Activision Blizzard Strikes An $18 Million Deal Over Its Workplace Harassment Lawsuit

Popular game maker Activision Blizzard reached an $18 million settlement with the U.S. government over allegations of sexual harassment and discrimination against female employees at the company.

Activision Blizzard, which is behind the hugely popular game franchises Call of Duty, World of Warcraft, and Candy Crush, confirmed the deal was reached with the U.S. Equal Employment Opportunity Commission (EEOC) on Monday. Earlier that day, the agency filed a civil rights lawsuit against the company in federal court in California.

In a seven-page complaint, the EEOC accused Activision Blizzard of failing to address claims made by employees about sexual harassment. The video game maker also allegedly discriminated against pregnant employees. If workers who suffered from harassment or discrimination complained, the company fired them, the EEOC says.

As part of the deal struck with the employment watchdog, Activision Blizzard agreed to use the $18 million to compensate eligible employees who were harassed or faced discrimination. The company also agreed to strengthen its workplace anti-harassment and anti-discrimination policies and programs.

Activision Blizzard said it is also developing an initiative to create software tools and training programs to improve workplace policies and practices for other tech employers.

CEO Bobby Kotick said in a statement Monday, "There is no place anywhere at our company for discrimination, harassment, or unequal treatment of any kind, and I am grateful to the employees who bravely shared their experiences. I am sorry that anyone had to experience inappropriate conduct, and I remain unwavering in my commitment to make Activision Blizzard one of the world's most inclusive, respected, and respectful workplaces."

Kotick added, "We will continue to be vigilant in our commitment to the elimination of harassment and discrimination in the workplace. We thank the EEOC for its constructive engagement as we work to fulfill our commitments to eradicate inappropriate conduct in the workplace."

In court documents, however, Activision Blizzard denied any wrongdoing.

Activision Blizzard is still facing other complaints by regulators

The EEOC said its lawsuit followed a three year long investigation, which went on during similar inquiries by other state and federal regulators.

Allegations emerged months agofollowing investigations by California regulators claiming Activision Blizzard fostered a "frat boy" culture.

Women were paid less than men and were assigned to lower level jobs, according to complaints to regulators in California. Female employees were also allegedly subjected to sexual harassment, which included comments about women's bodies and rape jokes, and groping.

In late July, California's civil rights agency sued the company, alleging gender discrimination and sexual harassment. Employees also staged a walkout to protest Activision's sexist culture.

The company is also facing complaintsby the U.S. Securities and Exchange Commission over its handling of the harassment and discrimination allegations. Representatives for Activision Blizzard said last week they are complying with an SEC subpoena.

The labor union, Communications Workers of America, filed a complaint earlier this month with the National Labor Relations Board, accusing the game giant of violating federal labor law. Among the complaints are that managers threatened workers at the company against discussing wages, hours, or working conditions.

Additionally, a shareholder lawsuit in August saidthe company failed to disclose to investors that it was being investigated in California and that it had workplace culture issues that could result in legal problems.

According to the New York Times, Activision Blizzard has since made two big hires including a new head of human resources in an effort to show its attempting to address its culture.

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