Why the recent Activision settlement matters 

On Behalf of | Dec 27, 2023 | Employment Law |

When California workers file complaints related to wage and hour violations and/or discrimination, the state tends to treat such accusations seriously. As a result, business owners generally benefit from seeking legal guidance as proactively as possible in response to a claim of mistreatment. The road to defending against such claims can be long and winding. Therefore, being thoughtful and strategic in one’s response is necessary.

Take, for example, the state’s legal action against Activision Blizzard. More than two years ago, the company was accused of fostering a work culture of sexual discrimination and harassment against women. This case was settled very recently for $54 million. The company also incurred untold losses in legal fees, reputational damage and negative employee morale. Learning from this case can help business owners to respond more effectively to worker concerns and formal complaints alike. 

What happened?

The primary issues in this case concern pay discrimination, discrimination in promotional opportunities for women and sexual harassment. Ultimately, the state dropped its case when the videogame maker agreed to the massive settlement noted above. 

In exchange, the California Civil Rights Department has confirmed that no judge nor jury has confirmed wrongdoing on the part of Activision. It additionally has agreed that “there was no widespread harassment or recurring pattern or practice of gender harassment” at the company. However, the settlement amount speaks for itself and the damage against the company has been done. The fallout from the initial lawsuit filing caused the company’s stock to drop so low in 2021 that Microsoft bought the company and things only got more challenging from there.

The original complaint observed that the company “fostered a pervasive ‘frat boy’ workplace” that resulted in significant sexual harassment. The pay disparity concerns and lack of promotional opportunities for women were also highlights of that complaint. 

Lessons to be learned

When it comes to wage and hour violations, in addition to unlawful discrimination and harassment, taking proactive steps to mitigate any reason for concern is ideal. Workers cannot file claims rooted in favorable objective evidence if a work culture is healthy to begin with. If Activision hadn’t allowed a “frat boy” culture to thrive, much of the company’s woes could have likely been prevented. 

Business owners who are unsure of how to safeguard against such complaints can seek legal guidance at any time. Speaking with someone who is well-versed in the ins and outs of California employment law can help to ensure that your business interests remain well protected.


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