Activision is Getting Sued In a Second State! Hooray!
Tough luck, Bobby.
Within the past year, Activision Blizzard has found itself in a tornado of sexual harassment and labor lawsuits. Notably, California’s Department of Fair Employment and Housing filed a lawsuit alleging Activision Blizzard’s “pervasive frat boy workplace culture” resulted in harassment and pay discrimination. However, the fate of that lawsuit is now under question, as one of the state’s top lawyers resigned while alleging governor Gavin Newsom was meddling in the case. Now, not to be outdone, New York City is now also suing Activision Blizzard.
NYC’s lawsuit specifically relates to Microsoft’s January 2022 announcement that it intended to buy Activision Blizzard. The announcement caused a lot of concern within the gaming community about monopolies. As with streaming and production platforms, video game companies keep buying each other up. This one, in particular, would be one of the largest mergers in the country’s history. Which is very bad. But I found myself also feeling concerned that the buyout would distract or bury the public, stockholders, etc. from Activision Blizzard’s lawsuits and failures to better their workplaces for women. Turns out, that was exactly the point.
As reported by Axios, the NYC lawsuit alleges that CEO Bobby Kotick “rushed the Microsoft acquisition in order to escape liability for misconduct at the company.” During an employee walkout in November 2021, protesters and allies insisted that Kotick was part of the problem. This has been backed by reports he knew what was happening at his company. And yet, Kotick has essentially played dumb and has refused to step down. But—surprise!—a rich white man in a position of power has secretly taken steps to escape scrutiny for wrong-doing he’s fully aware of. What a shock!
NYC’s lawsuit actually comes from the city’s retirement system and pension fund, which own stocks in Activision. Businesswire reported that the proposal was approved by Activision’s stockholders only a week ago, so very little time was wasted here. The lawsuit can exist because it alleges merger has hurt the company’s value.
The negotiations of the merger took place in November 2021, over a series of rapid-fire sessions that involved Kotick and Activision’s Board. The suit does not mince words here: “Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should have been clear to the Board that he was unfit to negotiate a sale of the Company. But it wasn’t.”
This means that Activision Blizzard now has eleven active lawsuits, plus an investigation from the Securities and Exchange Commission, plus trading inquiries from the SEC and Department of Justice. In short: Activision Blizzard is in very hot water. Seems like Kotick’s plan to sweep his involvement in workplace sexual harassment lawsuits the rug didn’t work. Aw shucks. Maybe Activision will be forced to have an equitable workplace after all.
(image: Getty Images)
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