Infinity Ward Employee Group Sues Activision

According to documents obtained by G4tv.com, the suit is being collectively filed by the 'Infinity Ward Employee Group,' comprising 38 developers. They allege that Activision violated California labor codes and deliberately withheld deserved payments related to the success of Call of Duty: Modern Warfare 2 'in an attempt to keep the employees hostage so that Activision could reap the benefit of the completion of Modern Warfare 3.'

I've obtained a copy of a lawsuit filed this morning in the Los Angeles Superior Court by 38 plaintiffs, calling themselves the "Infinity Ward Employee Group," against Activision. The Infinity Ward Employee Group (whom I'll refer to as IWEG throughout the rest of this story) alleges breach of contract, breach of the implied covenant of good faith and fair dealing, violation of California labor code and more. The group is after a large amount of unpaid royalties.

"Activision owes my clients approximately $75 million to $125 million dollars," said Bruce Issacs, one of the IWEG's attorneys at Wyman & Issacs LLP, over the phone this afternoon. "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. Many of them. My clients' entitled to their money. Activision has no right to withhold their money -- our money."

The IWEG contains "a significant portion of the members of the creative team" who "designed, developed and delivered" Call of Duty: Modern Warfare 2 to Activision. According to the lawsuit, $28 million has been delivered to Infinity Ward employees for bonuses related to Modern Warfare 2, but the suit alleges at least $54 million is still due from 2009 profits alone.

They want more than $54 million, however. The IWEG is looking "to recover between $75 million and $125 million, if not more, in compensatory damages." That number's derived from:

 * Unpaid bonuses from 2009 and 2010 sales generated by Modern Warfare 2 -- fourth quarter 2009 and first quarter 2010, specifically.
 * Bonuses "due and owing to them" past first quarter 2010.
 * "Bonus/royalty/profit participation" related to "technology/engine" royalties, "other special performance bonuses," "other studio bonuses" or "any other bonus/royalty/profit participation."'
 * Lost value on "restricted stock units" that Activision "promised" would vest (read: own it in your own name and purchase it from Activision) when Modern Warfare 2 sales eclipsed Modern Warfare 1, which "has long ago occurred."
 * Money owed as it relates to Modern Warfare 2 "sister games, including but not limited to" the oft-mentioned Modern Warfare 3, "if Modern Warfare 3 is ultimately delivered and marketed."
 * Interest rates related to the above sums of money.

The lawsuit focuses on royalties generated for Modern Warfare 2 following release and the agreement between Infinity Ward employees and Activision for receiving the subsequent bonuses. The IWEG contends the only condition for becoming eligible for said bonuses was delivering Modern Warfare 2 in time for the game's intended November 10, 2009 launch. Modern Warfare 2 did launch as scheduled on November 10 last year, generating $1.1 billion in 2009.

UPDATE: Activision has issued a brief response to the lawsuit:
"Activision believes the action is without merit," said a company spokesperson over e-mail just moments ago. "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.