California state's Activision Blizzard lawsuit ends with $55m settlement

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Update, December 20, 2023: Activision Blizzard has sent GamesIndustry.biz a statement claiming the CRD has withdrawn all of its allegations from the original lawsuit as part of the settlement.

The Call of Duty publisher also shared a document signed by both parties, in which the two agree that no court or independent investigation has substantiated any of the claims regarding:

• systemic or widespread sexual harassment at Activision Blizzard
• Activision Blizzard executives ignoring, condoning or tolerating harassment, retaliation or discrimination
• mishandling by Activision Blizzard's board or directors, including CEO Bobby Kotick, regarding instances of workplace misconduct

However, the CRD has also told GamesIndustry.biz that any withdrawal of any allegations has yet to be confirmed, and that this document is "an incomplete copy of the settlement agreement."

The department is still finalising its proposed consent decree and a proposed second amended complaint, and will share more information when these it is available. Until then, the CRD said it "would be misleading to report on CRD’s allegations without reviewing the document."

None of these documents have been submitted to the court at the time of writing.

Original story, December 19, 2023: Activision Blizzard and California's Civil Rights Department have reached a settlement over the latter's accusations that the company had become a "breeding ground for harassment and discrimination against women."

On Friday, the CRD announced the agreement between the two organisations would see Activision pay just shy of $55 million to cover direct relief to workers and legal fees.

Approximately $46 million of this total will go into a settlement fund for compensating workers affected by toxicity and discrimination within the company – primarily women who were employed or contracted by Activision Blizzard in California between October 12, 2015 and December 31, 2020.

The agreement also states that Activision will distribute any excess settlement funds to charities that are focused on advancing women in the games and tech industries, or promoting awareness around gender equality at work.

The Call of Duty publisher has also agreed to retain an independent consultant that will evaluate and make recommendations in terms of training materials, promotion policies and compensation, and it will continue efforts to make itself more inclusive for staff and applications from underrepresented communities.

The settlement is subject to court approval, and the terms and figures could change before it it implemented.

In a statement to GamesIndustry.biz, an Activision Blizzard spokesperson said: "We are gratified that we have reached an agreement with the California Civil Rights Department today.

"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."

News of the settlement first emerged from The Wall Street Journal, whose sources say the CRD originally pushed for a settlement amounting to more than $100 million, which would have put it above the similar settlement with Riot Games – currently the largest the state agency has reached to date.

The CRD, then the California Department of Fair Employment and Housing, first filed the lawsuit in July 2021 following a two-year investigation into the company. News of the suit and its accusations prompted staff walkouts, media boycotts and high profile departures, including Blizzard president J. Allen Brack.

In 2021, the state estimated Activision could be liable to nearly $1 billion for 2,500 with potential claims against the publisher.

It is also believed the fallout from the lawsuit, including calls for CEO Bobby Kotick to be removed, were a key factor in Microsoft making its $68.7 billion acquisition of the company.

Activision Blizzard has already reached a settlement in with California's Equal Employment Opportunity Commission, which also stemmed from a dispute over sexual harassment and discrimination at the company.

The EEOC settlement included an $18 million fund for eligible claimants.

The US Securities and Exchange Commission also investigated how the publisher handles workplace misconduct, resulting in a $35 million settlement.