Microsoft Agrees to $14.4 Million Settlement for Discriminating Against Workers Who Took Medical Leave

Taking time off work to care for a newborn, recover from a health condition or support an ill family member is often not just a choice but a necessity. These moments in life should be met with understanding and support from employers, especially when various laws protect workers’ rights to take leave from work.

Employees should feel secure knowing that taking protected leave won’t unfairly harm their jobs and professional growth. Yet for years, some workers at Microsoft’s California offices reportedly faced exactly that concern. They had been passed over for bonuses and promotions after taking family care, pregnancy, parental or disability leave.

In a case investigated by the California Civil Rights Department (CRD), Microsoft agreed to pay a $14.4 million settlement to resolve claims of discriminatory practices. The tech giant was accused of discriminating against and retaliating against workers who took protected leave under the California Family Rights Act (CFRA), the Family and Medical Leave Act (FMLA), the Pregnancy Disability Leave law and the Americans with Disabilities Act.

The affected employees took legally protected leave between May 2017 and 2024. The allegations stemmed from a multi-year CRD investigation launched in 2020. According to the state agency, Microsoft employees who took family or medical leave often “received lower bonuses and unfavorable performance reviews,” which affected their opportunities for “merit increases, stock awards and promotions.

The investigation revealed patterns of inequality that left workers questioning whether taking leave to care for themselves or loved ones could jeopardize their professional growth. CRD found that the employees most affected were women and workers with disabilities, groups statistically more likely to take advantage of various types of protected leave. The agency alleged that Microsoft not only allowed these discriminatory practices to occur but failed to take measures to prevent them.

While Microsoft denied the allegations, the company agreed to settle the case and committed to changing its policies and practices. Of the total settlement amount, $14.2 million will compensate affected workers. Eligible employees will receive a base payment of $1,500, with additional compensation determined by factors such as their pay and employment duration during the affected period.

Beyond monetary relief, the settlement includes measures designed to prevent future discrimination. Microsoft is required to work with an independent consultant to review and update its policies to ensure that protected leave is not considered when determining bonuses, pay raises or promotions. Managers and human resources personnel must undergo specific training on anti-discrimination laws, and the company must establish a clear and accessible process for employees to report concerns about retaliation or discrimination.

The independent consultant will also monitor Microsoft’s compliance with the settlement terms and provide annual reports detailing how the company handles discrimination complaints. These steps aim to create a work environment where employees can take necessary leave without fearing negative repercussions.

Workers have the right to take time off to care for themselves or their families without sacrificing career advancement or financial stability. Yet, the allegations against Microsoft demonstrate how even large and well-known employers can fail to protect employees’ rights.

In many cases, discriminatory practices are not overt but take on subtler forms that impact workers over time. For instance, lower performance reviews tied to leave usage may limit future opportunities for raises or promotions. These outcomes can compound, making employees feel undervalued or even forced out of their roles. 

If you believe you have been subjected to retaliation or discrimination for taking family or medical leave, knowing you have legal options is crucial. Employers are prohibited from interfering with or penalizing employees for using protected leave covered by laws like the CFRA or FMLA. Discriminatory practices can take many forms, from unfavorable performance reviews to denied promotions or reduced pay, and it is important to recognize the signs.

The San Francisco employment lawyers at McCormack Law Firm are dedicated to helping workers resolve employment disputes and hold employers accountable for unlawful practices. While we are not involved with this lawsuit, our legal team is ready to answer your questions. If you have experienced workplace retaliation or discrimination, contact us today for a free consultation.