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Activision Accused of Shredding Evidence, Obstructing Probe (2)

Aug. 24, 2021, 11:15 PMUpdated: Aug. 25, 2021, 2:48 PM

California’s civil rights enforcement agency is alleging Activision Blizzard Inc. retaliated against employees who aided its investigation into sexual harassment and bias at the video-game giant and suppressed evidence, including destroying documents, in an amended complaint filed in state court.

The California Department of Fair Employment and Housing sued the World of Warcraft-maker in July, alleging it fosters a “frat boy” culture in which female employees are subjected to constant sexual harassment and are discriminated against in compensation, promotion, and termination.

On Monday, the agency added to the allegations, claiming the company failed to maintain documents related to internal investigations and complaints, some of which were allegedly shredded by human resources personnel. Emails are deleted 30 days after an employee’s separation from the company, the complaint says.

The game maker disputed the new allegations. “With regards to claims that we have destroyed information by shredding documents, those claims are not true,” the company said in a statement. “We took appropriate steps to preserve information relevant to the DFEH investigation.”

Activision Blizzard shares fell almost 1 percent to $81.08 as of 10:30 a.m.

The agency’s lawsuit followed a two-year investigation which concluded company leadership failed to prevent discrimination, harassment, and retaliation. DFEH is suing on behalf of female employees, seeking unpaid wages and punitive damages, among other relief.

In the amended complaint filed Monday in Los Angeles Superior Court the agency added a cause of action for failure to maintain and produce records. DFEH said it requested documents and communications pertaining to complaints made by Activision Blizzard employees, and the company’s investigations into such complaints. It also sought documents and correspondence related to pay equity analyses, and waivers signed by employees.

The video game maker refused to produce the requested documents, the agency’s amended complaint alleges, and asserted they didn’t exist, or were privileged and confidential because attorneys were involved in the receipt of complaints and investigations.

Activision Blizzard “thereby suppressed evidence and interfered with a government investigation,” the complaint says.

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According to DFEH, the company took several adverse actions during the agency’s investigation against employees who assisted with the probe.

The agency also took aim at Activision Blizzard’s actions since the initial filing, targeting the company’s announcement in July that it retained law firm Wilmer Cutler Pickering Hale and Dorr to investigate its corporate culture.

The firm’s confidential investigation will be withheld from DFEH, the agency claimed, and therefore directly interferes with the agency’s mandate to investigate, prosecute, and remedy discrimination and harassment violations.

DFEH’s amended complaint also alleges Activision Blizzard solicited employee waivers, nondisclosure agreements, nondisparagement agreements with severe penalties, and “secret” settlements. Among the agreements are those requiring employees to notify the game maker before speaking to DFEH about violations, and preventing them from criticizing the company’s policies or standards of conduct, the agency said.

Activision Blizzard said it had complied with “every proper request” in support of the agency’s review, and has implemented changes to hiring and recruiting, team structure, reviews, and pay transparency.

“We have provided the DFEH with clear evidence that we do not have gender pay or promotion disparities,” a spokesperson said. “We share DFEH’s goal of a safe, inclusive workplace that rewards employees equitably and are committed to setting an example others can follow.”

WilmerHale did not immediately respond to a request for comment.

DFEH is also involved in litigation against Riot Games Inc.

The case is Cal. Dep’t of Fair Emp. & Hous. v. Activision Blizzard Inc., Cal. Super. Ct., No. 21stcv26571, 8/23/21.

((Updates with shares in fifth paragraph.))

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com

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