California Files Appeal In Latest Bid To Intervene In Activision Blizzard's $18m Discrimination Lawsuit Settlement

The California Department of Fair Employment and Housing (DFEH) is appealing a judge's ruling that prevented it from intervening in Activision Blizzard’s $18m settlement to end a sex discrimination lawsuit last year.

Activision continues to be under intense scrutiny after California’s DFEH claimed the gaming giant fostered a “frat boy” work culture. In a lawsuit filed in July 2021, the department claimed this toxic workplace led to sex-based discrimination, including harassment against female employees.

The case runs parallel to other probing and litigation. The US National Labor Relations Board is investigating a complaint made by the Communications Workers of America Union, which accused the games maker of intimidating staff and illegally hampering their attempts to form a union. The Securities Exchange Commission is also investigating whether the company failed to report claims of sexual discrimination and harassment to investors before they were aired publicly, causing share prices to drop.

With all these legal challenges pending, Activision was probably glad to settle a previous years-old case filed by the US Equal Employment Opportunity Commission (EEOC) for the financial equivalent of three days of annual profits, promising to pay $18m in settlement fees. The money would go toward compensating any current and former workers who have been employed since 2016 and faced sexual harassment. In return, Activision said it would review its work policies and provide sexual discrimination training for executives and HR staff.

Hang on a minute

But California’s DFEH claimed if the settlement went ahead, this consent decree between Activision and the EEOC could potentially sink its own lawsuit. A judge denied DFEH’s claim [PDF], and said the agency’s concerns were speculative. The DFEH filed a motion of appeal on Friday seeking to overturn that decision. The department ultimately wants to give some input to the settlement, and requests a fairness hearing.

"The interests claimed by DFEH are a general interest in upholding the rights of California citizens and an interest in protecting DFEH’s ability to prosecute its own parallel state court case based on California law," Judge Dale Fischer noted.

"Specifically, DFEH ... argues that the consent decree would release California state law claims and allows, or potentially even requires, defendants to destroy evidence relevant to DFEH’s state court case."

• Activision Blizzard to pay out three days of annual profit to settle sex discrimination case
• Activision Blizzard accused by California watchdog of fostering 'frat boy' culture, fatally toxic atmosphere
• Activision shareholders demand Kotick's head after CEO 'failed' to take claims of staff sex assault seriously
• Blizzard co-leader Jen Oneal leaps into escape pod after just three months in the role

Amid this, the EEOC and Activision this month asked for an “in-camera review” [PDF] in which they can share confidential information privately to a judge about a proposal to amend the settlement's constant decree. The Register has asked Activision for comment.

Senior staff at the games company have resigned amid the ongoing turmoil and PR fallout. Blizzard chief Allen Brack and head of HR Jesse Meschuk called game over, as did Activision’s chief legal officer Claire Hart plus Jen Oneal after just three months into her role as Blizzard co-leader.

Bobby Kotick, however, has been able to hold onto his position as Activision Blizzard CEO, which he has held for more than 30 years. The multimillionaire agreed to slash his salary, and not take any bonuses and extra equity, until his biz reached its goals on stamping out internal discrimination and harassment. ®