Riot Games to pay $100M to women employees, contractors

After opposing a previously negotiated $10 million settlement between Riot Games Inc. and a class of women who alleged systemic discrimination and harassment, the state Department of Fair Employment and Housing and the class' new attorney announced that the game creator agreed to a consent decree that will require it to pay more than $100 million, and roll out a more robust equity and inclusion protocol.

Monday's announcement, which must be approved by Los Angeles County Judge Elihu M. Berle, was a vindication for the state agency, which has insisted the previous deal did not go far enough to bring lasting changes to the game publishing industry, which critics have said is rife with sexism.

"If entered by the court, this decree will compensate employees and contractors affected by sex discrimination and harassment, ensure lasting change in this workplace, and send the message that all industries in California, including the gaming industry, must provide equal pay and workplaces free from discrimination and harassment," the state agency director, Kevin Kish, said in a statement.

Genie Harrison, who with co-counsel Joseph M. Lovretovich and Nicholas Sarris of JML Law began representing the private plaintiffs in 2020 and immediately moved to nix the proposed $10 million deal, said it was the largest pretrial equal pay class action settlement in history.

"I'm incredibly proud and honored to have been hired by the plaintiffs in this case and given the opportunity to do my best to achieve justice on their behalf," Harrison said. "The women of Riot Games who stood up and demanded equality and equal pay and who didn't back down are the ones who get all the credit."

Riot, represented among others by Katherine V.A. Smith of Dunn & Crutcher LLP, said given the tens of millions of dollars it already spent each year on lawyers -- "money we'd rather pay to the women in the class and to invest in Riot's future" -- it became clear that a settlement would be the best outcome.

"We hope this settlement properly acknowledges those who had negative experiences at Riot," the company said in a letter to its staff published online. "We also hope it demonstrates our desire to lead by example in our industry, and symbolizes a moment where we move forward as a united company that always strives to do better for Rioters and players."

Filed in 2018, the class alleged equal pay violations, gender and sex discrimination, sexual harassment, and retaliation. Previous plaintiffs' counsel from Rosen Saba LLP negotiated a $10 million settlement and filed a motion for preliminary approval, shortly after the lawsuit was filed. McCracken v. Riot Games, 18STCV03957 (L.A. Sup. Ct., filed Nov. 6,2018).

Under the consent decree, Riot agreed to pay $80 million to compensate nearly 1,100 female employees and 1,300 female contract workers and $20 million in attorney fees. This amount includes $4 million in penalties under the Private Attorney General Act, one of the largest such penalties assessed by the Division of Labor Standards Enforcement in its history, according to the agency, which also intervened.

Riot also agreed to create a $6 million cash reserve for each year of the three-year term of the consent decree, for a total of $18 million to fund diversity, equity, and inclusion programs and to hire a third-party independent expert to conduct sex and gender equity analysis of the company's hiring and promotion practices. The company will make 40 full-time engineer, quality assurance or art design positions available to qualified class members who worked as temporary contractors, according to the state.

The deal was reached after nearly three years of litigation, over 200 witness interviews by plaintiffs' counsel, intervention by two government entities, private mediation, and six sessions of formal settlement conferences presided over by Los Angeles County Judge Daniel Buckley and private mediator Mark Rudy of Rudy, Exelrod, Zieff & Lowe LLP.

A hearing is scheduled for Jan. 26, 2022, during which Berle is expected to consider the settlement.