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Activision Blizzard to create $18 million fund for harassment victims in federal employment agency settlement

(The Washington Post illustration; Photo by Jonathan Alcorn/Reuters)

Embattled major gaming company Activision Blizzard has agreed to create an $18 million fund to compensate harassment and discrimination victims after facing an investigation and civil rights lawsuit from the U.S. Equal Employment Opportunity Commission (EEOC).

The fund will also pay for harassment and discrimination prevention programs. Leftover funds may go to charities for advancing women in gaming or spreading awareness about gender equality issues, the company announced in a news release to investors Monday evening. Activision is legally required to deposit the funds within 30 days if the U.S. District Court of the Central District of California approves the agreement.

As part of the agreement with the EEOC, Activision is required to expand mental health counseling services and will add a new personnel evaluation process where employees can leave feedback on their bosses. An independent, equal employment opportunity expert hired by the company will report to the CEO, the company’s board of directors and the EEOC. The company must also give mandatory sexual harassment training that is live and interactive.

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The agreement is in effect for three years. If Activision does not comply, the EEOC can seek monetary relief. The EEOC declined to comment, citing ongoing litigation.

CEO Bobby Kotick emailed employees Monday about the changes, saying he anticipated more updates in the future that will be informed by “listening sessions” the company is holding. In an email viewed by The Washington Post, he wrote:

“Our goal is to make sure that Activision Blizzard becomes and remains the very best example for other companies to emulate. For those of you who have experienced harassment or discrimination and shared your experiences, please know your courage will result in a better, exemplary place for us.”

In recent months, Activision Blizzard has faced a multiyear investigation and lawsuit from California’s Department of Fair Employment and Housing alleging sexual harassment and gender-based discrimination at the company. It also continues to face an investigation from the U.S. Securities and Exchange Commission, an unfair labor practice lawsuit from its own employees and a class action suit from shareholders.

Activision Blizzard shareholder SOC Investment Group expressed skepticism over the EEOC agreement. In August, the group’s executive director Dieter Waizenegger wrote a letter urging the company to commit to further changes. The group communicates with companies on behalf of union pension funds; in this case, those funds hold an estimated 3 million shares in Activision Blizzard.

“Last night’s announcement … leaves shareholders with as many questions as answers — particularly as it relates to accountability of the board of directors,” said Waizenegger in an emailed statement Tuesday. “In our view, Blizzard’s toxic workplace culture is ultimately a consequence of board failure: Either the board failed to put in place mechanisms to ensure that it would be aware of widespread abusive workplace practices, or it was aware of those widespread abuses and decided to tolerate and accept them. In either case, going forward Blizzard needs new board leadership.”

Read more:

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Inside the Activision Blizzard lawsuit

On July 20, California’s Department of Fair Employment and Housing (DFEH) filed a lawsuit against video game publisher Activision Blizzard, alleging widespread, gender-based discrimination and sexual harassment. Here’s what you need to know:

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