From Then to Now, the Activision Blizzard Scandal

Activision Blizzard has faced a series of big changes in the past year. It all started in July of 2021, with a lawsuit citing numerous cases of sexual harassment and deplorable workplace culture. Since then, a lot has occurred, but this year, another shocking event took place: Microsoft moved to acquire Activision Blizzard.

The purchase of the company will position Microsoft as one of the largest companies in the video game industry. However, it has a lot of people asking why they would choose to make the purchase amidst the ongoing situation at Activision Blizzard. You can find everything that has happened since the lawsuit below.

Activision Blizzard Was Sued by California — July 2021

On July 20th, 2021, the state of California filed a lawsuit against Activision Blizzard. However, the action did not come suddenly, occurring after a two-year investigation into the company by California’s Department of Fair Employment and Housing (DFEH).

The workplace culture of the company received particular attention, with it being said that the company fostered a “frat boy” culture. Within that culture came unequal pay for female employees and sexual harassment reported by both men and women. Moreover, it affected employees at all levels of employment.

Making matters worse, nobody among the company’s leadership stepped up to do or say anything about it. Because of management’s lack of response, instances of drinking, harassment, and many other instances of the company failing to uphold basic workplace protections for its female employees.

The Company Responded Poorly

The day after the lawsuit, the company released an official statement, but it did not help the situation. In fact, the statement heavily criticized the DFEH and its investigation. Not only did the company claim that the investigation was done in an unprofessional manner, but it said the lawsuit included distorted and false claims.

One particular complaint from the company included the DFEH mentioning an employee who committed suicide. The vent in question happened on a work trip, where, allegedly, a male supervisor brought sexual items with him.

And it did not end with the company condemning the DFEH. Activision Blizzard opposed the claims by saying it had a strong commitment to diversity, equity, and inclusion. However, after hearing these things, the employees at the company no longer remained silent.

More than 2,000 employees signed an internal letter, including those currently working for the company and former employees. The letter criticized the statement and expressed their lack of faith in the company’s leaders.

It did not take long for Blizzard’s president, J. Allen Brack, to respond to the employees. The very next day, he sent out emails to the staff, though he spoke nothing of the legal case. Instead, he spoke toward a commitment to improvement and his disdain for “bro culture.” Unfortunately, his was not the only voice reaching employees’ inboxes.

Another person also sent emails out on the same day, Fran Townsend. The company executive and former homeland security advisor to George W. Bush shared her beliefs, but they took on an entirely different tone. Her attitude about the lawsuit and support for the company only caused employees to grow further incensed.

Employees Staged a Walkout and Listed Demands

After the initial announcement of the lawsuit and the response from Activision Blizzard and Blizzard’s executives, many things happened. Former executives and employees spoke out. Many of them, including Blizzard co-founder and ex-CEO Mike Morhaime, expressed regret and apologized for failing the employees.

The company also began to remove inappropriate content from World of Warcraft. The removed content included references to developers and team members named in the lawsuit. But despite the statement and action, very little changed. Employees simply felt as if the allegations were not being taken seriously enough. So, they staged a walkout.

Although the CEO, Bobby Kotick, issued a response that condemned the initial response and promised action, it was not enough. The demands were not met, and the walkout commenced. The demands included:

• An end to mandatory arbitration clauses in employee contracts
• A change in hiring policies agreed upon by the employees
• Publication of compensation data for employees of all genders
• Third-party auditing of the reporting structure, HR, and executive staff

The employees received support for their walkout, including a signed letter from Ubisoft employees. Moreover, Blizzard offered paid time off for those who wanted to participate in the walkout.

J. Allen Brack Stepped Down — August 2021

Information continued to surface about misconduct and incidents centered around Blizzard. The reports included a potential employee harassed by recruiters. The company also confirmed that a former senior creative director, Alex Afrasiabi, was terminated due to his mistreatment of employees.

The creative director was even involved in something called the “Cosby Suite,” a hotel room used for networking. Blizzard employees gathered in the room, where they posed with a picture of Bill Cosby.

