Activision Blizzard has agreed to pay $54 million to settle a lawsuit filed by California’s Department of Fair Employment and Housing (DFEH) alleging gender discrimination and sexual harassment at the video game company. The settlement, announced on December 16, 2023, resolves a three-year legal battle stemming from shocking allegations of workplace misconduct at Activision Blizzard.
Background of the Lawsuit
The DFEH lawsuit, filed in July 2021, accused Activision Blizzard of fostering a “frat boy” work culture where female employees were subjected to constant sexual harassment, paid less than men, and passed over for promotions.
Specifically, the DFEH alleged that:
- Female employees faced relentless sexual harassment involving groping, comments, and advances
- Senior executives and creators engaged in blatant harassment without repercussions
- Human resources failed to take harassment and discrimination complaints seriously
- Women were paid less and promoted more slowly than men
The lawsuit sent shockwaves through the gaming industry and led to player protests, calls for executive resignations, and a federal investigation.
Over the past two years, Activision Blizzard has fired or pushed out many senior male executives accused of misconduct and sought to reform its HR policies. However, California maintained that systemic issues persisted at the publisher of Call of Duty, World of Warcraft and other major franchises.
Key Details of the Settlement
Under the terms of the settlement, Activision Blizzard agrees to:
| Settlement Term | Description |
|---|---|
| $54 million settlement fund | Money will be distributed to eligible claimants through a special master-monitored claims process |
| Strengthened policies and training | Improved sexual harassment policy and specialized equality training for staff |
| Exit interviews | Interviews with HR when employees leave to identify issues |
| Continued compliance checks | State can inspect records and interview employees to ensure compliance |
Additionally, Activision Blizzard does not admit wrongdoing under the settlement.
Reactions to the Settlement
California’s civil rights regulator said the settlement will provide compensation for and address the effects of harassment and discrimination. DFEH Director Kevin Kish called the reforms “some of the most protective and impactful in our state’s history.”
However, some critics argue the settlement isn’t harsh enough given the gravity and scale of the allegations. “It feels like a slap on the wrist,” said former Activision Blizzard employee Jessica Gonzales. Others suggest the mandated reforms lack teeth and will not lead to meaningful change.
On social media and gaming forums, fan reactions ranged from dissatisfaction to outrage over the settlement terms. Players threatened boycotts over the perception that executives avoided accountability.
Meanwhile, Wall Street investors appeared relieved at the settlement, sending Activision Blizzard shares up over 2% on Friday. “It’s a positive step forward for the company,” Wedbush analyst Michael Pachter told media outlets.
The settlement comes as Microsoft pursues its proposed $69 billion acquisition of Activision Blizzard. Microsoft has said it is committed to changing the publisher’s culture and implementing stronger harassment prevention policies. It remains to be seen how much impact the pending Microsoft takeover will have.
What Comes Next
Looking ahead, eligible claimants can now file to receive compensation from the $54 million settlement fund. A court-appointed special master will oversee the claims process and distribution of funds over the next few years.
Activision Blizzard must also implement new sexual harassment policies, training programs, complaint procedures, and compliance mechanisms as part of the settlement. California’s regulator will monitor the company’s adherence to the mandated changes.
However, major questions linger over the depth of cultural issues at Activision Blizzard and sufficiency of the reforms. Continuing controversies and reports of misconduct may emerge, even as the publisher tries moving past the lawsuit saga.
For gender discrimination and sexual harassment in gaming at large, advocates say there is still much work to be done to improve conditions and protections for female employees. The Activision case has prompted vows from some studios to address systemic inequity, indicative of slowly shifting attitudes.
In the wake of the settlement, Activision Blizzard now faces repairing reputational damage and restoring player trust after years of disturbingly toxic revelations. With its planned sale to tech giant Microsoft imminent, the company also stands at an inflection point to potentially chart a new course.
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