The legal war against Activision Blizzard shows that in California the process is the punishment

When California’s Civil Rights Department opened its prosecution of Activision Blizzard in the summer of 2021, it did so with a single trumpet blast, a press release that declared the game maker “fostered a sexist culture,” “paid women less than men,” “assigned women to lower-level jobs and promote them at slower rates than men,” “fired or forced women to quit at higher frequencies than men.” Women at the Santa Monica-based firm “were subjected to constant sexual harassment, including groping, comments, and advances,” the suit alleged. Despite the second-circle of hell activities around them, the agency said “the company’s executives and human rights personnel knew of the harassment and failed to take reasonable steps to prevent the unlawful conduct, and instead retaliated against women who complained.” In its lawsuit, filed in Los Angeles superior court, the department said the entire global operation was suffused by a “pervasive ‘frat boy’ workplace culture.”

And then, on December 15, the department, by then rebranded as the state Civil Rights Department, withdrew its allegations. After two years of “investigation” and two and a half years of violent prosecution of the company, the parties had reached a settlement. Activision Blizzard will pay $54 million – and the state will admit that no investigation, including its own, substantiated any claims about a “frat boy culture,” “systemic harassment” or that the company’s leadership mishandled workplace issues. 

“No court or any independent investigation has substantiated any allegations that: there has been systemic or widespread sexual harassment at Activision Blizzard,” California admits. Nor is there any evidence “that Activision Blizzard senior executives ignored, condoned, or tolerated a culture of systemic, harassment, retaliation, or discrimination; or that Activision Blizzard’s Board of Directors including its Chief Executive Officer, Robert Kotick, acted improperly with regard to the handling of any instances of workplace misconduct.” 

Given all that, why has Activision Blizzard agreed to pay anything? 

“Because they looked at the path forward and decided that future costs of litigating against a state with unlimited resources and friendly courts was a no-win proposition,” a source close to the investigation says. After nearly six years, “simply exhausted by the experience,” Activision Blizzard saw an opportunity: of the $54 million it will pay to settle, the state will take $10 million. The company will use the remainder to boost the pay of its own female employees – employees, the state now admits, never suffered.

But that $10 million should worry companies that do business in California. It represents the state’s unique “bounty hunter” provision, a legal incentive that allows the state to profit from big-dollar settlements like this one. It also explains why plaintiffs’ attorneys all over America – and, weirdly, the New York City Comptroller – swarmed into a California court hoping to leverage the state’s bounty-hunter provision into million-dollar windfalls. Mosgt were beaten back with a stick. But not the Civil Rights Department: it will use its 10 million to pay the invoices of outside attorneys who handled the work of attempting to beat Activision Blizzard into submission. 

In California, the process is the punishment – that and about $54 million. From investigation to settlement, the state’s case had taken so long that even the players have changed. Midway through, the Department of Fair Employment and Housing rebranded itself the more noble-sounding Civil Rights Department. In October, Microsoft overcame Federal Trade Commission resistance in federal court, and closed its purchase of Activision Blizzard, makers of such world-beating games as Call of Duty, World of Warcraft, and Diablo. 

And the prosecutor who started it all, DFEH chief counsel Janette Wipper? She’s gone, after having accused Governor Gavin Newsom of interfering with her case. In fact, Newsom reportedly read (with the rest of us) that Wipper sued Activision Blizzard in violation of her agency’s agreement to share the spoils with the federal EEOC. When Wipper’s staff appeared in federal court to block the EEOC settlement, the judge brushed them off, and Newsom, reportedly furious, fired her. Measuring the rot at the state agency, we note that Wipper’s No. 2 quit immediately thereafter, echoing Wipper’s claim of gubernatorial interference. Despite the departures, the agency remained under the same management: Wipper’s boss, longtime agency director Kevin Kish, kept his job despite the obvious chaos beneath him. And so, even Wipperless, the state’s case continued on its own inertia. In a deal that looks remarkably like the state settlement, the feds ultimately settled with the computer game maker for $18 million. 

When the state first revealed its case, obliging reporters at major news outlets—including NBC, the Washington Post, Bloomberg, the Wall Street Journal, and New York Times—jumped on the story so quickly that skeptics might be excused for supposing they were watching a well-coordinated campaign. Or perhaps the reports were just delighted by a story that fit the current public mood for stories of plundering men and their female victims, including salacious tales of sex, drugs and “cube crawls” inside the world’s most prestigious gaming company. 

The state’s case “lays bare, for the public record, the gross inequalities that have long plagued a male-dominated industry that has yet to properly address its broken, sexist culture,” the Los Angeles Times explained six days later. Despite the evidence – hundreds of hyped-up, thrill-a-minutes reports – the Times could still declare that “no one seems to care.”

After years of that – after hundreds of media reports repeating, even exaggerating the state’s bogus claims against Activision Blizzard – how will the company ever restore its good name? 

Maybe never. There’s an old story young Catholics were (perhaps still are) told before their First Confession, that seems appropriate: The village’s inveterate gossip confesses his sin to the parish priest. His penance is to pray the rosary – and then rip apart a pillow in the church belfry. Baffled, the sinner obliges and returns to tell the priest that, remarkably, it worked: Watching the feathers take to the wind and fly out over the village and into the countryside was a revelation, like seeing his own once-freighted soul liberated at last. The priest listens without much interest, and then tells the sinner, “Good. Now go out and collect the feathers.”

Will Swaim is president of the California Policy Center, and cohost of National Review’s Radio Free California podcast.