May 3, 2010, 06:00:00AM. By Charles Benson

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Encino, CA: Activision (ATVI), the popular video game developer responsible for the Guitar Hero and Call of Duty series, is facing a lawsuit from 38 employees of its Infinity Ward imprint for alleged violations of California labor law stemming from unpaid royalties.

The employees, 26 of whom have already resigned over the incident, are suing ATVI for a total of $625 million, including punitive damages, interest, penalties, court fees and $54 million in unpaid bonuses for the fourth quarter of 2009, during which time the studio introduced the highly successful Modern Warfare 2 title to the market.

Plaintiffs in the case, who have taken to calling themselves "the Infinity Ward Employee Group," allege that ATVI purposefully withheld payments in an effort to force some employees to stay on staff against their will so that they could complete Modern Warfare 3, according to techspot.com.

In a recent statement, ATVI declared that the suit is without merit and that the company in no way violated established labor laws.

"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," said the company. "We look forward to getting judicial confirmation that our position is right."

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