Activision Blizzard Takes Steps to Address Workplace Issues with $54M Settlement

California’s Civil Rights Department (CRD) has reached a significant settlement agreement with video game developer Activision Blizzard, concluding a case that was originally filed in 2021. 

The lawsuit accused the company of perpetuating systemic gender discrimination and fostering a culture that encouraged misogyny and sexual harassment. Under the terms of the settlement, Activision Blizzard will pay a total of $54 million to resolve the allegations.

Compensation for female employees

Out of the $54 million settlement, an impressive $45.75 million will be allocated to a fund specifically intended to compensate female employees and contract workers who worked for the company in California between October 12, 2015, and December 31, 2020. 

This compensation aims to rectify gender-based pay disparities and discrimination issues that were raised in the original lawsuit.

As part of the settlement, Activision Blizzard is also required to engage an independent consultant to assess and evaluate its promotion policies and training materials. The consultant will then make recommendations based on their findings. 

This move is aimed at improving the company’s workplace environment and ensuring that promotion and training policies are fair and equitable for all employees.

Withdrawal of sexual harassment claims

One notable aspect of the settlement is the withdrawal of the CRD’s claims related to widespread sexual harassment at Activision Blizzard.

The department will amend its complaint to focus exclusively on gender-based pay disparities and discrimination, effectively closing the chapter on the allegations of rampant sexual harassment at the company.

The original lawsuit brought attention to what was described as a “frat boy” culture at Activision Blizzard, where male employees were alleged to have engaged in inappropriate behaviors.

Among these behaviors was the practice of “cube crawls,” wherein male employees were accused of routinely groping and sexually harassing their female colleagues at their workstations. These revelations sparked widespread outrage and a demand for accountability within the gaming industry.

Company’s response and commitment to change

In response to the settlement, a spokesperson for Activision Blizzard expressed the company’s satisfaction that the CRD has agreed to withdraw its claims of widespread workplace harassment. 

The company also emphasized its commitment to implementing the obligations outlined in the settlement agreement. This includes ensuring fair compensation and promotion policies for all employees, as well as efforts to increase diversity and inclusion in its workforce.

The CRD described the settlement as “historic,” highlighting its value of more than $50 million and its direct impact on women who were affected by the company’s discriminatory practices. 

The settlement signifies a significant step toward addressing issues of gender discrimination in the gaming industry and holds Activision Blizzard accountable for its past actions.

Impact on Microsoft acquisition

The gender discrimination lawsuit against Activision Blizzard played a pivotal role in Microsoft’s acquisition of the company. As reports emerged that Activision Blizzard CEO Bobby Kotick had allegedly concealed sexual harassment allegations within the company, the company’s shares plummeted. 

This decline in stock value created an opportunity for Microsoft to make a $68.7 billion acquisition bid, which was eventually finalized in October. The acquisition marked the culmination of nearly two years of negotiations and regulatory challenges.