May 20, 2024

Activision Blizzard will pay $54.9 million to settle a lawsuit by California’s Civil Rights Department alleging a pattern of pay and promotion practices that discriminated against women.

The settlement, announced Friday, comes after Microsoft closed its $69 billion takeover of Activision Blizzard in October following concessions Microsoft made to clear regulatory objections in the U.K. Activision Blizzard’s franchises include Call of Duty, World of Warcraft, Guitar Hero and Diablo.

Under the agreement, Activision Blizzard will pay about $54.875 million to cover “direct relief to workers” as well as litigation costs. Of that total, approximately $45.75 million will go toward a settlement fund dedicated to compensating workers. The agency said women who worked as employees or contract workers for Activision Blizzard in California between Oct. 12, 2015, and Dec. 31, 2020, may be eligible to receive compensation. “At this time, no action is needed by individuals covered under the proposed agreement and additional information will be posted on CRD’s website upon approval by the court,” CRD said.

Under the settlement, CRD is dropping allegations from its initial lawsuit filed in 2021 that claimed Activision Blizzard had a widespread culture of systemic harassment and a “pervasive frat-boy workplace culture.”

“California remains deeply committed to promoting and enforcing the civil rights of women in the workplace,” CRD director Kevin Kish said in a statement. “If approved by the court, this settlement agreement represents a major step forward and will bring direct relief to Activision Blizzard workers. At the California Civil Rights Department, we will continue to do our part to fight for the rights of our state’s residents.”

In a statement, Activision Blizzard said, “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.”

CRD’s June 2021 suit against the Santa Monica-based video-game giant came after more than two years of investigation and alleged violations of California’s Equal Pay Act and Fair Employment and Housing Act. The company said it is “gratified” that the Civil Rights Department agreed to file an amended complaint that entirely withdraws its 2021 claims alleging widespread and systemic workplace harassment at Activision Blizzard.

CRD noted in the agreement that “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard.” In addition, the agency acknowledged that no court or independent investigation substantiated any allegations that Activision Blizzard’s board, including CEO Bobby Kotick, “acted improperly with regard to the handling of any instances of workplace misconduct.”

Activision Blizzard’s settlement with CRD is in addition to measures the company adopted through a separate 2021 consent decree with the U.S. Equal Employment Opportunity Commission. It also has made “proactive recruitment and retention steps” as described in the company’s 2022 environmental, social and governance report, CRD noted.

In addition to payments to the fund for affected women employees, the settlement agreement — if it receives court approval — will require Activision Blizzard to distribute any excess settlement funds to “charitable organizations focused on advancing women in the video game and technology industries” or “promoting awareness around gender equality issues in the workplace,” per CRD. Activision Blizzard also will be required to retain an independent consultant to evaluate and make recommendations regarding its compensation and promotion policies and training materials and to “continue its efforts regarding inclusion of qualified candidates from underrepresented communities in outreach, recruitment and retention.”

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