From left, Brian Grazer, founder of Imagine Entertainment, and Bobby Kotick, chief executive officer of Activision Blizzard, arrive at the annual Allen & Company Sun Valley Conference on July 9, 2019, in Sun Valley, Idaho.
Drew Angerer | Getty Images
A federal judge has approved video game publisher Activision Blizzard’s settlement with the U.S. Equal Employment Opportunity Commission after the government agency found evidence of sexual harassment, pregnancy discrimination and related retaliation at the company.
The settlement could help reduce risk as Microsoft prepares to acquire Activision Blizzard for $68.7 billion in what’s expected to be the largest U.S. technology transaction to date.
Activision Blizzard first announced a settlement with the EEOC in September. Two months earlier, California’s Department of Fair Employment and Housing had filed suit against Activision, saying it underpaid women and had a “frat boy culture” that’s a “breeding ground for harassment and discrimination against women,”
Judge Dale Fischer, of the U.S. District Court for California’s Central District, signed off on the EEOC consent decree late Tuesday. Fischer had denied the California agency’s motion to intervene in the EEOC’s case. The California agency appealed to the U.S. Court of Appeals for the Ninth Circuit, which on Monday struck down the agency’s emergency stay motion in the EEOC case.
No one is automatically entered into the claim. People can apply for claims of sexual harassment, pregnancy discrimination or related retaliation they experienced from September 2016 to the present, Anna Park, the regional attorney for the EEOC’s Los Angeles district office, said during a media briefing on Wednesday. People can wait for the California agency’s case, which would only apply in California, to play out or file individual cases if they wish, Park said.
Park said that anyone who feels the fund isn’t large enough should consider that Fischer, the judge, ruled that the provisions of the consent decree are adequate.
Three female claimants who declined to provide their names for fear of retaliation against friends or family members described their alleged experiences at the company during Wednesday’s briefing.
One woman claimed a male employee asked if she was interested in a relationship with him and his wife after he saw the woman’s profile on a dating app. She said she reported the incident to human resources but didn’t receive a response.
Another woman claimed she reported sexual harassment that one of her direct reports had experienced to human resources. She said she received a link to watch a training video about her managerial duty to report incidents to human resources. The company put her on a performance improvement plan, her manager repeatedly lectured her about her attitude, and she later lost her job, she claimed.
A third woman claimed she was sexually harassed by two of her managers and knew colleagues who had received unsolicited nude pictures from a male senior manager. She said she sent reports to human resources and senior leaders but didn’t receive a response. She said she experienced physical health issues caused by stress, which required surgery, and that she had no choice but to leave her job.
In a statement on Tuesday, Activision Blizzard reiterated the commitments in its EEOC settlement. It agreed to form an $18 million fund to compensate claimants and allocate any remaining money to certain nonprofit organizations focused on the advancement of women in video games and technology, or to awareness of sexual harassment and gender equality.
The company also said it would update its performance review system with an emphasis on equal opportunity. It said it will hire an equal employment opportunity coordinator and hire a consultant to track compliance.
“We apologize to any victims who suffered as a result of conduct that did not live up to our values,” an Activision Blizzard spokesperson told CNBC.
Activision Blizzard said it has already quadrupled the size of its ethics and compliance team, waived mandatory arbitration for sexual harassment and discrimination claims for incidents that happened after Oct. 28, 2021, strengthened alcohol policies and instituted a zero-tolerance policy on harassment and discrimination.
The EEOC can file a motion in court if the company doesn’t comply. Park said possible outcomes include an extension of the current three-year decree term and penalties.
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