Equal pay settlement: What a $54M gender bias mistake looks like

Earlier this year, we told you that income-related equality was going to be one of the top employment law issues of 2023.

Now, as the year winds to a close, a new eight-figure equal pay settlement shows just how expensive paycheck-related gender bias can be.

State agency sues video game company

According to a lawsuit filed by the California Civil Rights Department (CRD), Activision Blizzard failed to provide equal pay to women in California who did substantially similar work to their male co-workers over five years, between Oct. 12, 2015, and Dec. 31, 2020.  

The suit also claimed women were denied promotional opportunities and faced additional sex-based discrimination during that timeframe.

In the CRD’s view, the alleged conduct was illegal. The agency sued Activision Blizzard, asserting violations of the state’s Equal Pay Act and its Fair Employment and Housing Act.

Hefty equal pay settlement

The CRD and Activision Blizzard reached an agreement to end the lawsuit, according to a Dec. 15 press release. Under the agreement, which is subject to court approval, Activision Blizzard will:   

• Pay approximately $54,875,000 to cover relief to workers and litigation costs. Of that, about $45,750,000 will be deposited into a settlement fund earmarked for compensating affected workers.
• Distribute any excess funds to charities focused on advancing women in the video game and technology industry and/or promoting awareness about gender equality in the workplace.
• Hire an independent consultant to review and evaluate the company’s compensation and promotion policies and to make recommendations on the company’s training materials.
• Continue its DEI efforts to include qualified candidates from underrepresented communities.

New settlement, old problem

The CRD clarified that this current settlement agreement is separate from the 2021 consent decree that Activision Blizzard entered into with the Equal Opportunity Employment Commission, which addressed sexual harassment allegations from Sept. 1, 2016, to March 29, 2022, and covered employees in Arkansas, California, Minnesota, New York, Texas and Wisconsin.  

Info: Civil Rights Department Announces Settlement Agreement to Resolve Employment Discrimination and Equal Pay Lawsuit Against Activision Blizzard, 12/15/23.