According to a California court filing published Tuesday, U.S. District Judge Dale Fischer is "prepared to approve" Activision Blizzard's $18 million settlement with the Equal Employment Opportunity Commission (EEOC).
According to the filing, "the Court is generally satisfied that both the monetary relief and the nonmonetary provisions are fair, reasonable, and adequate." The evidence presented by the opposition was described as "speculative" at best.
"We are pleased that the Court acknowledges that our agreement with the Equal Employment Opportunity Commission is fair, adequate, and in the public interest," Activision Blizzard said in a statement to The Washington Post. "Our goal has always been to provide immediate and meaningful compensation to eligible employees who choose to participate, as well as to continue making Activision Blizzard a model for our industry."
The California Department of Fair Employment and Housing first sued Activision Blizzard in July, accusing the video game publisher of having a "'frat boy' workplace culture." Following an EEOC lawsuit, Activision Blizzard agreed to establish a $18 million fund for harassment and discrimination victims in September.
The EEOC, a federal agency, and the DFEH, a state agency, both have jurisdiction over workplace sexual harassment cases, and in 2018, both agencies received anonymous tips to investigate Activision Blizzard. The two agencies became embroiled in a disagreement over how much victims should be paid in the settlement, as well as concerns that if the EEOC settled with Activision Blizzard on a federal level, the DFEH would be barred from pursuing additional damages in state court.
"The DFEH will continue to vigorously prosecute its action against Activision in California state court," said DFEH spokesperson Fahizah Alim. "In recent weeks, DFEH defeated Activision's request that the Court dismiss DFEH's case, and DFEH has sought documents and other evidence of sexual harassment, discrimination, and retaliation violations committed by Activision over a long period of time." The trial date has been set for February 2023 by the Court."
According to P. Andrew Torrez, who owns a law firm and hosts the Opening Arguments podcast, which has covered the Activision Blizzard suit, the judge's ruling is a victory for Activision Blizzard and may help deflate the DFEH lawsuit. Claimants in both the DFEH and EEOC suits could choose to receive compensation from the EEOC settlement, but doing so would preclude them from continuing in the DFEH suit.
"It's a clear win for the company Activision Blizzard." They lose a small amount while effectively undermining state law proceedings in which the state agency was far more aggressive," Torrez said, referring to the DFEH suit. Activision made $2.16 billion in revenue in the December quarter and expects to make $8.8 billion in 2021.
The $18 million settlement with the EEOC would be the second largest sexual harassment settlement ever negotiated by the agency. However, according to critics of the settlement, including the DFEH, a significant number of Activision Blizzard employees, and their ally, media labor union Communications Workers of America (CWA), that amount is insufficient for potentially hundreds or thousands of victims. The CWA said in a letter to the EEOC on Oct. 6 that $18 million was "woefully inadequate" and that Activision Blizzard employees and the CWA had "grave concerns" about the settlement agreement.
On Tuesday, the court also denied former Blizzard employee Jessica Gonzalez's motion to intervene and prevent the settlement, which she deemed insufficient. Gonzalez stated that it was "disappointing and unfortunate that they denied my motion, but it will not deter me from fighting for justice."
On March 29, at 9 a.m. Pacific time, Judge Fischer will hold a virtual Zoom hearing on the settlement.
The $18 million settlement amount will also be used to establish harassment and discrimination prevention programs at Activision Blizzard, which will be audited by the EEOC. Leftover funds may be donated to charities dedicated to advancing women in gaming or raising awareness about gender equality issues, according to a news release issued to investors Monday evening. If the agreement is approved by the United States District Court for the Central District of California, Activision is legally required to deposit the funds into an escrow account within 30 days.
Activision is required to expand mental health counseling services and add a new personnel evaluation process where employees can leave feedback on their bosses as part of the agreement with the EEOC, in addition to the $18 million. The company will hire an independent equal employment opportunity expert who will report to the EEOC. The company must also provide live and interactive sexual harassment training.
The contract would be valid for three years. If Activision fails to comply, the EEOC may seek monetary redress.