From left, Brian Grazer, founder of Imagine Entertainment, and Bobby Kotick, chief executive officer of Activision Blizzard, arrive at the annual Allen & Company Sun Valley Conference July 9, 2019 in Sun Valley, Idaho.
Drew Angerer | Getty Images
A federal judge has approved video game publisher Activision Blizzard’s settlement with the US Equal Opportunity Commission after the government agency found evidence of sexual harassment, pregnancy discrimination and related retaliation at the company.
The settlement could help reduce risk as Microsoft prepares to acquire Activision Blizzard for $68.7 billion in what is expected to be the largest U.S. tech deal to date.
Activision Blizzard first announced an agreement with the EEOC in September. Two months earlier, the California Department of Equal Employment and Housing filed a lawsuit against Activision, saying it underpays women and has a “brotherhood culture” that is a “breeding ground for harassment and discrimination against women.”
Judge Dale Fischer of the U.S. District Court for the California Central District signed the EEOC consent decree late Tuesday. Fischer had rejected the California authorities’ request to intervene in the EEOC’s case. The California agency appealed to the US Circuit Court of Appeals for the 9th Circuit, which on Monday denied the agency’s emergency stay request in the EEOC case.
No one is automatically included in the claim. People can make claims for sexual harassment, pregnancy discrimination or related retaliation they experienced from September 2016 to the present, Anna Park, regional attorney for EEOC’s Los Angeles district office, said during a media briefing on Wednesday. People can wait for the California agency’s case, which would only apply in California, to run or file individual cases if they choose, she said.
Park said anyone who thinks the fund isn’t big enough should consider that Judge Fischer ruled that the provisions of the consent decree are reasonable.
Three female plaintiffs, who refused to provide their names for fear of retaliation from friends or family members, described their alleged experiences at the company during Wednesday’s briefing.
One woman claimed a male employee asked her if she was interested in a relationship with him and his wife after seeing the woman’s profile on a dating app. She said she reported the incident to human resources but received no response.
Another woman claimed that she had reported sexual harassment to Human Resources by one of her direct employees. She said she received a link to watch a training video about her leadership duty to report incidents to Human Resources. The company put her on a performance improvement plan, her manager repeatedly lectured her about her hiring, and she later lost her job, she claimed.
A third woman claimed that she had been sexually harassed by two of her bosses and knew colleagues who had received unsolicited nude photos from a male boss. She said she sent reports to HR and senior management but received no response. She said that she had physical health problems caused by stress that required surgery and that she had no choice but to quit her job.
In a statement Tuesday, Activision Blizzard reiterated commitments in its EEOC settlement. It was agreed to set up an $18 million fund to compensate claimants and allocate the remaining money to specific charities focused on the advancement of women in video games and technology, or sexual harassment awareness and gender equality.
The company also said it will update its performance appraisal system with an emphasis on equal opportunity. It said it would hire an equal opportunity coordinator and consultant to track compliance.
“We apologize to all victims who suffered from behavior that is not consistent with our values,” an Activision Blizzard spokesperson told CNBC.
Activision Blizzard said it has already quadrupled the size of its ethics and compliance team, waived mandatory arbitration for claims of sexual harassment and discrimination for incidents after October 28, 2021, strengthened alcohol policies, and adopted a zero-tolerance policy in Discrimination introduced in terms of harassment and harassment.
The EEOC can take legal action in court if the company fails to do so. Park said possible outcomes include an extension of the decree’s current three-year term and penalties.
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