Activision Blizzard will pay $54 million to settle California workplace discrimination suit

California’s Civil Rights Department reached a settlement with Activision Blizzard late last week two years after the state regulator brought a lawsuit alleging gender discrimination, pay inequities and a culture of sexual harassment at the video game company.

Activision Blizzard, which publishes hit games like the Call of Duty franchise and World of Warcraft, agreed to pay $54 million and committed to implementing measures to ensure fair pay and equitable promotions. Roughly $46 million of the funds will go to compensate workers, particularly women who were employees or contractors with the company from 2015 to 2020. While the settlement’s details are ironed out, it is still subject to court approval.

“If approved by the court, this settlement agreement represents a major step forward and will bring direct relief to Activision Blizzard workers,” California Civil Rights Department Director Kevin Kish said. The agency, which was formerly known as the Department of Fair Employment and Housing, changed its name last year. Activision Blizzard operates out of its headquarters in Santa Monica, California.

The agency filed its lawsuit in Los Angeles County Superior Court back in 2021, alleging that the company broke rules set forth through the state’s Equal Pay Act and Fair Employment and Housing Act. The California Civil Rights Department will withdraw its allegations as part of the settlement, and stated in the agreement that “no court or independent investigation has substantiated any allegations that there has been systemic or widespread sexual harassment at Activision Blizzard.”

The settlement also states that the California Civil Rights Department investigation did not produce evidence of illegal behavior on behalf of the company’s board, its executives or its chief executive, Bobby Kotick.

In February, Activision Blizzard agreed to a $35 million settlement with the SEC over its failure to “implement necessary controls to collect and review employee complaints about workplace misconduct,” ultimately obscuring that information from being disclosed to investors.

California’s lawsuit initiated a dramatic era at Activision Blizzard that included employee walkouts, inflammatory remarks from executives, share price instability and ongoing concerns that the company had fostered a toxic workplace culture to the detriment of its employees.

The sequence of events ultimately led Microsoft to make a move to acquire the company — a $68.7 billion gambit that regulators finalized in October. Longtime Activision Blizzard CEO Bobby Kotick, deeply embroiled in the years-long controversy, will depart the company at the end of the year.