Activision Blizzard Reaches Agreement in Discrimination Lawsuit

Martin

December 21, 2023

In a significant development, Activision Blizzard, now under Microsoft’s ownership, has reached an agreement to settle a discrimination case filed by California’s Civil Rights Department. The case alleged that the gaming giant engaged in discriminatory practices against women, including the denial of promotion opportunities and unequal pay compared to their male counterparts. As part of the proposed settlement, Activision Blizzard will pay nearly $55 million to provide relief to affected female employees and contractors spanning the period from October 2015 to December 2020, along with covering legal fees.

This resolution follows a previous settlement in which Activision Blizzard agreed to an $18 million fund for victims in response to sexual harassment, pregnancy discrimination, and retaliation allegations brought forward by the U.S. Equal Employment Opportunity Commission.

Microsoft’s $69 Billion Acquisition and Subsequent Challenges

Microsoft’s acquisition of Activision Blizzard for $69 billion, completed in October, marked a significant milestone in the gaming industry. Additionally, the settlement comes amidst a backdrop of regulatory scrutiny. Moreover, the Federal Trade Commission, in a recent San Francisco appellate court hearing, argued against the completion of the deal. Furthermore, they contended that a federal judge had erred in dismissing the regulatory agency’s attempt to halt the transaction. Despite these challenges, the deal moved forward. Again, it faced scrutiny from U.S. and European regulators.

Activision’s Ongoing Struggles

The settlement with California’s Civil Rights Department follows a tumultuous period for Activision Blizzard. In 2021, the company faced a lawsuit from the Department of Fair Employment and Housing, alleging sexual harassment, discrimination, and retaliation. Subsequent reports suggested that CEO Bobby Kotick was aware of misconduct allegations within the company but did not disclose all relevant information to the board. This led to a decline in share value, and Microsoft, the gaming industry giant, initiated talks to acquire Activision Blizzard, ultimately finalizing the deal in October.

Terms of the Settlement and Future Commitments

For Activision Blizzard, the settlement not only involves a substantial financial commitment but also includes provisions for the company’s future conduct. The agreement mandates ongoing efforts to promote the inclusion of underrepresented individuals in recruitment processes. Additionally, unless compensation is non-negotiable, the company must inform job applicants in writing at the beginning of hiring and promotion processes that they have the option to negotiate their pay.

The settlement is subject to approval by the Los Angeles County Superior Court.

Activision Blizzard’s statement to CNBC acknowledges the gravity of the issues addressed in the agreement and expresses dedication to fully implementing the new obligations assumed as part of the settlement.

Summary

Activision Blizzard, now part of Microsoft, has agreed to a $55 million settlement in a discrimination case brought by California’s Civil Rights Department. The case alleged gender-based discrimination, including denial of promotions and unequal pay for women. This follows a previous settlement with the U.S. Equal Employment Opportunity Commission. Additionally, the agreement comes amid Microsoft’s $69 billion acquisition of Activision Blizzard, which faced regulatory challenges. Moreover, the settlement includes financial relief for affected individuals and commitments from Activision Blizzard to foster inclusion in recruitment and transparency in compensation negotiations.