also, most of these people are the department heads and leads, so they get a bigger chunk then some of the rank and file. They probably are also in much better financial shape, so can slog it out with Activision in court over the bonuses.

 

[TheHolyLancer]

but the people now leaving are the rank and file, where some of them hold titles like programmer or HR, and not like LEAD programmer or HR head or something.

Surly something else is amiss for these people if they too leave.

 

[Pasta Man]

LOL...I really can't believe the management and legal dept of Activision are really this stupid. Do they think they can deny people bonuses they have are obligated to play, and then use it to bully existing employees?

I could see this going higher than $500 million the longer this drags on.

 

[kevlar51]

Obviously you typically don't get what you don't ask for, but I'd be rather shocked to see punative damages awarded here. It's a contract law case, and those typically deal with actual damages until you start treading into tort territory, which I'm not seeing here.

They're trying to argue tort with "against their will," but I'd like to see actual evidence of employees being held "against their will," and promise of future dollars doesn't cut it.

All that being said, I hope the employees get every dollar of bonuses that they've earned.

 

[Jason Honingford]

What do these developers do to get millions of dollars? Hey I'll submit my resume to Activision -- sounds like they have some more openings. I'm fine without that extra few million in bonuses. ;-)

 

[zimdba]

Clearly I haven't read the contract, but I would guess that IW is responsible for paying the bonuses to the employees, not Activision. Thus, Activision would only have to pay IW. I find it odd that Activision would have a direct relationship with the employees of IW.

Is IW is claiming they're broke and cannot pay bonuses until they're paid by Activision?

 

[QuadDamaged]

My clients [are] entitled to their money. Activision has no right to withhold their money—our money

Emphasis mine-MINE!!!

 

[Lbaxter]

With the refinements to their golden goose killing skills, I think Activision is ready to take on the big fish.

*Pops another bag of popcorn*

 

[searaydriver]

I could see this going higher than $500 million the longer this drags on.

Isn't the normal practice to shoot high and settle low(er)? I would think the 500 million is to get their attention. They may settle for some lower, undisclosed amount.

Big rich guys fighting over money. A big meh from me.

 

[benjwah]

Activision retains the discretion to determine the amount and the schedule of bonus payments for MW2

Does that sound to anyone else like "We got ya bonus right here" *grabs crotch*

 

[gwguy]

Activision has certainly become a textbook example of what not to do with elite staff... Guess we'll see what effect this has on MW3.

 

[jinjuku]

Obviously you typically don't get what you don't ask for, but I'd be rather shocked to see punative damages awarded here. It's a contract law case, and those typically deal with actual damages until you start treading into tort territory, which I'm not seeing here.

They're trying to argue tort with "against their will," but I'd like to see actual evidence of employees being held "against their will," and promise of future dollars doesn't cut it.

All that being said, I hope the employees get every dollar of bonuses that they've earned.

But money that is contractually obligated may be. We aren't talking about 'Future' $$. We are talking about current $$.

I wouldn't be suprised to see the RICO statute in play here (that would be hilarious).

 

[oldshaghat]

I obviously don't know the specifics of the employment contract but it is certainly common to have bonuses (in the real world, not the financial world where bonus has been used in place of "contractually bound deferred compensation") to have limitations, vesting schedules, and the like. They have been called "Golden Handcuffs" (in contrast to Golden Parachutes) and are *absolutely* about bribing the existing talent pool to stick around. I can only assume that Activision wrote normal sensible contracts with a bevy of lawyers, and therefore the suit will go nowhere in all likelihood.

 

[Ulf]

What do these developers do to get millions of dollars? Hey I'll submit my resume to Activision -- sounds like they have some more openings. I'm fine without that extra few million in bonuses. ;-)

Work from 80 to 100 hours weeks up until the project is completed... even more than 100 hours in a week in couple of months before the due date.

 

[MatthiasF]

The royalties being asked for in this case are completely reasonable.

I don't find them unreasonable, they were promised so there has to be some basis for the numbers.

I was just astonished by the amounts.

Really explains the Infinity Ward politics lately.

