Activision Blizzard Settles 2021 Class Action Lawsuit

Activision Blizzard will pay almost $55 million to settle the class action lawsuit that led to its acquisition by Microsoft.

The California Civil Rights Department sued Activision Blizzard in July 2021, alleging that its CEO and senior leadership ignored numerous sexual harassment, discrimination and pay disparity complaints from female employees over several years, creating a toxic workplace environment. Activision denied the claims and said it would fight the case in court. But that November, The Wall Street Journal published an explosive expose detailing the company’s behavior that cast a particularly harsh light on CEO Bobby Kotick. In response, Xbox head Phil Spencer publicly stated three days later that Microsoft would reevaluate its relationship with the company. And so Kotick called Spencer to discuss “strategic opportunities.”

The rest, as they say, is history: Microsoft announced in January 2022 that it would acquire Activision Blizzard for $67.8 billion. And after a bruising 21-month legal battle with regulators, it finally closed the deal in October 2023. But the class action lawsuit remained hanging over the company.

Until now, that is.

“The California Civil Rights Department today announced reaching an approximately $54 million settlement agreement to resolve allegations that Activision Blizzard discriminated against women at the company, including by denying promotion opportunities and paying them less than men for doing substantially similar work,” The California Civil Rights Department announced Friday. “Under the agreement, which is 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 California between October 12, 2015 and December 31, 2020.”

As part of the settlement, Activision Blizzard will pay about $54.9 million to cover direct relief to workers and litigation costs. Of that, about $46 million will go to a settlement fund dedicated to compensating workers and excess settlement funds will be distributed to charitable organizations focused on advancing women in the video game and technology industries or promoting awareness around gender equality issues in the workplace.

Activision Blizzard has also agreed to retain an independent consultant who will continue to evaluate and make recommendations about its compensation and promotion policies and training materials. And it will continue to include qualified candidates from underrepresented communities in its outreach, recruitment, and retention.

Women who worked at Activision Blizzard between October 12, 2015 and December 31, 2020 may be eligible to receive compensation, but more information will be made available when the court overseeing the case approves this settlement. That could happen as soon as next week. Which is conveniently just two weeks before Kotick is scheduled to leave the company.