Judge rebukes state, federal agencies for 'unseemly' dispute in Activision Blizzard case

A federal judge in Los Angeles on Monday refused to allow the state Department of Fair Employment and Housing to intervene in a proposed $18 million consent decree to resolve sexual harassment and discrimination claims the U.S. Equal Employment Opportunity Commission brought against Activision Blizzard Inc., but rebuked both sides over what has turned into a sour public dispute.

"This dispute quite frankly between the agencies is just a bit unseemly, and I feel like I should send the two of you to a mediator, never mind Activision getting involved in this," U.S. District Judge Dale S. Fischer remarked. "I don't know if there is a way to clarify this and maybe at this point it's not really relevant; maybe you're just fighting between yourselves about what 'investigation' means versus what 'prosecution' means."

The Santa Monica-based video game publisher behind Call of Duty has been subject to separate probes into its workplace culture for the last three years by the federal EEOC and the state agency. The agencies filed separate charges in 2018 accusing the gaming giant of fostering a workplace environment rife with sexual harassment, retaliation, pay inequity and gender discrimination. On Sept. 27, the EEOC and Activision Blizzard agreed to a consent decree that requires the company to establish an $18 million fund for affected workers and to change some workplace practices.

DFEH sought to intervene in the federal case earlier this year, arguing that the settlement would allow the destruction of evidence and release the company from stronger state-law claims. EEOC v. Activision Blizzard, 21-CV-7682 (C.D. Cal., filed Sept. 27, 2021). DFEH also initiated its own enforcement action against Activision Blizzard in Los Angeles County Superior Court. DFEH v. Activision Blizzard et al., 21STCV26571 (L.A. Super. Ct., filed July 20, 2021)

"I'm not going to allow the Department of Fair Employment and Housing to intervene. It's just not appropriate," Fischer of the Central District of California said during a remote hearing. The judge did, however, raise several concerns about the settlement and allowed the state agency to file an amicus brief in the future.

Fischer said she saw a disconnect between what DFEH believes is going on in the federal case, and what EEOC and Activision Blizzard say they are trying to achieve. But the judge said there are several things in the proposed decree that must be clarified before she would give her blessing.

Rejecting arguments made by Jahan C. Sagafi of Outten & Golden LLP, who represents DFEH, Fischer said "individuals have the right to settle a case at any time with anyone."

"They don't need you, they don't need the EEOC. The employee can walk into Activision tomorrow without any attorney, and settle a case with Activision Blizzard," Fischer told Sagafi.

Anna Park and Taylor Markey of the EEOC said DFEH's interest in enforcing its state law claims is already being adjudicated in superior court.

Elena R. Baca, a partner at Paul Hastings LLP who with Felicia A. Davis represents Activision Blizzard, told Fischer, "this whole exercise has been the DFEH trying to flex its muscles against the EEOC, but at the expense of Activision and its employees."

Allowing DFEH to intervene would cause confusion, and eligible employees may not step forward to benefit from the immediate relief available in the consent decree, Baca argued.

After the hearing, a spokesperson for DFEH tried to cast a positive light on the ruling.

"The DFEH agrees with the Court that Activision Blizzard's proposed consent decree cannot be approved in its current form and is grateful that the Court has provided a mechanism for DFEH to file a brief setting forth our concerns on the record," Fahizah Alim said. "We look forward to reviewing the modified consent decree."

Relations between DFEH and EEOC turned increasingly hostile in recent months, as both have tried to decide how to best prosecute the gaming industry. In October, the EEOC accused the state agency of having a conflict of interest because two of its attorneys formerly worked at the federal agency and participated in its investigation into Activision Blizzard. The state agency rejected the allegations but hired Outten & Golden to represent it in the federal action.

gina_kim@dailyjournal.com