The California Civil Rights Department (CRD) announced it has reached a $54 million settlement agreement to resolve allegations that gaming company Activision Blizzard discriminated against women at the company. Headquartered in Santa Monica, California, Activision Blizzard is known for many popular video game franchises, including “Call of Duty,” “World of Warcraft, “Guitar Hero,” and “Diablo.”
Under the agreement, which is subject to court approval, Activision Blizzard will take additional steps to help ensure fair pay and promotion practices at the company and provide monetary relief to women who were employees or contract workers in California between October 12, 2015 and December 31, 2020.
According to an investigation conducted by the CRD, Activision Blizzard discriminated against women during that time period, including by denying promotion opportunities and paying them less than men for doing substantially similar work.
“California remains deeply committed to promoting and enforcing the civil rights of women in the workplace,” said CRD Director Kevin Kish. “If approved by the court, this settlement agreement represents a major step forward and will bring direct relief to Activision Blizzard workers. At the California Civil Rights Department, we will continue to do our part to fight for the rights of our state’s residents.”
Violations of California’s Equal Pay and Fair Employment Acts
After more than two years of investigation, CRD filed a lawsuit against Activision Blizzard in 2021 for alleged violations of California’s Equal Pay Act and Fair Employment and Housing Act — civil rights laws intended to protect Californians against discrimination. In the lawsuit filed before the Los Angeles County Superior Court, the department sought relief on behalf of the State of California and a class of women employees and contract workers who allegedly experienced discrimination in compensation, promotions, and other aspects of Activision Blizzard’s workplace.
The settlement is in addition to measures Activision Blizzard has implemented through a separate 2021 consent decree with the U.S. Equal Employment Opportunity Commission and other proactive recruitment and retention steps as described in the company’s 2022 Environmental, Social, and Governance Report.
Consent Decree Details
If approved by the court, the settlement agreement will require Activision Blizzard to:
- Pay approximately $54,875,000 to cover direct relief to workers and litigation costs. Of the total, approximately $45,750,000 will go to a settlement fund dedicated to compensating workers.
- Distribute any excess settlement funds to charitable organizations focused on advancing women in the video game and technology industries or promoting awareness around gender equality issues in the workplace.
- Retain an independent consultant to evaluate and make recommendations regarding Activision Blizzard’s compensation and promotion policies and training materials.
- Continue its efforts regarding inclusion of qualified candidates from underrepresented communities in outreach, recruitment, and retention.
Past Compliance Problems
The settlement is not the first big compliance failure for Activision Blizzard. In February, the company agreed to a cease-and-desist order and to pay a $35 million penalty in a settlement with the Securities and Exchange Commission resulting from disclosure control failures and violations of the SEC whistleblower protection rule.
According to a complaint filed by the SEC, between 2018 and 2021 Activision Blizzard “lacked controls and procedures designed to ensure that information related to employee complaints of workplace misconduct would be communicated to Activision Blizzard’s disclosure personnel to allow for timely assessment on its disclosures.”
In September 2021, it reached an $18 million settlement with the Equal Employment Opportunity Commission (EEOC) to resolve allegations that its employees faced “severe or pervasive” sexual harassment, and that Activision Blizzard “failed to take corrective and preventative measures” upon receiving reports of sexual harassment, according to the EEOC’s initial complaint. 
Joseph McCafferty is editor and publisher of Compliance Chief 360°