Why it matters: This is the second largest settlement that the California Civil Rights Department has negotiated and originally it had wanted Activision Blizzard to pay far more. But since the suit was filed two years ago, Activision has taken a number of steps to create a culture of inclusivity and diversity at the company including hiring its first dedicated chief diversity officer last year.
Activision Blizzard and the California Civil Rights Department (CRD) have settled a lawsuit in which the video game publisher was accused of widespread gender and pay inequality for roughly $54 million.
Under the agreement, which is still subject to court approval, Activision Blizzard will take additional steps to help ensure fair pay and promotion practices at the company and provide monetary relief to women who were employees or contract workers in the state between October 12, 2015 and December 31, 2020, according to a statement by CRD.
The CRD investigated the Santa Monica, Calif.-headquartered company for more than two years and then filed a lawsuit against it in 2021 for alleged violations of California's Equal Pay Act and Fair Employment and Housing Act.
Separately, the now Microsoft-owned company struck a consent decree with the U.S. Equal Employment Opportunity Commission in 2021 on these issues.
Activision Blizzard hasn't released a comment but in the past has denied the charges and said a 2022 investigation by its board of directors ultimately determined that they were false.
Earlier this year upon the release of its ESG report, Brian Bulatao, Activision's chief administrative officer and chair of its ESG steering committee, wrote that the company has taken several steps to increase its inclusion and diversity including hiring last year its first dedicated chief diversity, equity, and inclusion officer and appointing its first head of inclusive game design. It has also partnered with Reboot Representation to increase the number of Black, Latin, and Native American women in technology, according to Bulatao.
The settlement calls for $54.8 million to cover direct relief to workers and litigation costs. Of that, $45.7 million will go to a settlement fund dedicated to compensating workers.
The settlement also requires Activision Blizzard to retain an independent consultant to evaluate and make recommendations regarding its compensation and promotion policies and training materials.
If approved, the settlement would be the second-largest by CRD, according to the Wall Street Journal. The highest settlement was for $100 million with Riot Games, over alleged gender discrimination. Riot Games issued an apology after the settlement was announced.
The CRD had wanted an amount from Activision that would top the settlement Riot Games paid, the Wall Street Journal reported, citing people familiar with the negotiations, as the state originally estimated Activision's liability to be at nearly $1 billion based on 2,500 employees who might have claims against the company.