California Agency Drops Sexual Harassment Case Against Activision Blizzard

More than two years after a California state agency accused the video game maker Activision Blizzard of fostering a culture of sexual harassment against women, the agency on Friday withdrew its allegations in a stunning about-face..

The California Civil Rights Department and Activision Blizzard said in a settlement agreement with the company that “no court or any independent investigation has substantiated any allegations” about “systemic or widespread sexual harassment at Activision Blizzard” nor “that Activision Blizzard senior executives ignored, condoned or tolerated a culture of systemic, harassment, retaliation or discrimination.” The settlement agreement also said that its investigation found no evidence of wrongdoing by Activision’s board or its chief executive, Robert Kotick.

The withdrawal of the charges ends a long-running narrative about the company, which it had repeatedly said was false. The original complaint from the California agency contended that the state had conducted an investigation into Activision and found that it “fostered a pervasive ‘frat boy’ workplace” and that female employees were “subjected to constant sexual harassment.” At the time the charges were filed, Activision said the complaint included “distorted and, in many cases, false, descriptions” and was “irresponsible behavior from unaccountable state bureaucrats.”

The settlement agreement is expected to be filed in court early next week.

The settlement, signed by both parties, said Gilbert Casellas, a former chairman of the Equal Employment Opportunity Commission, had conducted a review of Activision Blizzard and found “there was no widespread harassment or recurring pattern or practice of gender harassment” at the company.

Activision Blizzard, which makes video games like Call of Duty, Guitar Hero and World of Warcraft, was recently acquired by Microsoft after a long battle with antitrust regulators. The Federal Trade Commission had sought to block the deal but a judge ruled in favor of it.

The case from the California Civil Rights Department — and the pall it created over the company in 2021 — was one of the factors that led Microsoft to seek to buy Activision because its stock had fallen.

As part of the settlement, Activision Blizzard agreed to put aside money — as much as $46.75 million — to pay women who had worked at the company from 2015 to 2020 who said they had received inequitable pay. But, unusually, one of the California agency’s own expert witnesses testified that when taking into account the seniority of roles of women at the company, he did not find pay disparity. He said there was a disparity when not taking into consideration the rank of the employees.

Activision agreed to hire an outside consultant to evaluate compensation, promotion policies and training as part of the settlement.