: Activision Blizzard responds to harassment allegations, slams media and California civil rights agency

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Activision Blizzard Inc. shed light on its response to allegations of sexual harassment and discrimination in a regulatory filing Thursday, which slammed sections of the media and California’s Department of Fair Employment and Housing, or DFEH.

“Over the years the company has appropriately disciplined and exited employees to ensure that our practices match our policies,” Activision said, in the filing. “There simply is no room at Activision Blizzard for anyone who does not practice our corporate value of providing a safe, inclusive and welcoming workplace that serves as a model for our industry.”

Activision stock fell 1.7% to $74.11 Thursday. The company is being acquired by Microsoft Corp. in a deal valued at $68.7 billion that was announced in January.

See Now: Activision Blizzard says review found no evidence senior execs ignored or downplayed gender harassment

Since 2018 Activision Blizzard
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has been engaging with both the federal Equal Employment Opportunity Commission, or EEOC, regarding workplace issues, and the DFEH, regarding pay equity, it said.

“We have made significant progress,” Activision added. “The company engaged a wide-ranging team of advisers to assist in this effort, from law firms to experts in workplace issues.”

Last year Activision fired several unnamed employees and reprimanded others connected to allegations of sexual harassment and discrimination earlier that year, according to a media report.

However, the company has clashed with the DFEH, which is the state agency charged with enforcing California’s civil rights laws.

See Now: Activision Blizzard fires, reprimands several employees over harassment, discrimination allegations

In July 2021 the agency filed a civil suit against Activision, which alleged that female employees were subject to discrimination over pay and promotions as well as subjected to sexual harassment. The suit also said the video game publisher was aware of the alleged issues but didn’t do enough to prevent it. In response to the lawsuit, Activision released a statement that it contained “distorted, and in many cases false descriptions of Blizzard’s past.”

More than 2,000 current and former Activision employees signed a letter decrying the company’s response to the lawsuit, according to reports.

In September 2021 Activision was hit with a federal labor complaint alleging mistreatment of employees protesting against the company’s response to sexual harassment and discrimination allegations.

Activision’s board and its advisers have “diligently reviewed” allegations by the DFEH and the media, the company said in its regulatory filing Thursday.

“Contrary to many of the allegations, the board and its external advisers have determined that there is no evidence to suggest that Activision Blizzard senior executives ever intentionally ignored or attempted to downplay the instances of gender harassment that occurred and were reported,” the company said. “That work also has not unearthed any evidence, directly or indirectly, suggesting any attempt by any senior executive or employee to conceal information from the board.”

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After what Activision described as an exhaustive review, outside advisers determined the board “never intentionally ignored or attempted to downplay the instances of gender harassment that occurred and were reported,” the filing said. “The review of contemporaneous documentation and statements by relevant individuals shows that media criticism of the Board and Activision Blizzard senior executives as insensitive to workplace matters is without merit.”

While there were some substantiated instances of gender harassment, “those unfortunate circumstances do not support the conclusion that Activision senior leadership or the board were aware of and tolerated gender harassment or that there was ever a systemic issue with harassment, discrimination or retaliation,” Activision added.

Activision said it has been subject to an “unrelenting barrage” of media criticism that attempts to paint the company with “the stain” of a very small portion of the employee population who engaged in bad behavior and were disciplined for it.

“Much of this originated with the highly inflammatory, made-for-press allegations of the DFEH,” Activision added. “As our outside advisers made clear, the DFEH was not assigned to investigate harassment in its agreement with the EEOC, nor did it in fact complete an investigation into issues of harassment at Activision Blizzard.”

The company said there has also been no court finding, verdict, or ruling concluding the DFEH allegations to be true.

See Now: Activision Blizzard hit with federal labor complaint alleging mistreatment of protesting employees

The DFEH has yet to respond to MarketWatch’s request for comment on the Activision filing.

Activision also engaged Gilbert Casellas, a former chair of the EEOC to conduct a review of collected investigated reports of gender harassment from across the United States between Sep. 1, 2016 and Dec. 31, 2021.

“Based on his review, Mr. Casellas concluded that there was no widespread harassment, pattern or practice of harassment, or systemic harassment at Activision Blizzard or at any of its business units during that time frame,” the company said, in its filing. “Mr. Casellas further concluded that, based on the volume of reports, the amount of misconduct reflected is comparatively low for a company the size of Activision Blizzard.”

Last year Activision agreed to pay $18 million as part of a settlement with the EEOC. In its filing Thursday, the company said the settlement is already available for eligible employees to submit claims.

Activision also criticized the DFEH over its response to the EEOC settlement.

“The DFEH’s efforts to interfere with the EEOC settlement, which was determined to be fair and reasonable by a federal court, have been denied six times,” it said. “That said, rather than dismiss these criticisms, the board and management have taken these allegations seriously and according to outside advisers, have investigated these appropriately.”

Activision shares have gained 11% in the year to date, while the S&P 500
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has fallen 23%.

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