State civil rights agency may derail game company settlement, plaintiffs say

A growing tension between plaintiffs and their lawyers and California's civil rights enforcement agency is threatening to derail settlement negotiations in workplace discrimination cases against some of the world's biggest game makers, several plaintiffs' lawyers said.

At its core, the dispute highlights the gap between women and their lawyers who want to be made financially whole for discrimination they say they endured and officials at the Department of Fair Employment and Housing who are trying to bring about systemic changes to an industry they say is riddled with sexism and bias.

A key point of contention is the secrecy that companies such as Riot Games and Activision Blizzard have sought through arbitrations and nondisclosure agreements attached to settlement offers. But the women's lawyers say the Department of Fair Employment and Housing is stocked with political actors who want to control the process.

"The brave plaintiffs, the actual victims in the case, are motivated to fight alongside each other, as victims of invidious discrimination and harassment, with the goal of making Riot a better workplace for all women. They brought this case to empower women, not to disempower them as the DFEH now seeks to do," said Genie Harrison of Genie Harrison Law Firm, who is co-class counsel in a gender discrimination action against Los Angeles based Riot Games.

Kevin Kish, the director of the Department of Fair Employment and Housing, did not acknowledge tension with individual plaintiffs but said the agency's role is to prevent future violations of employment law within the industry. "Because of this special role, it is no secret that we encounter litigation tactics intended to delay, obstruct or avoid determinations on the merits of our government claims," Kish said.

"In a pattern or practice civil rights prosecution, the government's role is to safeguard the rights of all potentially aggrieved persons, not just some of them. We also must ensure the fairness of any settlement for the court," he said.

Catherine A. Conway, a partner at Gibson, Dunn & Crutcher, represents Riot Games. Elena R. Baca, of Paul Hastings LLP, represents Santa Monica-based Activision Blizzard. Both women declined to comment for this article.

In court papers, Conway and co-counsel Katherine V.A. Smith lambasted the Department of Fair Employment and Housing for its attempt to hamper settlement talks.

Smith said the department relies on its status as a public agency to justify its requests to a judge to halt mandatory settlement conferences, yet undermines the state's public policy that strongly favors private resolutions to civil litigation.

"For example, DFEH claims that Riot and private plaintiffs seek to settle claims on behalf of DFEH that only DFEH has the authority to settle. But, DFEH has argued repeatedly that its claims are separate from private plaintiffs," Smith wrote in court papers.

Riot Games and the plaintiffs have the right to strike deals, the lawyers wrote. DFEH's request is equal to "an injunction that would limit speech and legal conduct by Riot and private plaintiffs -- an unconstitutional prior restraint."

Investigations and lawsuits against game creator companies began in earnest in 2018. The plaintiffs said they were initially kept in the dark about the Department of Fair Employment and Housing investigations as they filed lawsuits and class actions. The women and the civil rights agency agree that sexual harassment and abuse of women was accepted and ingrained in some of gaming's biggest companies, leading to at least one suicide.

Riot Games agreed in 2019 to pay $10 million to settle a class action brought by women but the Department of Fair Employment and Housing intervened, saying the amount was inadequate. Los Angeles County Superior Court Judge Elihu Berle granted the department intervenor plaintiff status. Three years later, there has been no resolution to the case. Riot Games and the plaintiffs have asked Berle to allow them to proceed with a mandatory settlement conference, which DFEH strongly opposes.

Harrison said DFEH's political appointees do not answer to actual victims, and that she won't be deterred from representing the women. If the state's civil rights agency wants to help resolve the case, it is welcome to do so, she said.

Kish said the department needs more information from Riot Games to adequately analyze the claims and defenses, and decide if the settlement amount is appropriate.

The Department of Fair Employment and Housing is also accused by plaintiffs' counsel of trying to discourage female employees that sued Activision Blizzard from contacting outside private counsel. FEH v. Activision Blizzard Inc., 21STCV26571 (L.A. Super. Ct., filed July 20, 2021)

Harrison and co-class counsel Nicholas Sarris of JML Law have cited Activision emails to employees to make the case that the department is engaged in a pattern of trying to wrestle these cases from individual plaintiffs and their private counsel.

Professor Orly Lobel, who teaches employment law at the University of San Diego law school, has been tracking cases filed against gaming giants. She said agencies like DFEH and the U.S. Equal Employment Opportunity Commission have a clear role to play when allegations of systemic wrongdoing are made against a company. Litigation results swaddled in secrecy only foster systemic abuses that gave rise to the #MeToo movement, she said, and government agencies are best equipped to bring those allegations to light.

"That's a good thing, because the trend is, a lot of companies try to prevent transparency through secrecy and settlements," Lobel said.

Josh D. Gruenberg of Gruenberg Law in San Diego has represented plaintiffs in workplace litigation for nearly 30 years. Gruenberg, who is not involved in actions against Riot Games or Activision Blizzard, said he has experienced tensions between clients and enforcement agencies like the DFEH and EEOC. While he said that he believes state and federal enforcement agencies have good intentions, he also thinks they "are completely ill-equipped to accomplish anything meaningful."

Allegations of employee discrimination and harassment are often murky and difficult to prove, he said. Private counsel are often best skilled to thread through the morass to reach the best result for a victim, he said.

"Does the DFEH have the time or money to fight these? I think they do an adequate job of providing some small remedy to clear liability cases where the evidence is overwhelming," Gruenberg said. "But do they have the firepower to really dive into these cases, litigate them and ferret out the truth? My experience is, they don't."