Activision Blizzard reaches $18 million settlement with EEOC

This week, Activision Blizzard’s legal troubles–a result of numerous sexual harassment and toxic workplace allegations–continued when it was announced the US Equal Employment Opportunity Commission (EEOC) filed a lawsuit against the Call of Duty and World of Warcraft publisher. The suit accused Activision Blizzard of failing to address the myriad accusations, but shortly after the filing, the company announced that it had reached an $18 million settlement with the EEOC.

The EEOC’s suit was the culmination of an investigation that began in June, which found evidence of sexual harassment and descrimination and/or retaliation relating to pregnancy.

“The EEOC made a determination in June that there was reasonable cause to believe that Activision allowed/did not promptly respond to claims of harassment, terminated (or constructively terminated) women who complained of it, and engaged in discrimination on the basis of pregnancy,” Richard Hoeg, attorney at Hoeg Law in Michigan, told GameDaily.

Hoeg said that the EEOC sued Activision Blizzard after settlement talks–which are mandated by law–fell through, presumably because the company was unwilling to concede whatever issues resulted from the EEOC’s investigation at the time. 

“The EEOC does not sue on its own behalf very often (less than 10% of instances where they believe there is a reasonable cause to find discrimination), so [a suit] is a significant step and indicative of an agency that believes it can make an example of the defendant,” Hoeg explained.

However, now that the two parties have settled out of court, Activision Blizzard is free to focus on its other investigations from the SEC, California’s DFEH, and its own shareholders. As part of the agreement, Activision Blizzard has committed $18 million to “compensate and make amends to eligible claimants,” according to yesterday’s statement.

Many are calling the settlement an eschewal of responsibility on the part of Activision Blizzard, and claiming that $18 million is an unsatisfactory amount, especially considering that CEO Bobby Kotick stands to make $154 million this year.

“My extremely lukewarm take is that Activision Blizzard should probably not be allowed to pay its way out of a jam caused directly and indirectly by its executives for less than some of those executives make in a year,” Washington Post games reporter Nathan Grayson tweeted on the subject.

Last fiscal year, Activision Blizzard’s revenue reached $8.1 billion, with net income hitting $2.1 billion. Considering these numbers, it’s hard to disagree that an $18 million settlement is nothing more than a slap on the wrist, and that the company is escaping the EEOC’s scrutiny for a pittance. Following this settlement, you can bet that the other lawsuits Activision Blizzard is facing will be watched carefully. Meanwhile, it has taken cursory steps to improve its reputation, including renaming characters and locations in Overwatchand World of Warcraft who were originally named after abusers. Whether these steps are part of a larger reform for a company tied up in all manner of investigations and lawsuits remains to be seen.