California’s Civil Rights Department (CRD) has announced that it has reached a settlement agreement with Activision Blizzard for a case it filed in 2021, accusing the company of systemic gender discrimination and fostering a culture that encouraged rampant misogyny and sexual harassment. The agency, which sued the developer when it was still called the California Department of Fair Employment and Housing, said Activision Blizzard will have to pay $54 million to settle its allegations. Out of the total, $45.75 million will go towards a fund meant to compensate female employees and contract workers who worked for the company in California from October 12, 2015 until December 31, 2020.
In addition, the developer is expected to retain an independent consultant to evaluate its promotion policies and training materials, as well as to make recommendations based on what they see. If you’ll recall, the agency’s lawsuit alleged that female employees were overlooked for promotions and were paid less than their male colleagues. According to Marketwatch, though, the settlement will also see the agency withdraw its claims that there was widespread sexual harassment at the company. The department will reportedly have to file an amended complaint that only focuses on gender-based pay gap and discrimination.
California’s original lawsuit detailed how Activision Blizzard condoned a “frat boy” culture that encouraged certain unsavory behaviors. Male employees allegedly did “cube crawls,” wherein they routinely groped and sexually harassed their female colleagues at their desks. A spokesperson for the company told Marketwatch that it is “gratified that the CRD has agreed to file an amended complaint that entirely withdraws its 2021 claims alleging widespread and systemic workplace harassment at Activision Blizzard.” They added: “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 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.”
Meanwhile, the department told the website that its announcement, which contains no reference to its earlier sexual harassment allegations, “largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices.”
As The Wall Street Journal noted when it reported the settlement, this lawsuit set the stage for Microsoft to acquire the developer. After reports came out that Activision Blizzard CEO Bobby Kotick kept sexual harassment allegations within the company from reaching its board of directors, the developer’s shares fell, giving Microsoft the opening to offer a deal. The $68.7 billion acquisition was finalized in October after almost two years of contending with regulators trying to block the purchase.
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