Activision Blizzard to pay $54 million to settle California state workplace discrimination claims

LOS ANGELES (AP) — Activision Blizzard has agreed to pay about $54 million to settle discrimination claims brought by California's civil rights agency on behalf of women employed by the video game maker.

The settlement, which is subject to court approval, resolves allegations that the maker of Call of Duty, Overwatch, World of Warcraft and other video games “discriminated against women at the company, including denying promotion opportunities and paying them less than men for doing substantially similar work,” the California Civil Rights Department announced late Friday.

Allegations of workplace discrimination helped drag down Activision’s stock price in 2021, paving the way for Microsoft's eventual takeover bid in January 2022. The software giant, which owns the Xbox gaming system, closed its $69 billion deal to buy Activision in October after fending off global opposition from antitrust regulators and rivals.

California's civil rights agency sued Santa Monica-based Activision Blizzard in July 2021, alleging that female employees faced constant sexual harassment, that few women were named to leadership roles and that when they were, they earned less salary, incentive pay and total compensation than male peers.

Employees spoke up about harassment and discrimination, signing petitions criticizing the company for its defensive reaction to the lawsuit and staging a walkout.

Under the terms of the settlement, women who worked for the company between Oct. 12, 2015, and Dec. 31, 2020, either as hires or independent contractors, may be eligible for compensation. About $45.75 million of the settlement amount has been set aside for such payouts, the state agency said.

Activision Blizzard also agreed to take steps to ensure “fair pay and promotion practices” at the company.

“We appreciate the importance of the issues addressed in this agreement and we are dedicated to fully implementing all the new obligations we have assumed as part of it,” Activision Blizzard said in a statement Saturday.

The company also noted that the California Civil Rights Department agreed to file an amended complaint that withdraws sexual harassment allegations.

The settlement agreement declares that “no court or any independent investigation has substantiated any allegations” of systemic or widespread sexual harassment at Activision Blizzard, nor claims that the company's board of directors and CEO acted improperly or ignored or tolerated a culture of harassment, retaliation or discrimination.

In September 2021, Activision settled sexual harassment and discrimination claims brought by the U.S. Equal Employment Opportunity Commission, agreeing to create an $18 million fund to compensate people who were harassed or discriminated against.

And earlier this year, the company agreed to pay $35 million to settle Securities and Exchange Commission charges that it failed to maintain controls to collect and assess workplace complaints with regard to disclosure requirements and violated a federal whistleblower protection rule. In paying the settlement, Activision neither admitted nor denied the SEC’s findings and agreed to a cease-and-desist order.