Video game publisher Activision Blizzard pays nearly $55 million in pay inequality settlement

[Note: An earlier version of this story incorrectly stated that the Activision Blizzard settlement was related to sexual harassment allegations. A spokesperson for the company has now confirmed that those allegations have been dropped and that the settlement was related to pay inequality. We regret the error, and an updated version of the story is below.]

More than two years ago, gigantic video game publisher Activision Blizzard (the company behind Call Of Duty and Diablo, among many other things) was hit with a big lawsuit from California’s Department Of Fair Employment And Housing that accused the company of having a “frat boy culture” that involved regular discrimination and sexual harassment toward female employees. Now, California’s Civil Rights Department has decided to withdraw all of its allegations about harassment, and Activision Blizzard has agreed to pay out about $55 million in a settlement related to pay inequality at the company—about $45 million of which will go into a fund to compensate workers.

This comes from a statement from Activision Blizzard (which you can see more of below), which noted that the CRD confirmed that “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard” and that the company’s leadership was not found to have “acted improperly with regard to handling instances of workplace misconduct.”

In addition to the fund for repaying employees, Activision Blizzard has agreed to use any excess funds from the settlement to support “charitable organizations focused on advancing women in the video game and technology industries” or for “promoting awareness around gender equality issues in the workplace.”

The initial lawsuit, which came after a multi-year investigation, claimed that Activision Blizzard had a history of failing to promote women and of discriminating against them at every level of the company, with high level positions almost exclusively held by white men. The suit also claimed that women were being consistently hired at lower positions, with lower salaries, and with fewer opportunities to be promoted. Female employees were also reportedly subjected to “cube crawls,” where male employees would drink alcohol and move from cubicle to cubicle and engage in “inappropriate behavior toward female employees.”

After the lawsuit came out, Blizzard president J. Allen Brack stepped down from the company and multiple walkouts were held in protest of leadership’s response to the reports about the toxic workplace—with one walkout coinciding with a campaign to oust CEO Bobby Kotick (one of the highest-paid executives in the whole industry), who had been accusing of not doing enough about the workplace culture even after a former employee claimed she was raped by a supervisor. According to this new information, though, all of that has been cleared up and the allegations have been dropped, with the statement from Activision Blizzard noting that the company “has resolved all open regulatory investigations or complaints relating to employee workplace conduct.”

This settlement comes almost exactly two months after Microsoft’s attempt to purchase Activision Blizzard finally went through, and while we have absolutely no way of knowing if the timing is a coincidence, it does seem good for Microsoft that has all been taken care of before the new year.

A full statement from an Activision Blizzard spokesperson is 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.”