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Business litigation can even hit video game companies

On Behalf of | Sep 1, 2021 | Uncategorized |

When we think about video game companies, we often think of fun work environments, like companies filled with people playing video games, a lot of bean bags, food trucks, etc. Though, apparently, not all is well in the corridors of Activision Blizzard, one of the world’s largest video game companies.

Lawsuit

Recently, the California Department of Fair Employment and Housing sued the company. The lawsuit was filed after a two-year investigation done by CDFEH, and the agency is still investigating the company for additional violations. CDFEH accused the company of creating a “breeding ground for harassment and discrimination against women.” This included inappropriate conduct by executives and creating a culture that made joking about rape routine.

Internal issues

After the lawsuit was filed, thousands of former and current employees crafted an open letter to the company, which was also released to the media. It supported the lawsuit, demanded change and said that the employees did not believe the current executive team had the employees’ safety and best interests at heart. Current employees went even further recently by releasing their individual pay en masse to show pay inequities. And, at least one executive, J. Allen Brack (Blizzard’s head), resigned.

Shareholder issues

Activision Blizzard’s own investors are also attacking. The investor group, Strategic Organizing Center Investment Group, which represents several pension funds that cumulatively own about 0.4% of the company’s outstanding shares, has been fighting with the company, even before the lawsuit was filed.

They have been pushing the company to hire more women, including adding more women to the executive team, submit to a company-wide equity review and claw-back and reduce/eliminate executive compensation. This all serves as a reminder for American Fork, Utah, business owners that business disputes and litigation can spiral out of control quickly.