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Top executives at video game company Activision Blizzard are being sued by an investor over brand's reputation becoming "irreparably damaged" when the state of California sued the company over sexual harassment allegations.
The suit was filed Friday in Los Angeles by York County on behalf of the York County Retirement Fund. The complaint names several executives including CEO Robert Kotick, while accusing the board of covering up an investigation by the California Department of Fair Employment and Housing last month.
"The Board concealed from its shareholders that the Company was the subject of an investigation involving precisely the treatment of women in its workplace," the suit states. "And did so with the effect of obtaining shareholder approval for the payment of hundreds of millions of dollars to the CEO, which almost certainly not have been approved were the truth been known."
The plaintiff says that the company "now has a reputation as a hostile work environment for women" and is seeking damages and a declaration that the company will "improve its corporate governance and internal procedures.
Newsweek reached out to Activision Blizzard for comment.
Similar allegations were made in a class action lawsuit filed against the company on the behalf of investors on Wednesday. The suit alleges that Activision Blizzard executives "intended" to deceive investors and displayed "reckless disregard for the truth" while doing so. It also alleges that the company "artificially inflated" stock by withholding information about the allegations. Shares have fallen since news of the DFEH investigation emerged.
The lawsuit filed by DFEH on July 20 accuses Activision Blizzard of allowing a "frat boy" culture that turned a blind eye to the mistreatment of women to permeate within the company. Women were allegedly routinely harassed at work, paid less than their male counterparts, given fewer opportunities to advance their careers and ignored when they made complaints.
At least one instance of alleged harassment may have led to a particularly tragic outcome. A woman who had been repeatedly harassed while working at Activision Blizzard died by suicide after male co-workers passed around naked pictures of her during a holiday party, according to the DFEH suit.
In addition to misogyny, the suit alleges that racism was rife within the corporate culture. One Black female employee was allegedly required to write a summary of how she intended to spend her time away from work while requesting time off, something that was not asked of other employees.
The company initially responded to California's lawsuit with dismissive scorn, issuing a statement that complained that the "irresponsible" suit had been filed by "unaccountable State bureaucrats" and contained "distorted, and in many cases false, descriptions of Blizzard's past."
A significant number of Activision Blizzard employees did not respond favorably to the company's statement and went on to stage a mass walkout in protest. Kotick later apologized and admitted that the initial response had been "tone deaf." Blizzard President J. Allen Brack resigned from the company to "pursue new opportunities" on Tuesday.
About the writer
Aila Slisco is a Newsweek night reporter based in New York. Her focus is on reporting national politics, where she ... Read more