Activision Blizzard Says "People Will Be Held Accountable" In Wake Of Harassment Lawsuit

The state of California lawsuit alleging a "frat boy" culture of sexual harassment at Activision Blizzard was a key topic during the company's second quarter earnings call.

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Activision Blizzard's second quarter earnings call began with CEO Bobby Kotick addressing the elephant in the room: what the company is doing in light of a recent state of California lawsuit that alleges the company is rife with harassment and discrimination directed at women employees.

At the top of the call, Kotick issued the following statement addressing the lawsuit.

"I want to start by making clear to everyone that there is no place at our company where discrimination, harassment, or unequal treatment of any kind will be tolerated--nowhere," Kotick said. "We so appreciate the current and former employees who have come forward in past and recent days with courage, and I want to reiterate the commitments we have made to you. Our work environment, everywhere we operate, will not permit discrimination, harassment, or unequal treatment. We will be the company that sets the example for this in our industry."

He emphasized the company would be investigating every claim and complaint, and would take "decisive action."

"People will be held accountable for their actions," he said. "That commitment means that we will not just terminate employees where appropriate, but we'll also terminate any manager or leader found to have impeded the integrity of our processes for evaluating claims and imposing appropriate consequences."

Kotick also pointed towards a company commitment to diversity in hiring, saying more resources would be allocated to emphasize it, as well as taking steps to ensure Activision Blizzard employees are paid "competently and fairly for equal or substantially similar work."

But the lawsuit and what Activision Blizzard was doing in light of its allegations was a recurring theme throughout the earnings call's prepared remarks and Q&A, with questions in regard to company morale and how the lawsuit may affect game production asked alongside questions about Call of Duty and yearly revenues. Activision Blizzard chief operating officer Daniel Alegre echoed Kotick's commitment to diversity during the Q&A portion of the call, telling investors "our employees are truly our greatest asset, and we remain absolutely focused as a leadership team on providing a diverse and safe environment for our teams, and have taken a number of actions thus far."

An earnings call press release includes a section titled "Commitment to a Safe Working Environment" and states the company is taking "swift action to ensure a swift and welcoming work environment for all employees."

Along with creating safe spaces moderated by third parties where employees can voice their concerns, that "swift action" will also include the hiring of a law firm, WilmerHale, to conduct a review of the company's policies and procedures "to ensure that we have and maintain best practices to promote a respectful and inclusive workplace."

WilmerHale has been heavily criticized by a group of Activision Blizzard employees who organized an open letter decrying the company's response to the lawsuit. The group, calling itself the ABK Workers Alliance, says the fact that WilmerHale has a history of "discouraging workers' rights and collective action," as well as having "pre-existing relationships with Activision Blizzard and its executives," means the company should be seeking a different firm to review its policies.

The earnings call press release states that "managers and leaders across the company will be evaluated in respect to compliance with the company's processes for evaluating claims and imposing appropriate consequences." It was announced today that Activision Blizzard president J. Allen Brack would be leaving the company, as would Blizzard's head of human resources Jesse Meschuk. Brack will be replaced by two co-leaders in Jen Oneal and Mike Ybarra.

Blizzard employees were in an uproar last year as they shared and compared pay data that revealed pay increases were significantly less than many expected, despite Activision Blizzard's record profits. Earlier this year, Vice reported Activision Blizzard was looking to get out of a rule that would require the company to interview and consider diverse candidates including qualified women and minority candidates, with lawyers for the company calling the diversity requirement "an unworkable encroachment on the Company's ability to run its business."

The ABK Workers Alliance say their demands have yet to be directly addressed by the company. Those demands include an end to forced arbitration in employment agreements, adoption of inclusive recruitment and hiring practices, increases in pay transparency through compensation metrics, and an audit of Activision Blizzard policies and practices by a neutral third-party selected by an employee-led Diversity, Equity, and Inclusion task force.

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