Microsoft’s Union-Neutral Deal Spurs Video Game Organizing Wave

Microsoft Corp.‘s union-friendly stance has opened the door for organizing among online gaming studios nationwide in what legal observers say is a model for other companies looking to establish better relationships with organized labor.

Microsoft’s deal last year with the Communications Workers of America to remain neutral during unionization campaigns at Activision Blizzard Inc.—which the tech giant is vying to acquire—is a friendlier approach to worker organizing than many large corporations take.

The agreement led CWA, which had been vocally critical of the acquisition bid, to endorse the $69 billion deal as it faces a gauntlet of scrutiny from government bodies in the US, UK, and EU.

Microsoft’s stance toward employee organizing is a sign that not all large employers will fight unionization, said Columbia Law School professor Kate Andrias.

“When you take away the kind of company campaigns that are run during an organizing drive, win rates for unions go way up and the rate of first contracts go way up,” she said. “I think it is plausible that this could serve as a blueprint for other socially responsible companies that would benefit from making alliances with worker groups to achieve shared goals.”

An employer like Microsoft may choose to enter a neutrality agreement if it believes labor organizing is likely in order to get concessions from the union, said Amy Gaylord, Co-Chair of Akerman LLP’s labor law practice.

“I think Microsoft saw the writing on the wall, that their acquisition of Activision Blizzard would not be approved with the CWA standing in their way,” she said.

Microsoft President Brad Smith has said executives were committed to making it easier for employees to exercise their right to organize.

“We respect this right and do not believe that our employees or the company’s other stakeholders benefit by resisting lawful employee efforts to participate in protected activities,” Smith said in a 2022 memorandum laying out the company’s labor principles.

A spokesperson for Microsoft told Bloomberg Law the company was prepared to “learn from and build on” its work with CWA in the future.

The Washington-Baltimore News Guild, which is affiliated with the Communications Workers of America, represents employees of Bloomberg Law.

Organizing Boost

Labor organizers see Microsoft’s actions as accelerating a wider trend of unionization in an industry where labor has historically struggled.

“In this moment of labor organizing, it’s important to have an example of a company who’s doing something different,” Beth Allen, communications director at CWA, told Bloomberg Law. “Hopefully other companies will see Microsoft and think on how they could behave differently, potentially to the benefit of the entire organization.”

Over 300 quality assurance testers at ZeniMax Media Inc., the Microsoft studio that produces games like The Elder Scrolls, Fallout, and Doom, are now represented by CWA after Microsoft voluntarily chose to recognize the union following an online card-check election in January.

The workers say Microsoft’s neutrality agreement vastly sped up the process for ZeniMax to unionize, and is helping them at the negotiating table.

“They’ve respected the agreement and it’s really created an environment where we’re able to more freely discuss how we feel,” said ZeniMax organizer and senior quality assurance tester Dylan Burton. “We don’t have to feel like we constantly have to be watching over our shoulders so I feel really lucky because I know it’s not like that at most places.”

Workers at Raven Software, the Activision subsidiary behind Call of Duty, and Blizzard Albany also voted to unionize with CWA last year amid the company’s ongoing legal issues over an alleged “frat boy” culture.

A third Activision unit at Boston-based Proletariat Inc., which produces games like Spellbreaker and World of Warcraft, filed a union election petition with the National Labor Relations Board in December 2022 but later withdrew it.

Early Discussions

Kate Edwards, former director of the International Game Developers Association and former Microsoft geopolitical strategist, said members of the gaming industry have been discussing unionization since the early 2000s but were afraid to be the first to organize.

“People in this industry are passionate and love the work they do so companies will weaponize that against them,” she said. “There’s all this fear that your boss will respond with ‘you don’t want to work those hours? That’s cool, there’s 20 eager people coming out of school who would just die to work on this game.’”

Workers at now-shuttered Vodeo Games were the first to formally seek union representation in late 2021. Over the next 18 months, the employees of a handful of other video game companies won union representation. Workers at Sega of America, the maker of Sonic the Hedgehog, are the latest to organize, filing a representation petition with the NLRB in April.

The units, most of which are led by QA testers, are demanding improved pay and benefits along with protections from layoffs and workplace discrimination. Working hours can stretch into 60 or 70 per week during “crunch time” right before a new product launch, and workers are also asking companies to ease that crunch in favor of a better work-life balance.

“They just want to have appropriate guardrails for their jobs,” said Ben Speight, an organizer for the International Alliance of Theatrical Stage Employees. “It’s about having consent, collective consent from the workforce and fundamental respect on a human level.”

Corporate Blueprint

The neutrality agreement could set an example for other companies that are looking to build relationships with labor unions.

Microsoft’s approach isn’t unique, but is highly unusual in large corporations, said Benjamin Kim, a partner at Boies Schiller Flexner LLP. Companies might choose to take this approach if they decide that litigating labor disputes isn’t worth the time and expense, he said.

“Employers have to have an ongoing relationship with unions so these types of voluntary agreements help to set the tone of what the relationship is going to be like early on,” Kim said. “That can be very helpful down the road once you get into bargaining for a contract or any potential future workplace issues.”

The video game industry might be the right fit for this type of approach because most gaming companies were formed within the last 25 years. Therefore, they likely don’t have the “hardcore traditional values” that push other companies to fight unionization, Kim said.

“I think a lot of people are watching to see how this shakes out but if it ultimately ends up being beneficial for the company, then you could see a lot of other deals like this being made in the future,” he said.