Judge likely to approve $18 million Activision Blizzard sexual harassment suit settlement

Activision Blizzard is one step closer to settling one of the multiple lawsuits it faces over sexual harassment and workplace misconduct allegations.

U.S. District Judge Dale Fischer is “prepared to approve” Activision Blizzard’s $18 million settlement with the U.S. Equal Employment Opportunity Commission (EEOC), according to a California court filing published Tuesday.

“The Court is generally satisfied that both the monetary relief and the nonmonetary provisions are fair, reasonable, and adequate,” the filing stated. It called the opposition’s evidence “speculative” at best.

“We are pleased that the Court recognizes our agreement with the Equal Employment Opportunity Commission is fair, adequate and in the public interest,” Activision Blizzard said in a statement to The Washington Post. “Our goal has always been to provide immediate and meaningful compensation to eligible employees who choose to participate and to continue workplace improvements that make Activision Blizzard a model for our industry.”

Activision Blizzard was first sued last July by California’s Department of Fair Employment and Housing, which accused the video game publisher of having a “'frat boy’ workplace culture.” In September, Activision Blizzard agreed to create an $18 million fund for harassment and discrimination victims, following a lawsuit from the EEOC.

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The EEOC, a federal agency, and the DFEH, a state agency, share jurisdiction over workplace sexual harassment cases, and both agencies received anonymous tips in 2018 to investigate Activision Blizzard. The two agencies became embroiled in a disagreement with how much victims should be paid in the settlement, and concerns that if the EEOC were to settle with Activision Blizzard on a federal level, it could bar the DFEH from pursuing further damages at the state court level.

“The DFEH will continue to vigorously prosecute its action against Activision in California state court," DFEH spokesperson Fahizah Alim said in a statement. "In recent weeks, DFEH defeated Activision’s request that the Court dismiss DFEH’s case, and DFEH has sought documents and other evidence of sexual harassment, discrimination and retaliation violations over many years by Activision. The Court has set a trial date in February 2023.”

P. Andrew Torrez, who owns a law firm and hosts the Opening Arguments podcast, which has covered the Activision Blizzard suit, said the judge’s ruling is a victory for Activision Blizzard and could help deflate the lawsuit from the DFEH. Claimants for both the DFEH suit and the EEOC suit could choose to receive compensation from the EEOC settlement, but that would disqualify them from continuing on in the DFEH suit.

“It’s a clear win for Activision Blizzard the company. They lose a small amount and they are effectively undercutting the state law proceedings where the state agency was far more aggressive,” Torrez said, referring to the DFEH suit. Activision recorded $2.16 billion in revenue in the quarter ending in December and a total of $8.8 billion in 2021.

The $18 million settlement with the EEOC would be the second largest sexual harassment settlement the agency has ever negotiated. But to critics of the settlement, including the DFEH, a significant number of Activision Blizzard workers and their ally, media labor union Communications Workers of America (CWA), that sum is insufficient for potentially hundreds or more victims. In a letter addressed to the EEOC on Oct. 6, the CWA called $18 million “woefully inadequate” and said Activision Blizzard employees and the CWA had “grave concerns” over the settlement agreement.

On Tuesday, the court also struck down former Blizzard employee Jessica Gonzalez’s motion to intervene and prevent the settlement, which she believed to be inadequate. Gonzalez said it was “disappointing and unfortunate for them to deny my motion but it won’t stop me from fighting for justice.”

Judge Fischer will hold a virtual Zoom hearing on the settlement March 29 at 9 a.m. Pacific time.

The $18 million from the settlement will also go toward establishing harassment and discrimination prevention programs at Activision Blizzard that would be audited by the EEOC. Leftover funds may go to charities for advancing women in gaming or spreading awareness about gender equality issues, the company announced in a news release to investors Monday evening. Activision is legally required to deposit the funds into an escrow account within 30 days if the U.S. District Court of the Central District of California approves the agreement.

As part of the agreement with the EEOC and in addition to the $18 million, Activision is required to expand mental health counseling services and will add a new personnel evaluation process where employees can leave feedback on their bosses. An independent, equal employment opportunity expert hired by the company will report to the EEOC. The company must also give mandatory sexual harassment training that is live and interactive.

The agreement would be in effect for three years. If Activision does not comply, the EEOC could seek monetary relief.