Activision Blizzard Will Pay $54 Million To California After Settling Lawsuit

Activision Blizzard has settled its 2021 lawsuit with the state of California, and will pay $54 million to the state along with an additional $47 million to female employees who worked at the company from 2015 to 2020.

The 2021 lawsuit, filed by the state agency then known as the California Department of Fair Employment and Housing and now known as the California Civil Rights Department, accused Activision Blizzard of fostering a "frat boy" workplace culture rife with sexual harassment. Now, via The New York Times, Activision Blizzard and the California Civil Rights Department say in the settlement agreement that investigations into the company's culture did not turn up evidence of "systemic or widespread sexual harassment."

An investigation into Activision's board, including the company's CEO, Bobby Kotick, found no evidence of wrongdoing, according to the settlement agreement. A report by The Wall Street Journal in 2021 alleged Kotick hid knowledge of misconduct at the company. The report alleged he had made a death threat to a female assistant in 2006 and had personally intervened in a separate internal sexual harassment investigation at the company. Activision Blizzard had previously argued against the lawsuit, attributing it to "irresponsible behavior from unaccountable state bureaucrats."

In the wake of the lawsuit's allegations, Activision Blizzard announced steps it had taken to create "a more accountable workplace." Those steps included an expansion and restructuring of the company's Employee Relations and Ethics & Compliance teams. It was also announced that more than 20 people involved in "resolved reports" at Activision Blizzard had departed the company, with another 20 or so facing "disciplinary action."

Even Activision Blizzard's games were affected by the lawsuit, as Blizzard in particular sought to distance itself from implicated employees. In World of Warcraft, multiple references to the only Blizzard employee explicitly named in California's lawsuit were removed. Blizzard additionally changed the name of the Overwatch character originally named Jesse McCree, named after a former Blizzard employee who was fired following the California lawsuit.

The lawsuit, in part, led to Microsoft acquiring Activision Blizzard, a deal that was finalized this year. The publisher behind Call of Duty and World of Warcraft saw its stock price significantly fall in the wake of the lawsuit's accusations, leading to Microsoft's $69 billion acquisition.

California's lawsuit led to employee walkouts at Activision Blizzard, the departure of Blizzard's then-president J. Allen Brack, and unionization efforts at multiple studios operating under the Activision Blizzard umbrella. Quality assurance testers at Raven Software and Blizzard Albany (formerly Vicarious Visions) both unionized in the wake of the lawsuit. Another studio acquired by Activision Blizzard in 2022, Proletariat, sought to unionize as well. Its union vote was later dropped, with workers accusing Proletariat CEO Seth Sivak of "making a free and fair election impossible."

Activision Blizzard has settled multiple other cases in recent years. In March 2022, Activision Blizzard settled a separate sexual harassment lawsuit with the Federal Equal Employment Opportunity Commission to the tune of $18 million, and in February 2023 paid $35 million in a settlement to the SEC (U.S. Securities and Exchange Commission) over accusations that the publisher failed to properly disclose information to investors.

According to The New York Times, the 2021 state of California settlement agreement is still subject to court approval and will be filed later this week.