 

[Tundro Walker]

Activision was using the bonuses as a hostage negotiation tool, though, so I completely agree with this lawsuit. Look, you bust your ass on something, they say they'll give you a bonus, you should get what's promised to you. It shouldn't get addendumed with "oh, we'll give it to you IF you stay and AFTER this whole fallout passes with other employees." Bullshit. Pay up. Now.

 

[Zeebee]

Clearly I haven't read the contract, but I would guess that IW is responsible for paying the bonuses to the employees, not Activision. Thus, Activision would only have to pay IW. I find it odd that Activision would have a direct relationship with the employees of IW.

Is IW is claiming they're broke and cannot pay bonuses until they're paid by Activision?

Activision owns IW (it's is a division of Activison) and they are the publisher of the game; they see all of the profit.

Depending on the structure of the company, IW employees are either paid by Activision directly or indirectly, but the cash, ultimately, still comes from Activision.

 

[Zeebee]

Activision was using the bonuses as a hostage negotiation tool, though, so I completely agree with this lawsuit. Look, you bust your ass on something, they say they'll give you a bonus, you should get what's promised to you. It shouldn't get addendumed with "oh, we'll give it to you IF you stay and AFTER this whole fallout passes with other employees." Bullshit. Pay up. Now.

It depends on when you are due your bonus. If your bonus comes during your annual (or bi-annual or whatever) review peroid, then you have to stay at least until then to get the bonus (which could also factor-in the insane amounts of over-time that a developer might have to do).

Activision cannot withhold a bonus that is contractually due to the employees (they could given them a shitty bonus, but that's another story). But they can say that if you leave now, before the bonus is due to be accorded to you, you get nothing... that might be the basis of the suit.

 

[Jackattak]

LOL...I really can't believe the management and legal dept of Activision are really this stupid. Do they think they can deny people bonuses they have are obligated to play, and then use it to bully existing employees?

Seriously? I have no trouble believing it. AT ALL.

This is effing brilliant. I love it and I hope Activision crumbles as a result (although I know that won't happen). At the very least, if Kotick gets ousted as a result of this shit, my faith in humanity will be restored.

Burn in hell, Bobby.

 

[Metaluna]

What do these developers do to get millions of dollars? Hey I'll submit my resume to Activision -- sounds like they have some more openings. I'm fine without that extra few million in bonuses. ;-)

Work from 80 to 100 hours weeks up until the project is completed... even more than 100 hours in a week in couple of months before the due date.

I would simply be physically incapable of maintaining that kind of pace for more than a week or two. I'm pretty much spent for the day after about 10-12 hours of actual, productive work that requires concentration, and that's assuming I've had a good night's rest, which I wouldn't if I were working 80+ hours a week, and under constant stress over deadlines. So yeah, I'd say they earned it!

 

[BeowulfSchaeffer]

If the class action goes to trial, expect Activision to settle quickly.

 

[OwenT]

If the class action goes to trial, expect Activision to settle quickly.

I'm not sure... This whole thing is starting to look like a huge game of Litigation Chicken and I can't quite tell who will cave first.

 

[Ardrid]

And the fallout continues. Anywhere from 1/4 to 1/3 of IW has abandoned ship already. I wonder how many other people are planning on leaving. I gotta say, I don't feel sorry for Activision one bit. If you screw over your talent, you deserved to get screwed yourself. I really hope they lose both suits. Imagine the look on Kotick's face if the court determines that West/Zampella/IW own the Modern Warfare brand!

 

[tenoch]

LOL...I really can't believe the management and legal dept of Activision are really this stupid. Do they think they can deny people bonuses they have are obligated to play, and then use it to bully existing employees?

I could see this going higher than $500 million the longer this drags on.

Actually it wouldn't surprise me if Activision truly believes so. More than likely though is that Activision knows they are in the wrong and is gambling that 1) they win in court or 2) settle for a much smaller amount than what the MW franchise is worth. However, they probably expected everyone but West and Zamprano to stay put, keep their heads down and keep on going.

My take is that Activision was probably betting that they would only have to deal with West and Zamprano. Remember that West and Zamprano own the intellectual property rights to MW, Activison obviously wanted the whole pie for itself.

