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Monday, March 4, 2024

California Ends Sexual Harassment Lawsuit Against Activision in $54 Million Settlement

More than two years after the California state agency, the California Civil Rights Department, accused video game giant Activision Blizzard of fostering a workplace culture steeped in sexual harassment and discrimination against female employees, a settlement has been reached, resulting in the withdrawal of allegations. The protracted dispute, which cast a shadow over Activision, known for popular games like Call of Duty, Guitar Hero, and World of Warcraft, has concluded with the company agreeing to set aside up to $47 million to address accusations of pay disparity and discrimination in promotions for female employees. The total settlement amount is approximately $54 million. According to the settlement, neither the court nor any independent investigation has substantiated allegations of systemic or widespread sexual harassment at Activision Blizzard. The case played a role in Microsoft’s decision to acquire Activision in a $69 billion deal this year. The original complaint, filed in 2021 by the California Civil Rights Department, alleged that Activision Blizzard had cultivated a pervasive “frat boy” workplace culture, leading to constant sexual harassment of female employees. Activision vehemently denied the accusations, calling them distorted and false. The settlement, signed by both parties, includes a review by Gilbert Casellas, a former chairman of the Equal Employment Opportunity Commission, who found no evidence of widespread harassment or recurring patterns of gender harassment at Activision. The settlement is subject to court approval and is expected to be filed next week.

The accusations against Activision Blizzard first surfaced in 2021 when the California Civil Rights Department, then known as the California Department of Fair Employment and Housing, asserted that an investigation had revealed a pervasive “frat boy” culture at the company, where female employees faced constant sexual harassment. Activision strongly contested the complaint, labeling it as including distorted and false descriptions and decrying it as irresponsible behavior from unaccountable state bureaucrats.

The settlement agreement not only brings an end to the acrimonious dispute but also highlights the findings of Gilbert Casellas, who conducted a review of Activision. According to Casellas, there was no widespread harassment or recurring patterns of gender harassment at the company. This aligns with the stance taken by Activision throughout the case, where it consistently maintained the falsehood of the allegations and the responsible and respectful nature of its workplace.

As part of the settlement, Activision Blizzard has committed to setting aside a substantial sum, totaling up to $47 million, to address issues related to pay disparity and discrimination in promotions for female employees. The agreement covers the period from 2015 to 2020 and aims to compensate women who were either employees or contract workers during this timeframe and claimed to have experienced inequitable pay.

The settlement agreement explicitly states that no court or independent investigation has found evidence supporting the allegations of systemic or widespread sexual harassment at Activision Blizzard. This serves as a significant clarification, potentially restoring the company’s image and reputation, which had been tarnished by the accusations over the past two years.

Moreover, the settlement outlines Activision’s commitment to hiring an external consultant to conduct an evaluation of the company’s compensation structures, promotion policies, and training materials. This step is aimed at addressing concerns raised during the dispute and ensuring a comprehensive review of Activision’s practices.

The conclusion of this case holds implications beyond the immediate resolution of the dispute. Activision Blizzard is a major player in the gaming industry, and the allegations had not only led to internal strife but also impacted the company’s standing in the broader business landscape. The settlement allows Activision to move forward from this contentious chapter and focus on its operations, including the recent acquisition by Microsoft.

In a year marked by increased attention to workplace culture, diversity, and inclusion, the resolution of the Activision Blizzard case underscores the significance of addressing such issues transparently and proactively. The gaming industry, like many others, is grappling with the need for more inclusive and respectful workplaces, and the aftermath of this dispute may prompt companies to reevaluate their internal practices and policies.

David Faber
I am a Business Journalist of The National Era
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