Activision Blizzard will pay $54 million to resolve allegations that the company discriminated against women, including by denying them promotion opportunities and paying them less than men for doing substantially similar work, the California Civil Rights Department announced Friday.
The agreement comes after more than two years of litigation between the video game publisher and regulators. California’s Department of Fair Employment and Housing sued Activision Blizzard in 2021, alleging that the company maintained a “pervasive ‘frat boy’ workplace culture” in which women were subjected to harassment, discrimination and retaliation.
As part of the settlement agreement, which HR Dive viewed, California regulators agreed to withdraw all allegations of harassment against the company. In a statement, an Activision Blizzard spokesperson said the company was “gratified to have reached an agreement” with the Civil Rights Department.
“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,” the spokesperson said. “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.”
California’s suit followed a two-year investigation into the company. Employees staged a walkout in the weeks following the suit while federal regulators launched their own investigations. A federal appeals court approved an $18 million settlement between Activision Blizzard and the U.S. Equal Employment Opportunity Commission in 2022.
In a press release, California’s Civil Rights Division said approximately $45.7 million of the total settlement amount will go to a fund dedicated to compensating workers. Women who worked at the company in California between Oct. 12, 2015, and Dec. 31, 2020, may be eligible to receive compensation. The settlement is pending court approval.
Other terms of the agreement stipulate that Activision Blizzard will distribute excess settlement funds to charitable organizations focused on advancing women in the video game and technology industries or promoting awareness around workplace gender equality issues, the agency said. The company also must retain an independent consultant to evaluate its pay and promotion policies and training materials.
“California remains deeply committed to promoting and enforcing the civil rights of women in the workplace,” Kevin Kish, director of the Civil Rights Department, said in the press release. “If approved by the court, this settlement agreement represents a major step forward and will bring direct relief to Activision Blizzard workers.”
It has been a lengthy two years for the company since the 2021 suit, which resulted in a reorganization of an HR department that faced heavy criticism. State regulators alleged that the function was “not held in high regard” and lacked employee trust, while complaints of harassment were “treated in a perfunctory and dismissive manner.”
Among other steps, Activision Blizzard shuffled its leadership ranks, appointing Disney veteran Julie Hodges as its chief people officer. However, the company kept CEO Bobby Kotick, who is alleged to have known about sexual misconduct claims years prior to the 2021 suit. In May, Variety reported that Kotick denied that Activision Blizzard had systemic harassment issues.
According to the agreement, no court or independent investigation has substantiated allegations of systemic or widespread sexual harassment at Activision Blizzard or that Activision Blizzard senior executives ignored, condoned or tolerated a culture of harassment, retaliation or discrimination. The agreement also states that no court or investigation found that the company's board of directors, including Kotick, acted improperly with regard to the handling of any instances of workplace misconduct.
Microsoft finalized a buy-out of Activision Blizzard in October. Prior to the deal, Activision Blizzard took steps such as eliminating mandatory arbitration agreements for employees who file sexual harassment or discrimination claims. In March, the company published a diversity, equity and inclusion update in which it disclosed representation data as well as changes to how it gathers and reports that data.
Correction: A previous version of this story incorrectly stated that the employer settled allegations of harassment. It settled several discrimination claims, but the state dropped the related harassment claims.
