Activision Blizzard, California in pact to end workplace harassment suit

Activision Blizzard will pay nearly $55 mn to resolve its legal fight with the state of California over allegations the gaming company permitted systemic workplace harassment.

Activision Blizzard will pay nearly $55 million to resolve its legal fight with the state of California over allegations of workplace harassment, (REUTERS)

Activision Blizzard will pay nearly $55 million to resolve its legal fight with the state of California over allegations the gaming company permitted a widespread and systemic workplace harassment. The state's lawsuit had alleged the maker of video games including World of Warcraft and Diablo had a ‘frat boy culture” and subjected women to unequal pay, constant sexual harassment, and retaliation. The video games maker will pay approximately $54,875,000 to cover direct relief to workers and litigation costs, the state's Civil Rights Department said in a statement Friday. About $45,750,000 of that money will go to a settlement fund dedicated to compensating workers.

The litigation, which at times has involved the US Equal Employment Opportunity Commission, has played out across federal and state courts in California since 2021.

The state is withdrawing its claims as part of a comprehensive settlement and proposed consent decree, resolving all open regulatory investigations or complaints relating to employee workplace conduct, according to Activision. The agency's withdrawal would come more than two years after it said it had conducted an investigation into the the game maker's culture and compliance practices.

In its agreement, the CRD—formerly known as the Fair Employment and Housing Department—expressly acknowledged that “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard,” the Santa Monica, California-based company said.

No court or independent investigation, including CRD's own investigation, substantiated that the company's Board or CEO acted improperly with regard to handling instances of workplace misconduct, the games maker added.

Appeal Dropped

Women who worked as employees or contract workers for the company in California between Oct. 12, 2015 and Dec. 31, 2020 may be eligible for compensation, the state said.

The state also will drop its appeal of a federal judge refusing to allow it to intervene in Activision's court-approved consent decree with the EEOC, according to the company's statement.

Activision agreed to pay $18 million there to resolve claims the gaming company allegedly discriminated against and harassed female workers. The state agency's appeal is now before a three-judge panel of the US Court of Appeals for the Ninth Circuit.

CRD and Activision Blizzard also agreed to resolve unproven claims of unequal compensation and promotion practices from 2015-2020 with the games maker denying it had any pay or promotions inequities, Activision said.

The games maker will hire “an independent consultant to evaluate and make recommendations regarding Activision Blizzard's compensation and promotion policies and training materials,” according to the CRD.

Paul Hastings LLP represents Activision. Outten & Golden LLP represents the state. EEOC counsel represents the agency.

The cases are US Equal Employment Opportunity Commission v. Activision Blizzard, Inc., 9th Cir. App., Nos. 22-55060, 22-55587, and 22-55515, 12/15/23 and Department of Fair Employment and Housing v. Activision Blizzard, Cal. Super. Ct., No. 21STCV26571, 12/15/23.