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Riot Games agrees to pay $100 million in settlement of class-action gender discrimination lawsuit

(iStock/Washington Post illustration)

“League of Legends” publisher Riot Games announced Monday that it is settling a 2018 gender-based discrimination class-action suit with California state agencies and current and former women employees for $100 million. The company will pay $80 million to members of the class-action suit and approximately $20 million toward plaintiffs’ legal fees.

The Los Angeles lawsuit was filed in November 2018 by now-former employees Melanie McCracken and Jes Negrón, alleging gender discrimination as well as sexual harassment and misconduct at Riot Games. The suit was followed by two inquiries led by California state agencies. The suit came after gaming news site Kotaku published an exposé about a culture of sexism at Riot Games, which manifested itself in workplace behaviors ranging from unwanted advances and harassment to a hiring and promotion process that passed over female candidates for being insufficiently into gaming and “League.”

“This is a great day for the women of Riot Games — and for women at all video game and tech companies — who deserve a workplace that is free of harassment and discrimination,” said the plaintiffs’ counsel, the employment and sexual harassment lawyer Genie Harrison. “We appreciate Riot’s introspection and work since 2018 toward becoming a more diverse and inclusive company.”

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Riot Games agreed to settle the suit in 2019 for $10 million, but California’s Department of Fair Employment and Housing (DFEH) intervened, blocking the agreement with a court filing in which the agency argued that victims should be entitled to as much as $400 million. The DFEH posted a news release acknowledging the settlement Monday night.

The new settlement is with the DFEH, the California Division of Labor Standards Enforcement (DLSE) and certain individual claimants. All current and former California employees and contractors who identify as women and worked at Riot Games between November 2014 and present day qualify for a payout. At least 2,300 workers are eligible for part of the $80 million settlement, with those who started earlier or worked at the company longer receiving a larger allocation of the funds. Riot Games will pay into a settlement fund that will then be distributed to claimants following a court’s approval. McCracken settled out of the suit for an undisclosed figure. Riot Games declined to comment on whether certain individual plaintiffs who had entered arbitration agreements with the company would receive part of the $80 million.

In the settlement, Riot Games also agreed to certain workplace policy reforms. These include greater transparency around pay scales for job applicants, not relying on prior salary history to set employees’ pay or assign job titles and the creation of a pipeline for current or former temp agency contractors to apply to work for Riot Games. The publisher will also implement a policy requiring the presence of a woman or member of an underrepresented community on employment selection panels.

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In an email to Riot Games employees Monday night, five of the company’s executives addressed the settlement.

“We want to acknowledge that the timing of this announcement isn’t ideal. The final details of the agreement came together quickly, and we wanted you to hear about it from us directly rather than read about it in the news while on break,” the email, which was obtained by The Washington Post, read.

Company leadership wrote in the email that the number of eligible claimants has more than doubled since they hired more women at Riot in recent years.

As part of the settlement, Riot Games must be monitored by a third party for three years. That party will oversee human resource complaints, how they are handled and whether employees of all genders are being paid fairly. The third party, which could be an individual, must be approved by both the company and the DFEH. If the monitor discovers Riot Games needs to improve its practices, they can recommend changes to implement, which the judge presiding over the suit, Elihu M. Berle, may enforce.

"This historic agreement reflects California’s commitment to strategic and effective government enforcement of the State’s robust equal-pay, anti-discrimination, and anti- harassment laws,” said DFEH director Kevin Kish. “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.”

California labor commissioner Lilia García-Brower added that the collaboration between the DLSE and the DFEH "resulted in the largest [Private Attorney General Act] settlement DLSE has obtained to date,” referring to a California statute that enables workers to seek renumeration for labor violations.

While both sides have signed the agreement and filed with the court, they’re still awaiting final approval at an upcoming hearing set by the judge. No hearing date has been set yet.

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The settlement covers the 2018 lawsuit but not a harassment and discrimination suit filed against Riot Games in 2021. On Jan. 7, Riot Games CEO Nicolas Laurent, popularly known as Nicolo, was sued by a former executive assistant, Sharon O’Donnell, who alleged misconduct and unwanted sexual advances. Riot Games has vigorously denied these allegations. In March, the company announced that Laurent would remain in his position after a third-party investigation commissioned by the studio found no evidence of wrongdoing. The case has gone into arbitration, according to Riot Games.

“Three years ago, Riot was at the heart of what became a reckoning in our industry,” Riot Games wrote in a statement shared with The Washington Post. “We had to face the fact that despite our best intentions, we hadn’t always lived up to our values. As a company we stood at a crossroads; we could deny the shortcomings of our culture, or we could apologize, correct course, and build a better Riot. We chose the latter. … While we’re proud of how far we’ve come since 2018, we must also take responsibility for the past. We hope that this settlement properly acknowledges those who had negative experiences at Riot.”

Riot’s $100 million settlement comes just as the video game industry faces broad scrutiny of its workplace culture. Multiple government agencies, including the DFEH, are investigating “Call of Duty” and “World of Warcraft” developer Activision Blizzard over allegations of employee sexual misconduct and gender-based discrimination. The DFEH has similarly challenged an agreement that Activision Blizzard sought to finalize: an $18 million settlement with the federal Equal Employment Opportunity Commission. A federal judge recently blocked the DFEH’s challenge.