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Kotick Accused of Not Telling Board of Directors or Investors About Activision Blizzard Sexual Harassment

Activision Blizzard

CEO Bobby Kotick has been accused of not telling the board of directors or investors about the sexual harassment allegations at Activision Blizzard.

The allegations come via a report from the Wall Street Journal; citing former employees and those “familiar” with various facets of the company where relevant. The include failing to notify the board of directors of major sexual harassment incidents, and defending staff accused of sexual harassment.

 

Sledgehammer Games Employee Accusations

In July 2018, Kotick allegedly received an email from a lawyer representing a former Sledgehammer Games employee. That lawyer claimed her client was raped in 2016 and 2017 by a male supervisor, Javier Panameno; after being pressured to drink too much alcohol at office and work events, and sexually harassed a second woman.

While the employee allegedly reported this to human-resources and other supervisors, nothing was done. As such, the employee threatened the company with a lawsuit. The second incident was reported to the police, but no charges were brought.

 

Activision spokeswoman Helaine Klasky stated to Wall Street Journal that Panameno was fired two months after executives received the email in 2018. “Within months” of the lawyer’s email, Activision allegedly reached an out-of-court settlement.

Klasky also noted that the female employee had not reported the incidents to them before she left the company, which the lawyer claims she did, as did a former colleague. Klasky also notes that the employee was too intoxicated to remember what occurred following the alleged incidents, and that Panameno’s “recollection of the second encounter” also conflicted with the employee’s report to police.

When the Wall Street Journal reached out to Panameno’s current employer (Zynga), they stated they had launched an internal investigation. Subsequently, Panameno resigned.

 

That same lawyer email to Kotick also accused Sledgehammer Games employee Eduard Roehrich of sexually harassing employee Ashley Mark. She had complained to supervisors and human resources in 2017, following incidents including at a company party where there was heavy drinking.

Roehrich stated to the Wall Street Journal that he was investigated for the incident. “It was unclear what exactly did and did not happen, since a lot of alcohol was involved,” Roehrich stated, “it was stupid of me and totally uncalled for to get that drunk.” His subsequent punishment was two-week paid leave, and remaining at Activision in a different position.

A HR letter to Roehrich, shared with the Wall Street Journal, asked he “keep this matter confidential.” Roehrich was ultimately let go in 2018, following an argument with his manager regarding his green card. Klasky confirmed Roehrich was terminated for this reason, and that the company would soon ban alcohol in the office.

 

Kotick Accused of Failing to Disclose to Directors and Investors

Kotick allegedly did not mention any of the above to the board of directors; contrary to how he told directors and executives he was not aware of many of the allegations of sexual harassment and discrimination that came were uncovered this year.

In addition, Kotick also allegedly did not tell investors about the two year long U.S. Equal Employment Opportunity Commission (EEOC) investigation, and only disclosed the Securities and Exchange Commission (SEC) probe in September of this year after questions came from the Wall Street Journal. An Activision lawyer stated most companies do not disclose EEOC investigations.

Internal documents also claimed Kotick had downplayed other allegations. Those alleged memos, emails, regulatory requests, and aforementioned interviews with those claiming to have knowledge of the situation claimed Kotick knew of employee misconduct allegations in many parts of Activision Blizzard.

Along with allegedly failing to notify the board of directors about everything he knew, Kotick allegedly continued to do this even after regulators began to investigate Activision Blizzard in 2018. Employees accused of misconduct were also allegedly “praised on the way out,” while their accusers were asked to not divulge their accusations to anyone else.

 

What Kotick told employees, the board of directors, and investors; was all part of the subpoena from the SEC probing how Activision Blizzard handled reports of misconduct.

When the allegations first became public in July of this year, the board of directors questioned Kotick on why they had not been informed of such incidents. Kotick allegedly told them any “cultural issues” came from Blizzard Entertainment, and had been resolved years earlier.

Klasky stated “Mr. Kotick would not have been informed of every report of misconduct at every Activision Blizzard company, nor would he reasonably be expected to have been updated on all personnel issues.” Nonetheless, she admitted Activision sometimes “fell short of ensuring that all of our employees’ behavior was consistent with our values and our expectations.”

Klasky had also stated Activision’s board had been “informed at all times with respect to the status of regulatory matters” but denied Kotick saying all issues were only at Blizzard.

 

Activision Employee Accusations

However, the Wall Street Journal’s report claims Kotick allegedly was “typically aware” of major problems in each of Activision’s twelve development studios and three major business units. Klasky claimed that while Kotick may express opinions on matters brought to his attention he “generally isn’t involved in the hiring, compensation or termination decisions for most employees.”

Since the California Department of Fair Employment and Housing (DFEH) lawsuit began, Activation had received over 500 reports from current and former employees alleging harassment, sexual assault, pay discrimination, and more. Klasky stated Activision were investigating the claims with internal and external teams.

While Kotick allowed studios to operate as independently as possible (allegedly along with high-profile hiring decisions, and exit and pay packages for “star developers”) this allegedly led to “frat house” behavior, and women feeling unable to complain to human resources.

Klasky stated Activision human resources began reporting directly to the corporate office in 2019, and its prior operation “occasionally allowed some employees to conduct themselves in truly regrettable ways.” 

