Activision Blizzard will pay $55 million to settle a California civil rights lawsuit.
Video game maker Activision Blizzard has agreed to pay about $55 million to settle a California civil rights lawsuit filed by a female employee alleging sexual harassment, discrimination and pay gap complaints that prompted its acquisition by Microsoft. Agreed.
The settlement announced by the California Department of Civil Rights on Friday allows the company to sue the “Call of Duty” video game studio in 2021 over claims that the company “discriminated against women at the company, including denying them opportunities for advancement and paying expenses.” This is to resolve the lawsuit filed. There are fewer men than men doing substantially similar work,” the CRD said.
Under the settlement, which is subject to court approval, Activision will pay nearly $46 million from a settlement fund dedicated to compensating the company’s female employees and contract workers, and more than $9 million in attorneys’ fees and costs. Additionally, Activision will take steps “to ensure the company’s fair pay and promotion practices,” including hiring an independent consultant to evaluate compensation and promotion policies.
But the settlement also saw CRD withdraw its initial claims alleging a widespread culture of workplace sexual harassment at Activision, according to a copy of the agreement provided to MarketWatch. The document states the department is filing an amended complaint that removes the sexual harassment allegations against the company and focuses on gender-based pay and promotion claims.
CRD did not address previous sexual harassment claims against Activision in its announcement Friday. A department spokesperson said, “This statement largely speaks for itself regarding the historic nature of this $50 million-plus settlement agreement, which will bring direct relief and compensation to women harmed by the company’s discriminatory practices.”
“We are pleased that CRD has agreed to file an amended complaint that fully withdraws its 2021 claims alleging widespread and systematic workplace harassment at Activision Blizzard,” an Activision spokesperson said in a statement.
“We recognize the importance of the issues addressed in this agreement and are committed to fully executing all new obligations assumed as part of the agreement,” an Activision spokesperson said. “We are committed to ensuring fair compensation and promotion policies and practices for all employees, and we will continue our efforts to include qualified candidates from underrepresented communities in our outreach, recruitment and retention.”
The Wall Street Journal first reported news of the agreement Friday.
The California agency’s complaint was one of several recent high-profile investigations by state and federal regulators into allegations of workplace misconduct at Activision and the failure of Activision executives to respond appropriately.
Activision continued to deny the allegations, but it increased pressure on the Santa Monica, California-based company and its CEO Bobby Kotick, ultimately leading to a $68.7 billion takeover bid by Microsoft MSFT.
January 2022. The acquisition closed in October this year after receiving approval from UK and EU antitrust regulators, but the US Federal Trade Commission continues to challenge the deal in court. Kotick plans to leave the company he has led for more than 30 years at the end of this year.
According to the Journal, the settlement would be the second largest since the California Department of Civil Rights signed a $100 million deal with another Los Angeles-area video game developer, Riot Games, to resolve gender discrimination charges in 2021. According to the publication, it initially sought a much larger settlement with Activision, citing how the state estimated the company’s liability for nearly 2,500 employees with potential claims at nearly $1 billion.
