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Microsoft Deal Throws Obstacles in Path of Activision Organizers

Jan. 24, 2022, 5:03 PM

Microsoft Corp.‘s acquisition of Activision Blizzard Inc. is shaking up the fight to unionize workers at the video gaming company and presenting new challenges for labor advocates.

Labor groups initially saw embattled Activision as an easy target and a way to gain a foothold with tech workers, but now they are up against a much tougher foe in Microsoft, a giant that has previously avoided union efforts and can bring new resources to push back on organizers.

Organizers insist Microsoft’s nearly $69 billion deal for Activision, expected to close in fiscal 2023, won’t alter their plans or organizing goals, and on Jan. 21 a group of workers at Activision-owned Raven Software said they had called on the company to voluntarily recognize their union, Game Workers Alliance.

Despite the Raven developments, organizers at Activision and its units face a tougher path to a bargaining agreement with Microsoft now in the game, industry watchers and labor attorneys said.

“The road for formal unionization has been significantly complicated and nobody should be under any illusions about that,” said Michael C. Duff, a law professor at the University of Wyoming.

“You can expect with a company like Microsoft that they’re going to resist more vigorously,” he said. “The bigger the company, the better the lawyers and the more sophisticated the playbook.”

Raven Organizers

The 34 quality assurance testers seeking official union recognition at Raven said they would give the company through Tuesday, Jan. 25, to respond, after which they will file for a union election through the National Labor Relations Board, the Washington Post first reported.

Despite cheers from union advocates, labor lawyers said the effort could still fail. The Microsoft deal makes it less likely Activision would recognize the Raven union or other employee movements, Duff said.

“I simply don’t believe that Activision or any tech company similarly situated would voluntarily recognize the union,” he said. “Anyone would understand that such an action would unlikely be viewed with favor by the acquiring, successor company.”

Companies that inherit a union through a merger are typically required under federal law to bargain with the workers. But it’s rarely that simple; there’s no bright-line legal standard, and the federal labor board must weigh a variety of factors in each case. Activision’s situation is more complicated than most, given that the deal hasn’t been finalized and there’s been no union election.

“It raises significant issues,” Jerry Hunter, a former NLRB general counsel and an employment attorney at Bryan Cave Leighton Paisner, said about the impending deal.

A question of particular importance is whether and by how much Microsoft plans to change Activision’s structure.

If Activision workers filed for an election before the merger went through—and the labor board were to find that the proposed union’s size and scope was appropriate—the workers might have an edge, Hunter said. But if Microsoft absorbs Activision completely instead of keeping it as a subsidiary, the company could argue the union doesn’t fit in with the new business structure, he added.

New Strategy

Communications Workers of America helped organize the Game Workers Alliance at Raven as well as A Better ABK, the group seeking a union at Activision.

The Activision effort, sparked by an employee revolt over allegations of workplace sexual harassment and discrimination, is also in its early stages. In December, A Better ABK asked workers to sign union authorization cards to secure support for an election.

The group said, after Microsoft announced the deal, that they would push ahead with organizing.

“The news of Activision’s acquisition by Microsoft is surprising, but does not change the goals of the ABK Worker’s Alliance,” the group tweeted on Jan. 18. “Whatever the leadership structure of the company, we will continue our push to #EndAbuseInGaming.”

Big tech has successfully resisted organizing efforts in the past, but the approach taken at Raven—union drives by smaller bargaining units—could break through, said Marcus Courtney, a public affairs consultant in Seattle and co-founder of the Washington Alliance of Tech Workers.

“The playing field still tilts towards the employer, that hasn’t changed; but workers have shown there are opportunities for gains despite the employer advantage,” Courtney said, pointing to recent organizing wins by Starbucks workers.

“We’re talking about hundreds of thousands of workers on the West Coast that are eligible to join unions at tech companies,” he said. “That’s what’s appealing about this for organizers and makes companies worried—the possibility of multiple union drives at once by small bargaining units.”

CWA and A Better ABK didn’t respond to requests for comment.

Game Changer

Beyond the complications posed by the deal, Microsoft itself presents organizers at Activision with a powerful opponent. “Microsoft has more resources,” Duff said, adding, “If workers were to strike, they could replace them.”

Microsoft’s arrival also forces union organizers to contend with a new corporate culture that could undercut the employee revolt at Activision, said Margaret O’Mara, a professor at the University of Washington.

“Microsoft has established itself as being different from other tech companies,” O’Mara said. “It’s not Silicon Valley. It’s always stood apart and had distinctive approaches.”

“From the perspective of the tumult at Activision and its unionization effort, is that this company, where organizing is being driven by a toxic workplace culture, is being acquired by a company that hasn’t seen as much employee activism as say Google or Amazon, and whose leadership has made a clear effort to create a more hospitable workplace,” she said.

Microsoft and Activision Blizzard didn’t respond to requests for comment.

Labor Landscape

The union effort at Activision will be closely watched, coming amid a resurgent labor movement that saw strikes and walkouts at several large companies last year.

“The fact that Microsoft is buying Activision, it is, in essence, buying a union drive, so it’s buying into that activist worker landscape that is in many ways sweeping the country,” Courtney said.

“The next 12 months is the most pro-union environment that workers have faced in decades,” Courtney said. “We’re seeing an unprecedented level of organizing that’s happening.”

Duff, a former Teamsters organizer, shared a more skeptical view, noting that despite renewed labor efforts membership remains at historic lows. The private-sector unionization rate is down to 6.1 percent.

“There’s a big distance from employee activism to actually going down the very long road to obtaining formal union representation,” Duff said.

“If Activision’s intent was simply to resist the union and run the clock out, I think they could do that. Even marginally competent lawyers would be able to press the process out into the distance. And in many ways, that’s the management playbook.”

To contact the reporters on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com; Ian Kullgren in Washington at ikullgren@bloombergindustry.com

To contact the editors responsible for this story: Meghashyam Mali at mmali@bloombergindustry.com; John Lauinger at jlauinger@bloomberglaw.com

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