Activision Blizzard will pay $54 million to resolve allegations that it maintained a workplace in which women were subject to harassment and discrimination, the California Civil Rights Department announced Friday.
The agreement comes after more than two years of litigation between the video game publisher and regulators. California’s Department of Fair Employment and Housing sued Activision Blizzard in 2021, alleging that the company maintained a “pervasive ‘frat boy’ workplace culture” in which women were subjected to harassment, discrimination and retaliation.
California’s suit followed a two-year investigation into the company. Employees staged a walkout in the weeks following the suit while federal regulators launched their own investigations. A federal appeals court approved an $18 million settlement between Activision Blizzard and the U.S. Equal Employment Opportunity Commission in 2022.
In a press release, California’s Civil Rights Division said approximately $45.7 million of the total settlement amount will go to a fund dedicated to compensating workers. Women who worked at the company in California between Oct. 12, 2015, and Dec. 31, 2020, may be eligible to receive compensation. The settlement is pending court approval.
Other terms of the agreement stipulate that Activision Blizzard will distribute excess settlement funds to charitable organizations focused on advancing women in the video game and technology industries or promoting awareness around workplace gender equality issues, the agency said. The company also must retain an independent consultant to evaluate its pay and promotion policies and training materials.
“California remains deeply committed to promoting and enforcing the civil rights of women in the workplace,” Kevin Kish, director of the Civil Rights Department, said in the press release. “If approved by the court, this settlement agreement represents a major step forward and will bring direct relief to Activision Blizzard workers.”
Activision Blizzard did not immediately respond to an HR Dive request for comment.
It has been a lengthy two years for the company since the 2021 suit, which resulted in a reorganization of an HR department that faced heavy criticism. State regulators alleged that the function was “not held in high regard” and lacked employee trust, while complaints of harassment were “treated in a perfunctory and dismissive manner.”
Among other steps, Activision Blizzard shuffled its leadership ranks, appointing Disney veteran Julie Hodges as its chief people officer among other changes. However, the company kept CEO Bobby Kotick, who is alleged to have known about sexual misconduct claims years prior to the 2021 suit. In May, Variety reported that Kotick denied that Activision Blizzard had systemic harassment issues.
Microsoft finalized a buy-out of Activision Blizzard in October. Prior to the deal, Activision Blizzard took steps such as eliminating mandatory arbitration agreements for employees who file sexual harassment or discrimination claims. In March, the company published a diversity, equity and inclusion update in which it disclosed representation data as well as changes to how it gathers and reports that data.