Lawyer says state agency is ‘hunting’ Activision Blizzard

Activision Blizzard Inc. has accused the state's fair employment agency of "hunting for something else" after it discovered that there were no significant pay disparity between female and male employees in its investigation into gaming giant's workplace culture.

The video game publisher behind Call of Duty has been subject to separate investigations into its workplace for the last three years by the U.S. Equal Employment Opportunity Commission and the California Department of Fair Employment and Housing. The agencies filed separate charges against the company in 2018 for allegedly fostering a workplace environment that discriminated against anyone who was not a straight male. Aggrieved workers alleged they were subject to sexual harassment, retaliation and pay inequity.

The federal and state agencies entered a workshare agreement and split responsibilities so as to not overlap enforcement or re-victimize employees in their respective probes. The state agency agreed to investigate pay and promotion claims, while the federal agency took over harassment claims.

But then relations between the agencies turned sour.

Last month, the Department of Fair Employment and Housing sought to intervene in a proposed settlement struck between Activision Blizzard and the U.S. EEOC, maintaining the deal would harm employees, allow for the destruction of important records and release stronger state-law claims for victims. According to the settlement, Activision Blizzard agreed to change its practices and set aside $18 million in a fund. U.S. EEOC v. Activision Blizzard Inc., 21-cv-7682 (C.D. Cal., filed Sept. 27, 2021)

Activision Blizzard's attorney Elena R. Baca of Paul Hastings LLP asked U.S. Judge Dale S. Fischer of the Central District of California in court papers not to allow the state agency to intervene in the case. The company's pay data turned over to the state agency revealed there were no statistically significant pay disparities among employees based on gender, Baca wrote. The state agency should have stopped its inquiry at that time, she said.

"Instead, perhaps realizing the issues it agreed to handle -- as its share of the investigation division with the EEOC -- were dead ends, DFEH began hunting for something else to investigate, even if it meant violating its agreement with the EEOC," Baca wrote.

In June, the state department became "apparently worried" that a deal was nearing soon with federal regulators, and "maneuvered again," Baca wrote. The state agency began its own enforcement action against Activision Blizzard in Los Angeles County Superior Court a few weeks later. DFEH v. Activision Blizzard Inc. et al., 21STCV26571 (L.A. Super. Ct., filed July 20, 2021)

The state agency's lawyers at Outten & Golden LLP argued that the agencies coordinated a workshare deal only for the purposes of sharing resources and information, but that it never delegated state law enforcement authority to the U.S. EEOC.

The department could not be reached for comment Thursday due to the Veterans Day holiday.

Contrary to the state's arguments, the federal consent decree offers the choice for aggrieved employees to release any state law claims, Baca said. There are no penalties for anyone who wants to reject the settlement and pursue claims individually, according to Baca. The state agency has no legitimate basis to intervene.

Allowing the Department of Fair Employment and Housing to intervene in the case would open the door for other entities to hamper federal settlement efforts in the future, Baca wrote.

"DFEH claims it is doing so to protect California's 'interest in robust enforcement of antidiscrimintion law' but once the rhetoric is stripped away, the real reason for opposing is clear: DFEH seeks to take for itself the powers of the EEOC and be the ultimate arbiter of any employment law settlement impacting California employees," Baca wrote.