Bethesda union files legal complaint calling Fallout announcements a smokescreen for labor law violations

Bethesda developers were blindsided with termination letters the same day Xbox and Bethesda announced Fallout 5 is in early development, and now the union is filing a legal complaint against the developer for "continuing to violate labor laws in Canada."

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The union alleges Bethesda's layoff and the timing of the announcement were a calculated move to distract from the hundreds of employees who were recently laid off as part of Microsoft's sweeping layoffs that affected approximately 3,200 people, and resulted in the closure of four studios.

The OneBGS union claims that Canadian employees at Bethesda Game Studios received termination notices via email on July 17, the same day the company revealed major Fallout and Elder Scrolls remasters, and hinted at a new Fallout title from Obsidian. The union alleges Bethesda used these announcements as a smokescreen to mitigate the negative public perception of employees being laid off.

"Previously, on Monday, July 6th, dozens of employees from Bethesda Game Studios across the US and Canada were told via video call that they were being laid off. They were told they would remain employed until September while the company negotiated severance with our union; this at least provided some solace and breathing room," the union said in a message on Bluesky

Employees had been told during a July 6 video call they would remain employed until September while severance was negotiated. However, on July 17, the affected Canadian employees received termination letters stating they would receive minimum severance, eight weeks' pay in lieu of minimum legal notice, and all outstanding pay, such as vacation and sick leave. Additionally, the employees were immediately disconnected from group benefits such as health insurance.

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What severance and pay did the termination letters for Canadian employees reportedly offer?

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Which employee benefits were reported to have been cut off immediately after the July 17 terminations?

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The union argues that Bethesda and Xbox are violating Canadian labor laws by cutting staff early and offering only the legal minimum in severance. The Communications Workers of America and CWA Canada have already filed a joint legal complaint, with OneBGS now following suit.