A group of 38 people calling themselves the "Infinity Ward Employee Group" has filed a lawsuit against Activision, citing breach of contract, breach of the implied covenant of good faith and fair dealing, violation of California labor code... and the list goes on. The group would like to be paid a "large amount" of unpaid royalties, thank you very much.
One of IWEG's attorneys, Bruce Isaacs, spoke to G4 on the phone earlier today, and observed:
"Activision owes my clients approximately $75 million to $125 million dollars. Activision has withheld most of the money to force many of my people to stay, some against their will, so that they would finish the delivery of Modern Warfare 3. That is not what they wanted to do...
Activision has no right to withhold their money -- our money."
According to G4, who received a copy of the lawsuit, IWEG is made up of a "significant portion" of the creative team who worked on Call of Duty: Modern Warfare 2. They claim that US$28 million in MW2-related bonuses has been delivered to Infinity Ward employees, but allege there is at least US$54 million remaining - from 2009 profits alone!
...the maths doesn't stop there though, with the group seeking to recover compensatory damages "between $75 million and $125 million, if not more". That's not an arbitrary number, mind you. It's been derived from unpaid bonuses for sales of the game in 2009 and 2010, some "technology/engine" royalties, performance bonuses, studio bonuses, lost value on "restricted stock units" that Activision allegedly promised would vest when MW2 sales eclipsed MW1 sales (which happened "long ago"), and money owed as it relates to MW2 "sister games". Those sister games include - but are not limited to - the fabled Modern Warfare 3, if that game is ever delivered and marketed. Plus there's some interest payments involved there too, of course.
Interestingly, IWEG also brings up that Activision "improperly withheld" this amount of money as a sort of ransom, forcing the devs to keep working for the company "so that Activision could receive delivery of Modern Warfare 3". In the eyes of IWEG, this was a "calculated, purposeful and malicious decision" made in an attempt to keep Infinity Ward employees in a job many of them did not want, just so they would finish the game.
The lawsuit reads, in part:
"In short, Activision withheld the property of the IWEG in an attempt to keep the employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3."
And, on top of all that, IWEG also claim that Activision violated the California Labor Code thanks to their alleged failure of payment.
"Activision has a duty to pay all of the members of the IWEG all of the money they are owed [...] within 72 hours of the termination of their employment.
"Activision, however, has failed to do so."
One thing Activision has not failed to do today, however, is respond to these claims, with a statement released via email.
"Activision believes the action is without merit.
"Activision retains the discretion to determine the amount and the schedule of bonus payments for MW2 and has acted consistent with its rights and the law at all times. We look forward to getting judicial confirmation that our position is right."
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