Activision Blizzard to settle CA unequal pay case for $56M

Edited at 7:45pm PT — The original version of this article incorrectly stated the settlement was related to sexual harassment, not unequal employment practices on the basis of sex. We have updated the article to reflect this information and we regret the error.

Activision Blizzard has reportedly entered into an agreement with the California Civil Rights Department to settle its 2021 case alleging sex discrimination in its employment practices.

Next week, the California CRD will file an amended claim withdrawing all allegations of systemic harassment-related according to reports from the Wall Street Journal and documentation viewed by VentureBeat. This settlement will resolve the amended claim that focuses solely on claims of unequal compensation and promotion practices on the basis of sex from 2015-2020. 

Notably, the agreement goes further than simply withdrawing these allegations. Through the agreement, the California CRD agrees that “no court or any independent investigation has substantiated any allegations” about “systemic or widespread sexual harassment at Activision Blizzard,” nor “that Activision Blizzard senior executives ignored, condoned or tolerated a culture of systemic, harassment, retaliation or discrimination.” Additionally, the settlement also said that its investigation found no evidence of wrongdoing by Robert Kotick, CEO of Activision Blizzard, or its board.

The state’s expert witnesses testified that a gender pay gap existed overall, but a pay disparity was not found among employees of the same rank. This data aligns with the company’s Pay Equity Review for 2020 and its 2023 Transparency Report. The amended claim and settlement agreement will be filed in court early next week.

Per the agreement, Activision Blizzard’s maximum settlement will total nearly $56 million. The publisher will aside as much as $46.75 million to pay women employees who said they had received inequitable pay from 2015-2020. An additional $9.125 million was awarded to cover attorney’s fees.

Activision Blizzard has maintained its innocence both in regards to unequal pay and allegations of sexual harassment. The company reportedly fired 37 employees in the months that followed these allegations to address “isolated instances” of workplace misconduct. Additionally, the company settled its Federal EEOC complaint in March 2022 for $18 million.

Earlier this year, Microsoft passed key regulatory hurdles in the U.S. and U.K. acquired Activision Blizzard in October. This deal was partially a result of the allegations of sexual harassment and discrimination because the publisher’s stock price fell in response.

Riot Games faced a similar lawsuit from the California Civil Rights Department. The case settled for $100 million earlier this year. Of the sum, 80% went to over 1,500 women who worked with the company between 2014 and 2021.

At 8pm PT Activision Blizzard provided a statement regarding the settlement included in full below.

We are gratified that we have reached an agreement with the California Civil Rights Department (CRD) today, as the CRD has now announced in a press statement. 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. We want our employees to know that, as the agreement specifies, we are committed to ensuring fair compensation and promotion policies and practices for all our employees, and we will continue our efforts regarding inclusion of qualified candidates from underrepresented communities in outreach, recruitment, and retention.

We are also gratified that the CRD has agreed to file an amended complaint that entirely withdraws its 2021 claims alleging widespread and systemic workplace harassment at Activision Blizzard. As the CRD acknowledged explicitly in the agreement, “CRD is filing along with a Proposed Consent Decree a Second Amended Complaint that withdraws, among other allegations and causes of action, the Fifth Cause of Action – “Employment Discrimination – Because of Sex – Harassment.” As the CRD also expressly acknowledged in the agreement, “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard.” In addition, the CRD has acknowledged that no court or independent investigation substantiated any allegations that “Activision Blizzard’s Board of Directors, including its Chief Executive Officer, Robert Kotick, acted improperly with regard to the handling of any instances of workplace misconduct.”