 

The fresh batch of allegations along with Panameno and Roehrich included Dan Bunting, co-head of Activision’s Treyarch, accused of sexually harassing a female employee in 2017 after a “night of drinking.” While Activision’s HR department and other supervisors launched an internal investigation in 2019 and recommended he be fired, Kotick allegedly intervened to keep him.

Bunting was allegedly given counseling instead. Klasky stated an outside investigation concluded in 2020, and the aftermath led to the company using other disciplinary measures. Nonetheless, Bunting reportedly left the company after the Wall Street Journal inquired about the incident.

In 2020, around 30 female employees working at Activision’s esports division wrote an email to their unit leaders; claiming they had been subjected to “unwanted touching, demeaning comments, exclusion from important meetings, and unsolicited comments on their appearance.” Kotick was allegedly aware of this email.

Klasky stated that after meeting with representatives of the group, Activision provided diversity and inclusion training to the esports leadership team.

 

Praise for Fired Alleged Blizzard Harasser & Approved Company Emails

One of the few new allegations outside of Activision is against former Blizzard technology chief Ben Kilgore. He allegedly faced multiple accusations of sexual harassment over several years; and allegedly lied during a company investigation over him having a relationship with a lower-level employee.

Kilgore was fired in 2018, approved by Kotick. It was former head of Blizzard Michael Morhaime who sent an email to employees thanking Kilgore for “his many contributions over the last four and a half years.” Some employees had also allegedly been told not to disclose the nature of Kilgore’s departure. Klasky declined to comment on this case.

The report also accuses (based on documents and claims from people) that Kotick approves internal company-wide emails and media responses. This included the draft of the email calling the lawsuit of “factually incorrect, old and out of context stories” that led to a staff walk-out.

 

Female Blizzard Co-Lead Leaves, Claims Activision Sexual Harassment

When Jen Oneal replaced leaving Blizzard President J. Allen Brack (alongside Mike Ybarra), she allegedly stated she had a lack of faith in Activision’s leadership- directly to Activision’s legal team in an email. Therein she allegedly stated “it was clear that the company would never prioritize our people the right way.”

Her concerns may not be unfounded, as in the email she allegedly states she had been sexually harassed while she was at Activision, paid less than her male counterpart, and wanted to quit; as she did on November 2nd. “I have been tokenized, marginalized, and discriminated against,” Oneal allegedly stated, along with also that she made the decision that was best for her and her family.

At an Activision development studio party Oneal attended around 2007, where Kotick was allegedly present, Oneal claims the party had scantily clad women dancing on stripper poles. Another person who attended the party told the Wall Street Journal that the DJ encouraged female guests to drink more so the men would have a better time. Klasky stated she could not recall of Kotick attended the party.

 

Accusations Against Kotick

The Wall Street Journal also addressed prior accusations made by women against Kotick; from both work and elsewhere. Those familiar claimed that in some instances he had worked to settle complaints “quickly and quietly.”

In 2006, an assistant accused Kotick of harassment, including an allegedly threatening voicemail saying he would have her killed. This was allegedly  settled out of court. Klasky stated “Mr. Kotick quickly apologized 16 years ago for the obviously hyperbolic and inappropriate voice mail, and he deeply regrets the exaggeration and tone in his voice mail to this day.”

In 2007, Kotick was sued by a flight attendant on his co-owned private jet; after he allegedly fired her when she complained about the pilot sexually harassing her. Kotick and other defendants denied the allegations, but an arbitrator said in sword testimony that Kotick told the attendant and her attorneys “I’m going to destroy you.”

A spokesman for Kotick denied this, and that the flight attendant had never complained about the issue directly to him. Nonetheless they settled in 2008 for $200,000 USD.

 

As previously reported, the California Department of Fair Employment and Housing (DFEH) concluded a two year investigation. Their findings lead to a lawsuit against Activision Blizzard for “frat boy” style sexual harassment; possibly leading to one woman committing suicide on a company trip. Other claims include discrimination by women being paid less, promoted less frequently, and after longer periods of time.

While initially dismissed by Activision Blizzard as including “distorted, and in many cases false, descriptions of Blizzard’s past,” and “factually incorrect, old and out of context,” almost 1,000 current and former Activision Blizzard employees signed an open letter condemning the response as abhorrent and insulting.” Staff led a walkout soon after.

Kotick stated that the company’s initial response was “tone deaf,” and announced they were bringing in law firm WilmerHale to conduct an immediate review of their policies and procedures. While announcing third party evaluations, diverse hiring, and removing references to accused developers from their games; employees were dissatisfied with the response for not addressing their demands.

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.”

Claims from temporary workers were added to the lawsuit; along with allegations of Activation Blizzard destroying documents relating to employees and pay.

After an $18 million USD settlement deal with the U.S. Equal Employment Opportunity Commission (EEOC), the DFEH objected for it being too lenient, and would hinder their own case as relevant documents were proposed to be destroyed. However, the EEOC claimed there was a conflict of interest thanks to two DFEH attorneys having worked for the EEOC; putting both cases in jeopardy.

Most recently, Kotick announced a zero-tolerance harassment policy and diverse hiring goals for the company; while also reducing his own compensation to its legal minimum.

 

We shall keep you informed as we learn more.

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Ryan Pearson

About

Taking his first steps onto Route 1 and never stopping, Ryan has had a love of RPGs since a young age. Now he's learning to appreciate a wider pallet of genres and challenges.




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