Activision agrees to pay $50M to settle state civil rights claims

The California Civil Rights Department reached a settlement with Activision Blizzard over its claims alleging a culture of sexual harassment and sexism at the game company, known for its popular Call of Duty game.

The Santa Monica video game company, which has been acquired by Microsoft Corp. in a deal still being challenged by the U.S. Federal Trade Commission, will pay $54.875 million as part of the settlement.

Under the agreement, which is subject to approval by a Los Angeles County Superior Court judge, 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.”

“California remains deeply committed to promoting and enforcing the civil rights of women in the workplace,” department 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.

The state agency, then known as the California Department of Fair Employment and Housing, sued Activision Blizzard in 2021 accusing the company of a host of labor code violations. California Civil Rights Department v. v. Activision Blizzard Inc., 21STCV26571 (L.A. Super. Ct., filed July 20, 2021).

The company fought back hard against the allegations, maintaining there has been no pay or promotion discrimination for years and that an internal investigation determined the claims were false.

Activision and its attorneys with Munger Tolles & Olson LLP and Paul Hastings LLP could not be immediately reached for comment Friday.

Attorneys for the company denied the state’s allegations and argued in a summary judgment motion that the state had access to this “irrefutable” evidence for years, citing an expert analysis asserting that women were paid slightly more than men for similar work.

Of the proposed settlement amount, roughly $45.75 million will go to a settlement fund to compensate workers while the remainder – after litigation costs – will be distributed to charitable organizations “focused on advancing women in the video game and technology industries and promoting awareness around gender equality issues in the workplace.”

In May, the department reached a $100 million settlement with Riot Games involving allegations of systemic sex discrimination, harassment, and retaliation.

Activision settled a lawsuit by the U.S. Equal Employment Opportunity Commission on similar claims last year for $18 million.