By mzuckerm 1 Comments
This probably isn't news to anybody who follows the industry closely (or even moderately closely), but the recently fired former heads of Infinity Ward (to my knowledge, a wholly-owned subsidiary of Activision) have filed a lawsuit against their former employer, and the allegations are shocking. Kotaku has the full text of the legal complaint, and Above the Law has some snarky initial legal commentary. As a contracts lawyer (although, admittedly, not one with a ton of employment law experience) I thought I'd add a few of my thoughts after reading through. As an aside, these are some of the most easy to read court documents I've ever come across.
1. The complaint was authored by two partners and an associate working for a major law firm. Given how much these guys charge (in all likelihood, $400 - $900 an hour apiece), I think it's clear that Vince Zampella and Jason West mean business.
2. Zampella and West make a number of specific claims (including breach of contract, breach of the implied covenant of good faith and fair dealing, and wrongful termination), but each of these relies on basically the same facts to claim that Activision fired Zampella and West without cause to avoid paying them what they were owed under their contract.
3. So I think this really comes down to what was in their contract. And because the applicable contract(s) (there are probably more than one) haven't been released yet, analyzing the merits of these claims is pretty much impossible right now. Zampella and West had an employment contract set to expire in 2008. They agreed to an extension of this contract, along with other terms, in a memorandum of understanding (which is also in all likelihood a binding contract). The actual terms agreed to in that memorandum of understanding will be critical to the outcome of this case.
4. The relief requested is huge. In monetary terms, Zampella and West are asking for $36 million (plus punitive damages, legal costs, etc.). In addition to that, though, and perhaps far more significantly (although less likely to happen, in my opinion), they also insist that they maintain rights in the Modern Warfare series and in certain Call of Duty games as well. So they argue that Activision may not release additional games in these series without Zampella's and West's written permission. Given what went down between them recently, I imagine Activision would have to pry that permission from their cold, dead hands. And given that these franchises generate hundreds of millions of dollars to billions of dollars in sales with each release, that could really affect Activision's bottom line.
5. It seems likely this case will be tried under California state law. I don't have much experience in this area, but I suspect California law to be more employee-friendly than the laws of many other states.
6. Some of the allegations made against Activision look really, really bad from a public relations perspective. They apparently brought Zampella and West into the office over the President's Day weekend, grilled them for hours in a windowless conference room (this actually sounds a lot like working as an associate at a law firm to me), wouldn't tell them what they were suspected of, brought some of their subordinates to tears (and wouldn't let them be consoled), and demanded access to personal computers and documents. After all that, Zampella and West were fired for "insubordination", a pretty vague term that could mean nearly anything. All in all, it sounds like absolute tyranny.
All of this being said, we've only heard one side of the story on this issue (and only part of that side of the story so far). But this sounds really bad for Activision. If the facts that emerge further down the line support these allegations, I may have to go out of my way to purchase Activision games used from now on.