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Activision Loses Bid to Halt Bias Suit Over Ethics Claims (2)

Oct. 22, 2021, 6:35 PMUpdated: Oct. 23, 2021, 12:30 AM

Activision Blizzard Inc. failed to convince a California court on Friday to temporarily halt an ongoing sexual harassment and discrimination case filed by the state’s Department of Fair Employment and Housing.

Activision asked the court on Oct. 19 to pause the case to give it time to investigate ethics allegations against the agency, and to potentially bring a motion to disqualify certain attorneys.

California’s civil rights agency sued the maker of Call of Duty and other video games in Los Angeles Superior Court in July, accusing the company of fostering a “frat boy” culture in which female employees are subjected to constant sexual harassment, unequal pay, and retaliation.

The state agency said its lawsuit followed a two-year investigation which found company leadership consistently failed to take steps to prevent discrimination in terms compensation, promotion, and termination, among other areas. It later accused Activision of suppressing and destroying evidence, which the game maker vehemently denied.

The company’s request to halt the case stemmed from a parallel federal lawsuit against Activision involving the U.S. Equal Employment Opportunity Commission.

That federal agency reached a proposed $18 million settlement with Activision in September to resolve discrimination and retaliation claims, but DFEH objected, arguing the deal includes a procedure to release Activision from state claims that the EEOC lacks standing to prosecute.

The EEOC asked the federal court to block DFEH’s bid to intervene in the case, claiming its investigation of Activision was directed by two lawyers who later joined DFEH and hold leadership roles in the state agency.

“After being informed of this conflict, DFEH retained new counsel but appears to have filed the present intervention motion just hours after this counsel was retained, strongly suggesting that the motion is a product of the prohibited representation,” the EEOC said in a brief.

The Los Angeles Superior Court denied Activision’s motion to stay without prejudice, but didn’t block the company from pursuing discovery on the alleged ethics violations.

Activision Blizzard didn’t provide an on-the-record statement about the Friday decision. DFEH directed a request for comment to its prior filings on the motion.

The case is Dep’t of Fair Employment and Housing v. Activision Blizzard, Cal. Super. Ct., No. 21STCV26571, 10/22/21.

(Adds response from DFEH. Earlier update added additional context.)

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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