I understand that Kotik wants to run Activision as a business and minimize risks, but the approach or exploiting the franchises and in the process the developers that make it possible is disgusting. Activision has already killed Guitar Hero, CoD is next. Sure the next installment will sell like gangbusters but when it turns out to be a steaming pile don't be surprised if the the customers don't return.

This kind of fallout with not only leads leaving but the rank and file speaks volumes of the kind of crappy treatment IW was getting and probably is going on in the other development studios Activision controls. Maybe this will finally get the attention of Activision's upper management. So far I see nothing that hints at Activision management getting it that treating your superstars like shit is just bad business. If Activision fights this to the end it will cost them a fortune, they'll settle otherwise this could kill the company financially (whether Blizzard bails them out or not).

 

[Jackattak]

Imagine the look on Kotick's face if the court determines that West/Zampella/IW own the Modern Warfare brand!

I'm sure he would simply break into all their homes, sodomize their pets, then BBQ and eat them.

 

[Jackattak]

West and Zamprano

I believe it's Zampella, not Zamprano.

 

[driver01z]

What do these developers do to get millions of dollars? Hey I'll submit my resume to Activision -- sounds like they have some more openings. I'm fine without that extra few million in bonuses. ;-)

Work from 80 to 100 hours weeks up until the project is completed... even more than 100 hours in a week in couple of months before the due date.

Yeah - and perhaps some of this:
viewtopic.php?f=2&t=3760&p=22919#p22919

Again, with all this - is Activision definitely in the wrong (which I am prone to assume), or were the bonuses really at their discretion, with no guarantees? I wish we had more facts. Activision is still on my semi-boycott list though (if I have to buy a game from them I buy it later, and used).

 

[Traddy]

I obviously don't know the specifics of the employment contract but it is certainly common to have bonuses (in the real world, not the financial world where bonus has been used in place of "contractually bound deferred compensation") to have limitations, vesting schedules, and the like. They have been called "Golden Handcuffs" (in contrast to Golden Parachutes) and are *absolutely* about bribing the existing talent pool to stick around. I can only assume that Activision wrote normal sensible contracts with a bevy of lawyers, and therefore the suit will go nowhere in all likelihood.

This sounds totally stupid. This isn't about FUTURE bonuses, it's about bonuses that are past due for properties shipped and for monies made. If they wrote a contract that said "We will pay you bonuses in 2042 for money made in 2009", then you may have a point. But, then nobody would ever stay nor have any reasonable expectation of those bonuses.

They are holding back bonuses that are already due, not ones they promise in the future.

Hopefully the fines are even higher. Better hope I am not on the jury

 

[Ganso]

but the people now leaving are the rank and file, where some of them hold titles like programmer or HR, and not like LEAD programmer or HR head or something.

Surly something else is amiss for these people if they too leave.

Actually, the Lead designers already resigned, they where some of the first actually.

If only more people would show this kind of solidarity for their fellow coworkers instead of bending over every time some corporate fuck wants to screw with the work force.

 

[Lbaxter]

but the people now leaving are the rank and file, where some of them hold titles like programmer or HR, and not like LEAD programmer or HR head or something.

Surly something else is amiss for these people if they too leave.

Actually, the Lead designers already resigned, they where some of the first actually.

If only more people would show this kind of solidarity for their fellow coworkers instead of bending over every time some corporate fuck wants to screw with the work force.

I think he's implying that if the base are leaving in addition to the leads, the situation must be REALLY bad.

 

[Jack_o]

I obviously don't know the specifics of the employment contract but it is certainly common to have bonuses (in the real world, not the financial world where bonus has been used in place of "contractually bound deferred compensation") to have limitations, vesting schedules, and the like. They have been called "Golden Handcuffs" (in contrast to Golden Parachutes) and are *absolutely* about bribing the existing talent pool to stick around. I can only assume that Activision wrote normal sensible contracts with a bevy of lawyers, and therefore the suit will go nowhere in all likelihood.

Yes that is common, but thats based upon what will be, were talking about what already is here. They are due bonuses, they did the work, earned the bonus money already and it hasn't been paid. Its like an employer saying on pay day "Oh, your not going to get paid right now, I'm going to hold your due pay for the work you already did to make sure you come back to work next week."