Activision says company leaders didn’t ignore harassment

Outside experts tapped by Activision to investigate allegations of misconduct at the company found no evidence of systemic problems or board cover-ups, the games publisher said this morning in a letter from its board of directors.

Why it matters: The game-maker is playing defense, offering its take on allegations that have shaken the company, its workers and the games community since the filing of a discrimination lawsuit by the state of California last summer.

State of play: Activision is facing myriad lawsuits, investigations and employee protests over its workplace culture, as it attempts to prove that it is improving while also trying to win regulatory approval for a $69 billion sale to Microsoft.

• Last fall, it agreed to settle a harassment lawsuit with the EEOC, consenting to three years of federal oversight and the establishment of an $18 million victims fund for current and former workers.
• It has more aggressively sparred with California’s Department of Fair Employment & Housing, whose summer 2021 lawsuit accused the company of fostering a “pervasive frat boy workplace culture” in which women were subjected to harassment by inebriated male colleagues and were promoted more slowly than their male counterparts.

What they’re saying: “The Board and its external advisors have determined that there is no evidence to suggest that Activision Blizzard senior executives ever intentionally ignored or attempted to downplay the instances of gender harassment that occurred and were reported,” the letter states.

• “While there are some substantiated instances of gender harassment, those unfortunate circumstances do not support the conclusion that Activision senior leadership or the Board were aware of and tolerated gender harassment or that there was ever a systemic issue with harassment, discrimination or retaliation.”
• Those statements amount to a denial of a November Wall Street Journal report stating that CEO Bobby Kotick was aware of and downplayed issues of sexual misconduct at the publisher.

The board also cites a report it commissioned from former Equal Employment Opportunity Commission chair Gilbert Casellas, who “concluded that there was no widespread harassment, pattern or practice of harassment, or systemic harassment at Activision Blizzard or at any of its business units” in the U.S. from late 2016 through the end of 2021.

Today’s letter criticizes the DFEH for trying to block the EEOC settlement and blames much of the “unrelenting barrage of media criticism” against the company on California’s “highly inflammatory, made-for-press allegations.”

• The most volatile allegation in the suit, that a former employee died by suicide after being sexually harrassed by an Activision superior, led to a wrongful death suit against Activision from her family in March. Two months later, it was dismissed at the family’s request.

• The company is also being investigated by the SEC regarding its top executives’ and board’s handling of misconduct reports.

Between the lines: The board’s letter lists changes the company has made, including the expansion of oversight and new policies about alcohol consumption at work events.

• It also attempts to bridge the gap between its conclusions and the experiences cited by former workers throughout the past year.
• "What we have come to realize over the past several months is that there are many truths about our company – individual and collective, experiential and data-driven – and sometimes they can be difficult to reconcile."
• "For any individual who ever experienced inappropriate workplace conduct, best-in-class policies and data showing progress provide little comfort."

What’s next: At next week's annual meeting, Activision’s shareholders will vote on the makeup of the company’s board.

• Next month, per Activison’s agreement with Microsoft, it will be eligible to restore Kotick’s salary, which was lowered drastically last October, and issue new bonuses. That's if the board determines that the company has sufficiently improved its workplace culture.

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