Activision Blizzard settles California civil rights suit for $54 million, sets aside another $47 million for impacted employees

First reported by the New York Times, a major chapter in Activision Blizzard's reckoning over an alleged internal culture of misogyny and harassment has ended. The California Civil Rights Department (formerly the Department of Fair Employment and Housing) has settled with Activision Blizzard for $54 million, dropping its sexual harassment suit.

In addition to the $54 million paid to the state, Activision Blizzard has set aside $47 million to handle accusations of gender discrimination in pay and promotions. According to the settlement, Gilbert Casellas, a former chairman of the Equal Employment Opportunity Commission, concluded "there was no widespread harassment or recurring pattern or practice of gender harassment" following an investigation into Activision Blizzard.

In July of 2021, the California Civil Rights Department filed its lawsuit against Activision Blizzard, alleging that the gaming giant had a "frat boy" culture and was a "breeding ground for harassment and discrimination against women." In the settlement signed by Activision Blizzard and the California Civil Rights Department, the CRD concedes that there is "no systemic or widespread sexual harassment" at the company.

A 2021 Wall Street Journal report (users may encounter a paywall) alleged that longtime Activision CEO Bobby Kotick personally intervened in a sexual harassment investigation at the company, and even personally made a death threat to an assistant in 2006. Allegations against Bobby Kotick from the original version of the Civil Rights Department suit were removed from the final settlement signed by Activision Blizzard and the watchdog.

Former Blizzard Chief Compliance Officer Frances Townsend called the allegations "a distorted and untrue picture of [Activision Blizzard], including factually incorrect, old, and out of context stories⁠—some more than a decade ago." Townsend would step down from this role in 2022, but the executive is also notable for having toured the United States' infamous Abu Ghraib torture prison in 2004 while working for the Bush White House. Townsend denied witnessing abuse of prisoners during the tour.

Bloomberg published a report (users may encounter a paywall) corroborating the "frat boy" assessment of Blizzard, while in our own report based on interviews with three ex-Blizzard employees, one said it was "impossible" not to observe misconduct at the company.

In March of 2022, Blizzard settled a sexual harassment lawsuit with the Equal Employment Opportunity Commission for $18 million, while in October of that year Activision Blizzard was hit with another sexual harassment lawsuit that alleged company management was aware of a manager's yearslong pattern of predation and abuse of a female employee.

In February of 2023, Activision Blizzard paid a $35 million fine to the SEC to settle charges that the company broke whistleblower protections and failed to disclose information to investors.

Amid this controversy, one bright spot has been the historic union activity at some of Activision Blizzard's studios. Despite pushback from the company, the QA developers at Raven Software (a developer of Warzone, and formerly stewards of the Jedi Knight games) and Blizzard Albany (formerly Vicarious Visions and a contributor to Diablo 4) successfully unionized. A similar effort at studio Proletariat failed after workers alleged management's response made "a free and fair election impossible."

After starting the process in January of 2022, Microsoft closed a $68.7 billion deal to purchase Activision Blizzard this October. Controversial CEO Bobby Kotick will remain at the helm until the end of the year, after which it's expected that he will step down.

Update: A previous version of this article stated that Activision Blizzard had settled a "sexual harassment suit," but the amended lawsuit only regards pay and promotion inequity. That wording has been corrected, and more context for the settlement agreement added.