Following a two-year investigation, the California Department of Fair Employment and Housing (DFEH) sued the entertainment gaming giant, Activision Blizzard for systematic discrimination on July 21, 2021.
Included in the extensive complaint filed in the Los Angeles County Superior Court are allegations of “frat boy” culture, sexual harassment, unequal pay, retaliation, and gender-based discrimination.
The Washington Post says, “The lawsuit alleges that Activision Blizzard created a ‘breeding ground for harassment and discrimination’ by ignoring inappropriate workplace behavior and relegating women to low-ranking jobs with lower salaries than their male counterparts.”
To add to the severity of the situation, of Activision Blizzard’s roughly 9,500 employees, only 20% are female – further exploiting the prevalence of a wage gap disparity and lack of culture committed to diversity and inclusion. According to Bloomberg Law, who first reported on the complaint, “the company discriminated against female employees in terms and conditions of employment, including compensation, assignment, promotion, and termination.”
Activision Blizzard’s CEO, J. Allen Brack, as well as many other top-level executives, are listed in the lawsuit and are alleged for having known and enabled the workplace discrimination to persist. As we’ve seen through various studies, DEI initiatives are most effective when they come from the top-down — it’s no surprise that the allegations cite lack of commitment to workplace equality in top-level management as a factor for harboring workplace discrimination and inequality.
In the lawsuit, the DFEH is seeking “compensatory and punitive damages; unpaid wages, liquidated damages, injunctive relief, equitable relief, including but not limited to reinstatement of pay as well as other associated legal fees.”
In response to the lawsuit, an Activision Blizzard spokesperson said “We value diversity and strive to foster a workplace that offers inclusivity for everyone. There is no place in our company or industry, or any industry, for sexual misconduct or harassment of any kind. We take every allegation seriously and investigate all claims. In cases related to misconduct, action was taken to address the issue.” Adding that the DFEH was “required by law to adequately investigate and to have good faith discussions with us to better understand and to resolve any claims or concerns before going to litigation, but they failed to do so.”
Shortly after Activision Blizzard released its statement, employees from the company reacted with discontent, saying that the company’s response was “abhorrent and insulting.” Current employees have collected over 800 signatures from past and present workers for a letter that asks upper management to recognize the seriousness of the situation.
It’s worth noting that the DFEH’s official lawsuit includes Activision Blizzard’s specific pay ranges for top-level employees and pay data that reveals a stark disparity between male and female employees. California’s SB 973 pay data reporting requirements were first required this year and they’re already helping identify wage gaps in the workforce.
Employers watching from the sidelines should take note of the methodology leveraged by the DFEH for its assertion in the lawsuit. Pay equity systems and analytics play a crucial role in identifying disparities within the workplace and are an essential tool for rectifying compensation gaps.
A similar event occurred several years ago with another gaming industry giant, Riot Games. The organization harbored a “frat boy” culture where women faced significant barriers to advancement, equal pay, and job security. The DFEH originally sought $10 million in damages to women that worked at Riot within the last five years, only to redact its initial proposal, instead asserting that women could be entitled to up to $400 million, according to the Los Angeles Times.
Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.