The information supported the allegations and showed just how deep-rooted the problems were. In fact, even Blizzard’s president, J. Allen Brack, received criticism for his lack of action against Alex Afrasiabi despite complaints. Then, on August 3rd, 2021, J. Allen Brack stepped down, announcing his intention to pursue new opportunities.

Employees Rejected CEO’s Choice of Law Firm

CEO Bobby Kotick retained the services of WilmerHale around the time of the first employee walkout. The purpose of the firm’s involvement was to review policies and procedures. However, employees from across Activision Blizzard formed a coalition and sent a joint letter speaking out against the law firm chosen by Kotick.

The ABK Workers Alliance, as the group called themselves, criticized the choice for several reasons. The first was the law firm’s involvement in preventing Amazon workers from unionizing. Clearly, it felt like a threat to the very solidarity allowing them to stand up to the injustice suffered at the company.

Additionally, the employees spoke out about Kotick not properly addressing the demands posed during the walkout. The letter went into more detail about both situations, but the message was clear: they expected better.

Activision Blizzard Faced Fallout

After Brack left, Blizzard appointed Jen Oneal and Mike Ybarra as co-leaders of the company. Even then, specifics concerning the lawsuit were mostly avoided by the co-leaders and CEO. But investors were clearly unhappy, leading to a class action due to the fall in share price.

Advertisers associated with the Overwatch League, a competitive Esports league, began to distance themselves. Included in those taking a step back from the company in the wake of the issues was Coca-Cola.

Moreover, a week after the initial blowback from investors, an investment group, SOC, criticized Blizzard’s response to everything. As a shareholder of the company, SOC demanded more. The letter included support of the ABK Workers Alliance and lists out changes Blizzard should make to address the issues seemingly being ignored.

Accusations of Document Shredding Appeared

Although the company denied the accusations, the DFEH updated its lawsuit to include document shredding. According to the DFEH, documents and records were not properly maintained. They even accused the company of withholding key documents and deleting emails 30 days after employees left.

In addition to the new allegations, the DFEH added temporary workers to the complaint. While that might not be surprising considering reports of even recruiters showing inappropriate conduct, it opened up many new potential incidents.

A few days later, Blizzard and Overwatch developers announced the name change of McCree, an Overwatch character named after Jesse McCree, a former employee at Blizzard who left the company earlier in the month. The reason for the change was information coming to light about McCree’s involvement in the “Cosby Suite.”

Outside Help Was Brought In to Rebuild Trust — September 2021

With things continuing to worsen, Activision Blizzard decided to bring in outside help. They hired Julie Hodges, a former Disney executive. She took on the role of Chief People Officer. The hope was that she could promote a more inclusive workplace.

Hodges came in with a wealth of experience, spending 21 years as an HR executive at The Walt Disney Company. The company announced its intention to let her oversee things like diversity, equity, inclusion, and employee experience.

The Company Faced Accusations of Union Busting

Unfortunately, the good start in September only lasted about halfway through the month. On September 14th, members of the ABK Workers Alliance sent a letter to the National Labor Relations Board (NLRB). They accused the company of union-busting, even saying that Activision Blizzard went so far as to intimate workers.

The complaint included allegations of the company using coercive tactics to stop employees from standing together. Specifics include a social media policy, active monitoring, and telling employees not to discuss wages and working conditions.

The SEC Investigation Began

The Securities and Exchange Commission announced that it was actively moving forward with an investigation of its own on September 20th. The subject of the investigation was how the company handled the allegations laid against them, including sexual misconduct and workplace discrimination.

The investigation included subpoenaing CEO Bobby Kotick, along with the company. They requested a number of files, including personnel files and documents from board meetings. They even asked for communication logs of anything related to the allegations between the CEO and other executives.

Around the same time, it was reported that the company was in settlement talks with the Equal Employment Opportunity Commission (EEOC).

Equal Opportunity Commission Lawsuit Was Settled

Although there was talk about the EEOC’s investigation the week before, on September 27th, it became official. The complaint filed came after an investigation that lasted almost three years.

