State agency retains outside counsel after conflict claim in Activision Blizzard case

Facing accusations of attorney conflict of interest, the state's fair employment agency retained outside counsel to prosecute workplace discrimination claims against Activision Blizzard Inc.

The Department of Fair Employment and Housing and the game maker were set to argue before Los Angeles County Judge Timothy P. Dillon on Wednesday as to whether the state agency should be disqualified from the case or temporarily halt its enforcement action while the ethics allegations are reviewed.

The state agency initiated its enforcement action in superior court this summer against Activision Blizzard, which it accused of fostering a workplace environment rife with sexual harassment, pay inequity and gender discrimination. DFEH v. Activision Blizzard, 21STCV26571 (L.A. Super. Ct., filed July 20, 2021).

In opposition to Activision Blizzard's request for a stay, the state agency's new counsel from Outten & Golden LLP denied there was a conflict of interest. Two state agency lawyers who previously worked in the U.S. Equal Employment Opportunity Commission, when the EEOC initiated an enforcement action against the gaming company, had minimal involvement in the federal agency's probe into Activision Blizzard's workplace conduct, Outten & Golden partner Jahan C. Sagafi wrote.

"A stay of any kind would simply derail the state's important efforts to collect evidence and pursue claims to make these individuals whole," Sagafi wrote.

Rumduol Vuong and Sue J. Noh, the state agency's lawyers who formerly worked at EEOC, were not at Wednesday's hearing. After Sagafi and Outten & Golden associate Laura I. Mattes made their first appearances, the matter was continued to Friday.

The Department of Fair Employment and Housing intervened in the federal enforcement action initiated by the U.S. EEOC against Activision Blizzard, which reached a proposed settlement worth $18 million on Sept. 27. The deal is awaiting approval from U.S. Judge Dale S. Fischer of the Central District of California. The state agency argued in its motion to intervene that the deal is inadequate and would release stronger state law claims against Activision Blizzard. U.S. EEOC v. Activision Blizzard Inc., 21-CV-07682 (C.D. Cal., filed Sept. 27, 2021).

The state agency also intervened as plaintiffs in a similar workplace discrimination case against Riot Games, another game creator, after objecting to a preliminary $10 million class settlement in 2019. McCracken et al v. Riot Games, 18STCV3957 (L.A. Super. Ct., filed Nov. 6, 2018).

Genie E. Harrison of Genie Harrison Law, who represents plaintiffs in the Riot Games case, has accused the state's fair employment agency of trying to take sole control of the case, which she said disenfranchises women by preventing them from participating in settlement talks. Last month, Los Angeles County Judge Elihu M. Berle, who is overseeing the Riot Games action, ruled over the state's objection that the plaintiffs could return to settlement discussions with the company.