Videogame maker Activision Blizzard has reportedly agreed to pay around $50 million to settle a California civil-rights lawsuit over employee complaints of sexual harassment, discrimination and pay disparities that helped trigger the company’s acquisition by Microsoft.
The settlement is expected to resolve the lawsuit filed against the “Call of Duty” videogame studio by California’s Civil Rights Department in 2021, the Wall Street Journal reported Friday afternoon, citing people familiar with the matter. The complaint was one of several high-profile investigations by both state and federal regulators in recent years into alleged workplace misconduct at Activision and failures by its leadership to respond appropriately.
While Activision repeatedly denied the allegations, they ramped up pressure on the Santa Monica, Calif.-based company and its CEO, Bobby Kotick, and eventually led to a $68.7 billion takeover bid by Microsoft
MSFT,
in January 2022. The acquisition closed this October after receiving approval by U.K. and E.U. antitrust regulators, though the U.S. Federal Trade Commission continues to challenge the deal in court. Kotick is expected to leave the company, which he led for more than three decades, at the end of this year.
The settlement would be the second-largest ever for the California Civil Rights Department, according to the Journal, after its $100 million agreement with another Los Angeles-area videogame developer, Riot Games, to resolve gender-discrimination allegations in 2021. The agency had initially sought a much-larger settlement with Activision, the publication reported, citing how the state had estimated the company’s liability at nearly $1 billion to some 2,500 employees with potential claims.
Representatives for Activision and the California Civil Rights Department could not immediately be reached for comment.