As US federal agencies sue Activision Blizzard for sexual harassment and discrimination; the publisher announces they have settled with the EEOC for $18 million USD.
The Wall Street Journal reported September 20th that, “according to the people and documents” they obtained, the Securities and Exchange Commission (SEC) subpoenaed Activision. This was part of their investigation into the sexual harassment and discrimination allegations against them.
The subpoena also includes Chief Executive Bobby Kotick (also CEO of Activision Blizzard), and records of his communications with other senior executives over the allegations. They also requested minutes from board meetings since 2019, personnel files of six former employees, separation agreements from this year.
The SEC is also requesting information to determine if Activision and its executives had properly disclosed the allegations against them, and if that information could have been shared earlier with investors and other parties. Activision Blizzard had also previously been accused of destroying documents relating to employees and pay, meaning the SEC will have some surprises if true.
In addition, the Communications Workers of America filed with the National Labor Relations Board earlier this month. They allege worker intimidation by Activision management, including (in the Wall Street Journal’s words) “coercive tactics” to stop employees from organizing.
That same day, two new senior executives were hired by Activision to reportedly “build a more inclusive workplace and grow its revenue.” These include the previously reported Chief People Officer Julie Hodges (former Disney executive) now filling in for the vacated HR chief role, and Chief Commercial Officer Sandeep Dube (Delta Air Lines).
Activision spokeswoman Helaine Klasky confirmed the SEC investigation on the 20th, stating it concerned Activision’s “disclosures regarding employment matters and related issues.” She confirmed the SEC had subpoenaed several former and current employees, and they they were cooperating. She also stated Activision had “made great efforts to respect the rights of all employees under the NLRB.”
On September 21st, Blizzard Entertainment Chief Legal Officer Claire Hart confirmed she was leaving the company. “The past three years have been full of unexpected twists and turns,” Hart stated on LinkedIn, “but I feel honored to have worked with and met so many great people at Blizzard and across the Activision Blizzard businesses.” Hart also state she will be taking a short break before deciding what to do next.
On September 27th, Kotaku and The Verge reported that the U.S. Equal Employment Opportunity Commission (EEOC) was the latest to sue Activision Blizzard. While Kotick had refereed to the complaint in a press release to investors last week, court documents filed on the 27th revealed more.
As expected, this includes allegations of sexual harassment and discrimination; aimed at Activision Blizzard, subsidiary King (Candy Crush, Crash Bandicoot: On the Run!), and 10 unnamed individuals who may be named at a later date once their names are learned.
The Verge noted that Activision Blizzard were notified of the EEOC’s findings on June 15th, and its investigation began in September 2018. Despite “extensive conciliation discussions” with Activision, the EEOC “was unable to secure through informal methods an acceptable conciliation agreement.”
Later that day, Activision Blizzard announced in a press release that they had reached an $18 million USD settlement deal with the EEOC. As part of efforts to have “the most welcoming, inclusive workplace,” the agreements include the aforementioned fund for eligible claimants.
Unclaimed funds will be divided among EEOC-approved charities that advance women in the video game industry, or “promote awareness around harassment and gender equality issues as well as company diversity, equity, and inclusion initiatives.”
Along with other principle terms as part of the agreement, Activision Blizzard announced an initiative to develop software tools and training programs. These aim to improve workplace policies and practices for employers across the technology industry.
Further steps include upgrading policies, practices, and training to prevent and eliminate harassment and discrimination at its workplaces. This will include an expanded performance review system with “a new equal opportunity focus.”
There will also be ongoing oversight and reviewing of the training programs, investigation policies, disciplinary framework and compliance. This will be via a third-party equal opportunity consultant, and their findings will be regularly reported to Activision Blizzard’s Board of Directors and EEOC.
Kotick also issued a statement, yet again re-affirming that the company would be a diverse and safe place to be.
“There is no place anywhere at our company for discrimination, harassment, or unequal treatment of any kind, and I am grateful to the employees who bravely shared their experiences. I am sorry that anyone had to experience inappropriate conduct, and I remain unwavering in my commitment to make Activision Blizzard one of the world’s most inclusive, respected, and respectful workplaces.
We will continue to be vigilant in our commitment to the elimination of harassment and discrimination in the workplace. We thank the EEOC for its constructive engagement as we work to fulfill our commitments to eradicate inappropriate conduct in the workplace.”
As previously reported, the California Department of Fair Employment and Housing concluded a two year investigation. Their findings lead to a lawsuit against Activision Blizzard for “frat boy” style sexual harassment, which may have led to one woman who committed suicide on a company trip, and discrimination for women being paid less and promoted less frequently and after longer periods of time.
Activision Blizzard stated that while there was no place for any kind of harassment in the industry, they felt the Californian report “ includes distorted, and in many cases false, descriptions of Blizzard’s past.” An internal email from Activision executive Frances Townsend also described the allegations as “factually incorrect, old and out of context.”
In response, almost 1,000 current and former Activision Blizzard employees signed an open letter condemning the response as “abhorrent and insulting.” It also called for official statements to recognize how serious the allegations were, and demonstrate compassion for the victims.
Staff led a walkout on July 28th. Their demands included ending mandatory arbitration clauses in all employee contracts, adopting policies to improve representation at all levels of the company, publishing pay data to show women are paid and promoted fairly, and hiring a third party to audit the company’s executive and HR staff. Sources claimed staff would not be punished for the walkout, and had paid time off.
CEO Bobby Kotick later stated that the company’s initial response was “tone deaf.” He announced the company was bringing in law firm WilmerHale to conduct an immediate review of their policies and procedures.
Kotick also stated the company would investigate all claims, create safe spaces for Listening Sessions organized by third parties, an immediate evaluation of managers and leaders, compliance resources for diverse hiring, and removing NPCs from World of Warcraft inspired by those named in the allegations. Employees stated they were dissatisfied with Kotick’s response; for not addressing their demands.
Almost 500 former and current Ubisoft employees announced their support for Activision Blizzard staff in an open letter; calling for new industry-wide rules and processes. Jeff Strain, a former Blizzard Entertainment developer and founder of Undead Labs, recently called for unionization of the video games industry.
An “alliance” of Activision Blizzard staff also rejected WilmerHale as the third party auditing the company. This was due to an alleged conflict of interest, the law firms alleged “history of discouraging workers’ rights and collective action,” and being led by Stephanie Avakian; allegedly specializing in “protecting the wealthy and powerful.”
Coca-Cola and State Farm announced they were reassessing their partnerships with Activision Blizzard’s Overwatch League, pulling their promotions from upcoming events. They join T-Mobile who pulled support from the Call of Duty league shortly after the controversy broke.
Activision’s logo was also omitted from trailers and alpha builds of Call of Duty: Vanguard; later stated as a “creative choice that reflects how Vanguard represents the next major installment in the franchise.”
Blizzard Entertainment also announced they would be renaming Overwatch character McCree (due to being named after a developer named in the allegations), and censoring sexual content in World of Warcraft.
Frances Townsend, an Activision Blizzard executive and former Assistant to the President for Homeland Security and Counterterrorism, deleted her Twitter account; after backlash against her tweet promoting “the problem with whistleblowing.”
Claims from temporary workers have been added to the lawsuit; along with allegations of Activation Blizzard destroying documents relating to employees and pay.