Executives at Activision Blizzard are weighing a possible countersuit against a California state agency that had claimed the gaming giant had a toxic “‘frat boy’ workplace” — only to drop its litigation last week, On The Money has learned.
The California Civil Rights Department, which had been investigating the company behind “Call of Duty” and “Candy Crush” since 2021, dropped its explosive allegations Friday.
“No court or any independent investigation has substantiated … systemic or widespread sexual harassment,” the agency admitted in court papers last week.
California’s stunning admission also acknowledged there was no evidence that “senior executives ignored, condoned, or tolerated a culture of systemic, harassment, retaliation, or discrimination” and that neither the Activision board or CEO Bobby Kotick improperly handled complaints of misconduct.
Nevertheless, Activision still ended up paying a $54 million settlement — $47 million of which is going to alleged pay disparities — to settle the litigation.
“Reputationally the most important thing was for the agency to acknowledge there was no wrongdoing” when it came to harassment, a source close to Activision said.
Some angry Activision executives are drafting a defamation suit against the agency.
The former head of the agency, Janette Wipper, was fired by Gavin Newson a year after she sued Activision for accusing Tesla of “racial discrimination,” — a claim that also proved to be unsubstantiated, according to court papers.
Other Activision insiders prefer to simply put this chapter behind them, concerned that an appeal would be tantamount to going back into the belly of the beast, insiders say.
Accusations that women were “subjected to constant sexual harassment, including groping” and management fostered a “sexist culture” were enough to push the company’s market cap $20 billion lower over the span of several months.
The lawsuit helped precipitate Activision’s tie-up with Microsoft which won full regulatory approval earlier this year.
According to reports, Microsoft pursued the $75 billion deal after seeing the “Diablo” maker’s stock drop precipitously.
A spokesperson for Activision declined to comment.