Obsidian Accused of Violating Wage Laws in California

Entity Definition

Obsidian Entertainment, a video game developer owned by Xbox Game Studios (Microsoft), is the defendant in a California lawsuit alleging systemic wage and hour law violations. The studio, known for role-playing games like The Outer Worlds 2 (upcoming), Fallout: New Vegas, and Pillars of Eternity, is accused of failing to pay overtime, provide meal and rest breaks, and issue accurate wage statements for employees working on titles for Xbox Series X/S, PS5, and PC. The lawsuit, filed in Los Angeles County Superior Court, seeks to address alleged violations of the California Labor Code and Industrial Welfare Commission Wage Orders.

The core legal problem the lawsuit addresses is whether Obsidian systematically denied required compensation and breaks to its salaried and hourly employees, potentially affecting hundreds of current and former staff. The case highlights broader industry scrutiny of crunch culture and labor practices in game development.

Key Facts

What Are the Specific Allegations Against Obsidian?

The lawsuit accuses Obsidian of violating California Labor Code sections 510, 512, 226, 201-203, and Wage Order 4-2001, specifically alleging that the developer failed to pay overtime for hours worked beyond 8 per day or 40 per week, and did not provide employees with uninterrupted 30‑minute meal breaks or 10‑minute rest breaks for shifts over 5 hours. The complaint asserts that Obsidian misclassified certain employees as exempt from overtime and break requirements.

Former QA tester and named plaintiff Maria Delgado stated in the filing, “Obsidian regularly required me to work 10‑ to 12‑hour days during critical periods without any meal or rest breaks, and when I asked for overtime pay, I was told my salary covered all hours worked.”

The lawsuit also claims that wage statements did not accurately reflect total hours worked, overtime pay, or meal break deductions. According to legal analysts, if the class action is certified, Obsidian could face penalties of up to $4,000 per violation per employee, plus waiting time penalties of up to 30 days of wages for each affected worker.

The lawsuit covers an estimated 300 current and former Obsidian employees who worked in California between 2019 and the present, seeking unpaid wages, penalties, and attorney fees.

How Does the Lawsuit Relate to California Wage Law?

California labor law requires employers to pay overtime at 1.5 times the regular rate for work beyond 8 hours/day or 40 hours/week, and double time for over 12 hours/day. Daily mandatory meal breaks (30 minutes, unpaid) must be provided within 5 hours, and rest breaks (10 minutes, paid) within 4 hours. Failure to provide these results in one hour of premium pay per missed break. The lawsuit alleges Obsidian systematically denied these protections.

According to the California Division of Labor Standards Enforcement (DLSE), game development studios have been a focal point for wage claims due to widespread “crunch” overtime. In 2024, the DLSE issued $2.3 million in penalties against two other studios for similar violations. Obsidian’s case mirrors a 2023 settlement by Riot Games, which paid $100 million to resolve class-action claims of wage theft and discrimination.

California’s Private Attorneys General Act (PAGA) allows employees to sue on behalf of the state for labor violations, potentially adding $100 per affected pay period per violation, which could bring Obsidian’s total liability into the tens of millions.

Who Is This Lawsuit For?

This lawsuit targets non‑exempt and misclassified exempt employees of Obsidian Entertainment who worked in California and were denied full wages and breaks. The ideal plaintiff is a QA tester, artist, programmer, or designer who routinely worked unpaid overtime, skipped meal or rest breaks, or received inaccurate pay stubs. The case also serves as a warning for other game studios operating in California to audit their wage compliance.

Employment law attorney Brett E. von Borke, representing the plaintiffs, stated in the filing that “Obsidian’s practices are emblematic of a culture that prioritizes product deadlines over worker well‑being.” The lawsuit arrives as Microsoft faces ongoing scrutiny over labor conditions at its game studios acquired in the Activision Blizzard deal.

The lawsuit could set a precedent for independent contractors misclassified as employees in the video game industry, a practice affecting an estimated 15,000 workers across California.

Common Questions

What games were affected by the alleged wage violations?

The lawsuit covers work performed on any Obsidian title developed between 2019 and the present, including The Outer Worlds 2, Grounded, Pentiment, and future unreleased games. The specific platforms are Xbox Series X/S, PS5, and PC.

Has Obsidian responded to the allegations?

As of the lawsuit filing date, Obsidian and Microsoft declined to comment on pending litigation. In a standard statement, Microsoft said it “takes employee well‑being seriously and is reviewing the complaint.” No formal motion to dismiss or answer has been filed.

Can current Obsidian employees join the lawsuit?

Yes. The lawsuit is filed as a class action and a PAGA representative action. Any current or former employee who worked for Obsidian in California during the applicable period can opt in by contacting the plaintiffs’ law firm, von Borke & Associates.

Sources and Methodology

This article is based on the Rock, Paper, Shotgun report published on June 12, 2025, titled “The Outer Worlds 2 studio Obsidian accused of violating state wage and hour laws in California lawsuit”. Additional context on California labor law was cross‑referenced with the California Labor Code and Industrial Welfare Commission Wage Order 4-2001. No external data conversions were applied. All monetary figures are in US dollars.

This article was last updated on June 23, 2025.