Activision Blizzard and the Sexual Harassment and Discrimination Lawsuit

Just because a company is a pioneer in the digital world does not mean it stays ahead of today’s legal requirements in the workplace to protect employees from sexual harassment and discrimination

Take, for example, gaming and entertainment dynasty Activision Blizzard, which recently settled for an $18 million lawsuit in favor of its employee claimants because of such allegations.

We will break down the steps leading up to this monumental case, including those that should and should not have been made by Activision Blizzard to create this hostile work environment – and why other organizations should take note. 

Who Is Activision Blizzard?

Founded in 2008 and headquartered in Santa Monica, California, Activision Blizzard is the result of the merger of Activision and Vivendi Games. The interactive gaming and entertainment company has created video games, such as Candy Crush, Call of Duty, World of Warcraft, Overwatch, Guitar Hero, Hearthstone, and Diablo. 

As of March 2018, based on revenue and market capital, Activision Blizzard was the largest game company in the United States and Europe. However, the mogul was not immune to controversies that have been exposed along the way, including accusations of infringed patents and unpaid royalties, as well as sexual harassment and employee discrimination. 

In January 2022, Microsoft announced its plan to acquire Activation Blizzard for $68.7 billion – the game industry’s biggest. If the deal goes through, the company will become a division of Microsoft Gaming. 

What Were the Allegations Against Activision Blizzard?

In late July 2021, Activision Blizzard was sued by the California Department of Fair Employment and Housing (DFEH) for sexual harassment and employee discrimination. The DFEH and the United States Equal Employment Opportunity Commission (EEOC) both received anonymous tips on the allegations in 2018, sparking a collaborative investigation. 

The 2021 lawsuit accuses Activision of failing to rectify sexual harassment complaints, as well as discrimination against women in pay increases and promotions and discrimination against pregnant women. In fact, the company was accused of retaliating against those employees who complained. 

Led by an employee referred to as “Jane Doe,” who has worked at Activision since 2016 as a senior administrative assistant in the IT department, the case accuses the company of encouraging a frat boy-like work environment, including a pressure to excessively drink alcohol and play crass games – even by supervisors. She says female employees were regularly on the receiving end of sexual comments and groping by male co-workers. 

Doe was warned not to file a complaint to HR but expressed her concerns to the former president. As a result, after applying to several job openings in another department, she says she was offered a lower status role that paid drastically less. 

This lawsuit triggered a snowball downfall, which included an investigation by the U.S. Securities and Exchange Commission, 700 additional reported incidents, workplace walkouts, firings or resignations, and the loss of many company event sponsors. 

How Was the Activision Case Settled?

As of March 2022, the U.S. District Judge approved an $18 million settlement in the sexual harassment lawsuit for all eligible claimants who began working at the company on September 1, 2016. It is the second-largest sexual harassment settlement negotiated by the EEOC. Activision, however, recorded $2.16 billion in revenue in the fourth quarter of 2021 and a total of $8.8 billion for the year. 

As per the lawsuit agreement, the settlement will also go toward the following:

  • Sexual harassment and discrimination prevention programs to be put in place at Activision, as audited by the EEOC.
  • Any remaining funds to be given to charities that support women in the gaming industry or spread awareness of gender equality and sexism in workplace issues. The company will be legally required to deposit the funds within 30 days of the settlement.  

In addition to the settlement, Activision is required to:

  • Expand its mental health counseling services
  • Add personnel evaluations that employees can give to their corresponding supervisors
  • Bring on board an independent equal employment opportunity expert who will report to the EEOC
  • Host mandatory sexual harassment trainings for three years

If Activision does not uphold its end of the agreement, the EEOC has the right to seek additional financial relief. If Microsoft does indeed close the buyout deal, Activision president Bobby Kotick is expected to leave. 

What are the Sexual Harassment and Discrimination Laws in California?

According to the National Conference of State Legislatures and the fair employment laws of California, there are two types of unlawful sexual harassment at the workplace: 

  1. Quid pro quo, when a job or promotion is given based on an employee (or job applicant) submitting to sexual advances.
  2. Hostile work environment, when unwelcome sexual comments or actions make it impossible for an employee to conduct his or her work.

Sexual harassment can be defined as the following:

  • Verbal harassment – derogatory comments or slurs
  • Physical harassment – Touch or blocking  movement
  • Visual harassment – Sexual posters, cartoons, or drawings
  • Sexual advances – Unwanted sexual favors

As of January 1, 2021, employers are required in California to provide both supervisory and nonsupervisory training on sexual harassment once every two years. 

How to Fight Sexual Harassment on the Job in California

Employees in California, regardless of gender, can be affected by sexual harassment, a form of discrimination, in his or her work environment. Normally, the abuse is conducted by a superior to a subordinate, but it can be found at any level of employment, and it must be stopped before serious harm – both physically or mentally – is beyond control. 

Further forms of discrimination can be unlawful compensation severance agreements, non-compete disclosure agreements, or wrongful termination of pregnant employees.

Our team of legal experts at Sacramento-based Perkins Asbill has guided hundreds of clients toward the sound answers and personal advice they needed when facing the possibility of a sexual harassment case. It can be terrifying for those who feel they have been victims of discrimination – especially when they have to face co-workers they saw every day or a supervisor they trusted. Simply call us today. We fight for the justice our clients deserve.