Activision To Settle Discrimination Suit For $54 Million [Update]

Activision Blizzard has been the subject of scrutiny for several years now, due to its alleged “Boys’ Club” corporate culture. And now, The Wall Street Journal reports the embattled gaming company will pay roughly $US54 million to settle a 2021 gender discrimination and harassment lawsuit—the same lawsuit that seemingly prompted Microsoft’s landmark $US69 billion acquisition of the Call of Duty and Overwatch publisher that was finally greenlit in October after an 18-month legal battle.

In a statement to Kotaku, an Activision Blizzard spokesperson shared further context on the settlement:

We are gratified that we have reached an agreement with the California Civil Rights Department (CRD) today, as the CRD has now announced in a press statement. We appreciate the importance of the issues addressed in this agreement and we are dedicated to fully implementing all the new obligations we have assumed as part of it. We want our employees to know that, as the agreement specifies, we are committed to ensuring fair compensation and promotion policies and practices for all our employees, and we will continue our efforts regarding inclusion of qualified candidates from underrepresented communities in outreach, recruitment, and retention.

We are also gratified that the CRD has agreed to file an amended complaint that entirely withdraws its 2021 claims alleging widespread and systemic workplace harassment at Activision Blizzard. As the CRD acknowledged explicitly in the agreement, “CRD is filing along with a Proposed Consent Decree a Second Amended Complaint that withdraws, among other allegations and causes of action, the Fifth Cause of Action – “Employment Discrimination – Because of Sex – Harassment.” As the CRD also expressly acknowledged in the agreement, “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard.” In addition, the CRD has acknowledged that no court or independent investigation substantiated any allegations that “Activision Blizzard’s Board of Directors, including its Chief Executive Officer, Robert Kotick, acted improperly with regard to the handling of any instances of workplace misconduct.”

California’s Civil Rights Department (CRD) sued Activision back in 2021, claiming company leadership willfully ignored employee complaints regarding pay disparity, gender- and sexuality-based harassment, and discrimination.

In a press release on Friday, the CRD noted that the game publisher will implement steps to ensure more equitable standards for compensation and advancement. “Activision Blizzard will take additional steps to help ensure fair pay and promotion practices at the company and provide monetary relief to women who were employees or contract workers in California between October 12, 2015 and December 31, 2020,” a representative for the agency wrote. The agreement is still subject to court approval.

According to a December 18 report from Inverse, Activision Blizzard will pay around $US45 million into a fund to be split among women who worked for the developer between October 2015 and December 2020. An additional $US10 million will be used to cover the CRD’s legal fees.

“Though I’m glad it’s finally over, it feels bittersweet that the harassment charges had to be dropped and the only claim could be for discrimination,” a former employee who will receive part of the settlement told Inverse. “The silver lining: more women won’t have to go through the horrible process of being depositioned only to have their trauma exploited and used against them by ABK lawyers.”

Activision has repeatedly denied these charges. Company representatives have also claimed that an internal investigation by its board of directors concluded that the allegations against the company were without merit. When the Microsoft acquisition closed earlier this year, longtime Activision CEO Bobby Kotick was asked to stay for another two months, through the end of 2023.

According to the Journal, which broke the story regarding the settlement, the state of California had initially estimated Activision’s liability for a far greater amount.

The state in 2021 estimated Activision’s liability at nearly $US1 billion to 2,500 employees who might have claims against the company, court documents show. Activision had around 13,000 employees as of the end of 2022.

Citing anonymous sources familiar with the matter, the Journal goes on to claim that state agencies had “initially sought an amount much greater than the settlement Riot Games paid earlier this year to settle its lawsuit.” That ruling in May 2023 touched upon similar grievances relating to workplace culture and resulted in a $US100 million settlement for plaintiffs.

This article has been updated to include statements from Activision and the California Civil Rights Department. It has also been updated to include additional reporting from Inverse regarding how funds will be dispersed and comment from a settlement recipient.