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California settles Activision Blizzard gender discrimination lawsuit for $54 million

California settles Activision Blizzard gender discrimination lawsuit for $54 million

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The case that set in motion Microsoft’s eventual acquisition of Activision Blizzard is coming to an end.

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Illustration by Alex Castro / The Verge

A California regulator has settled its blockbuster lawsuit that alleged a culture of sexual harassment at Activision Blizzard. Now under the ownership of Microsoft, the gaming company will pay about $54 million as part of the settlement, according to a press release from California’s Civil Rights Department (CRD).

The CRD (formerly known as the Department of Fair Employment and Housing or DFEH) filed this lawsuit in July 2021, alleging that Activision Blizzard had a “frat boy” culture where women were subject to sexual harassment and gender-based discrimination. Following the suit, employees walked out, executives including then-Blizzard president J. Allen Brack and Blizzard’s former SVP of HR left the company, and, months later, The Wall Street Journal reported that CEO Bobby Kotick had known of sexual misconduct allegations for years.

However, as part of the settlement agreement, the CRD said that “no court or any independent investigation has substantiated any allegations” of sexual harassment at Activision Blizzard and that there wasn’t evidence of wrongdoing by Kotick, according to The New York Times. (The company told the SEC last year that an internal investigation found “no evidence to suggest” that senior executives ignored allegations of gender harassment.) The WSJ also reported on the lawsuit on Friday.

If a court approves the settlement, Activision Blizzard will pay about $54,875,000 to “cover direct relief to workers and litigation costs,” with $45,750,000 of that going to “a settlement fund dedicated to compensating workers,” the CRD says.

Months after California’s lawsuit, Microsoft announced that it intended to acquire Activision Blizzard in a $68.7 billion deal. Following a series of regulatory hurdles, that deal finally closed in October. Kotick will stay at Activision Blizzard until the end of the year.

In 2022, a judge approved Activision Blizzard’s $18 million settlement with the US Equal Employment Opportunity Commission over a separate lawsuit alleging sexual harassment and discrimination at the company.