California drops Activision harassment lawsuit in $54 million settlement

California drops Activision harassment lawsuit in $54 million settlement

More than two years after a California state agency accused video game maker Activision Blizzard of fostering a work culture based on sexual harassment and discrimination against female employees, the agency has withdrawn Friday his allegations as part of a settlement with the company.

As part of the settlement, Activision agreed to set aside up to $47 million to address accusations of pay disparity and discrimination in promotions of female employees. In total, the company agreed to pay approximately $54 million as a settlement.

In the agreement, the California Department of Civil Rights and Activision Blizzard said “no court or independent investigation has substantiated any allegations” of “systemic or widespread sexual harassment at Activision Blizzard.” The settlement also states that an investigation found no evidence of wrongdoing by Activision’s board of directors, its executives or its chief executive, Robert Kotick.

The ruling ends a long-running dispute between the state of California and Activision, which makes video games like Call of Duty, Guitar Hero and World of Warcraft. The company has repeatedly said accusations about its corporate culture are false.

The case — and the pall it created over the company when it was filed in 2021 — was a factor that led Microsoft to seek to buy Activision because its stock was in bankruptcy. Microsoft completed the blockbuster $69 billion deal for Activision this year.

The initial complaint from the California Department of Civil Rights, then called the California Department of Fair Employment and Housing, claimed that the state had conducted an investigation into Activision and concluded that the company “favored a location “sisterhood-type workplace” and that female employees were “subject to constant sexual harassment.”

At the time, Activision said the complaint contained “distorted and, in many cases, false descriptions” and constituted “irresponsible behavior by irresponsible state bureaucrats.”

The settlement agreement is subject to court approval and is expected to be filed in court early next week.

The agreement, signed by both parties, states that Gilbert Casellas, former chairman of the Equal Employment Opportunity Commission, conducted a study of Activision and concluded that “there was no of generalized harassment nor of a tendency or recurrent practice of sexist harassment” in the company.

Activision has agreed to set aside up to $47 million to pay women who were employees or contract workers at the company from 2015 to 2020 and who said they received unfair pay.

One of the Californian agency’s expert witnesses declared that by taking into account the seniority of the positions held by women in the company, he had not noticed a salary disparity. He said there was a disparity when employees’ rank was not taken into account.

Activision also agreed to hire an external consultant to evaluate compensation, promotion policies and training materials as part of the settlement.

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David B.Otero

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