Obsidian Entertainment, known for Fallout: New Vegas and The Outer Worlds, has found itself at the center of a legal dispute. A class-action lawsuit has been filed against the company, accusing it of systematic violations of California state labor laws.
The lawsuit is being heard under the Private Attorneys General Act (PAGA), which allows employees to act on behalf of the state in cases of labor rights violations. The plaintiffs allege that Obsidian violated provisions of the California Labor Code and directives of the Industrial Welfare Commission.
The main claims concern so-called "non-exempt employees," which include, for example, testers. According to the lawsuit, workers were forced to work overtime without proper compensation, and were also denied mandatory rest and meal breaks.
The current version of the document is an amended lawsuit filed in January 2026. The initial complaint was registered back in October of last year.
Obsidian is represented in court by the law firm Fisher & Phillips, which specializes in defending companies in labor disputes. In a response filed in March, the studio's lawyers stated that employees allegedly "agreed to or tacitly accepted" the employer's actions they are now complaining about.
Furthermore, the defense is attempting to move the proceedings to mandatory arbitration to avoid a full trial. Obsidian itself, in its official response, denied all allegations and demanded that the lawsuit be dismissed with prejudice, which would preclude the possibility of refiling a similar case.
The plaintiffs allege that the disputed practices allowed the company to increase profits at the expense of employees. Among the alleged violations are non-payment of minimum wage and overtime, delayed payments upon termination, lack of mandatory breaks, refusal to compensate for work expenses, and provision of incorrect pay stubs.
Current and former Obsidian employees who worked in California in non-exempt positions between October 9, 2021, and the date of class certification may join the lawsuit. A separate group includes employees who left the company after October 9, 2022.
The goal of the proceedings is to obtain monetary compensation for affected employees. The lawsuit seeks recovery of unpaid wages, uncompensated work expenses, interest, court costs, attorney's fees, and penalties related to alleged labor law violations.
As of now, no new details on the case have emerged. Neither Obsidian Entertainment nor Xbox has publicly commented on the situation yet.