During the investigation, the EEOC found evidence of harassment and unequal pay. It also surfaced that anyone who did complain received retaliation from the company, violating acceptable practices.

The EEOC demanded compensation for the employees, to which Activision Blizzard responded by creating a fund to compensate affected individuals. The fund contained $18 million dollars and came with the promise to change their policies and practices. They even added a third-party consultant to review the future initiations.

Lawsuits Hit a Snag — October 2021

Not everything went smoothly with the U.S. Equal Employment Opportunity Commission settlement. In fact, friction appeared between the EEOC and California’s Department for Employment and Housing, with the DFEH objecting to the settlement based on how it might affect their own case.

However, in response to their objection, the EEOC brought quite a few pieces of information to light, including the fact that two DFEH lawyers previously worked with the EEOC. Not only did they work for the EEOC, but they were involved in the investigation into Activision Blizzard.

While the DFEH claimed the lawyers had already been replaced, the EEOC continued to make their case. At the time, some were worried about what the conflict of interest might do to the original lawsuit against the company.

Despite the snag, by the middle of October, the company reported firing more than 20 employees involved in the allegations. Additionally, over 20 more faced other disciplinary actions. The company even canceled BlizzConline, deciding to focus elsewhere in the wake of everything happening.

Allegations Surfaced Against CEO Bobby Kotick — November 2021

In early November, Jen Oneal, one of the co-leaders of Blizzard after Brack’s departure, decided to leave the company. While she said it had nothing to do with losing hope in the company’s future, allegations that surfaced on November 16th shed some light on her own plight while working at the company.

It started with claims that Kotick knew about what was happening but did not do anything about it. More than that, he hid the information from the company’s board. The reported abuse included emails containing accusations of rape, which Kotick did not bring to light.

In the same report, it said Jen Oneal suffered harassment and unequal pay compared to her fellow co-leader Mike Ybarra. Ybarra stated that they asked for equal pay, but Oneal clarified that the request was denied. Not only that, but she stated that she only received an offer for equal pay after her resignation.

Employees Petitioned for Kotick’s Removal

In November, the industry began to speak out with bosses from companies such as Xbox, Sony Interactive Entertainment, and Nintendo sharing their thoughts on the situation. But they were not the only ones. The employees at Activision Blizzard also made their voices heard.

More than 1,000 employees from nearly every part of the company signed a petition seeking the removal of Kotick from the company. Knowing that the CEO was aware of the abuses for a long time incited employees, undermining their confidence in Kotick’s leadership.

They also raised the issue of having Kotick left out of selecting the next CEO since he controls a large portion of the voting rights. After the petition surfaced, Kotick told senior executives he would consider stepping down if he failed to fix the situation quickly.

A Workplace Responsibility Committee Was Set Up

Activision Blizzard announced a Workplace Responsibility Committee. However, instead of doing so in an appropriate manner that inspired confidence, they did so quietly, starting with making the announcement outside of normal business hours, limiting employee response.

Additionally, while the company announced that it planned to include two independent directors to oversee various policies and procedures, it included management, such as Kotick and other board members as overseers to determine success. There was also no mention of employees below the board level being involved.

Inaction Continued — December 2021

Towards the end of November, a long-time employee and one of the original walkout organizers, Jessica Gonzalez, left the company. She stated the company’s inaction as one of the reasons for her departure, even directly addressing Kotick.

In December, the company’s inaction continued, seeing the Raven Software QA team stage a walkout over layoffs. The walkout saw support from other groups at the company, who staged walkouts of their own in a show of solidarity.

Following the walkouts, the ABK Workers Alliance started a strike action. Frustrated by the continued inaction, they spoke of their plans to continue the strike until the company met their demands. The decision included the creation of a Gofundme page to gather a strike fund.

Employee Strike Fund Applied Pressure — January 2022

By January 6th of this year, the strike fund gathered more than $350,000. With the strike lasting three weeks and gaining financial support, the company finally issued a response. The company expressed that it was in talks with employees to listen to their concerns and find solutions moving forward.

Microsoft Began Acquisition of Activision Blizzard

In a shocking move, especially considering everything that happened in the past year, Microsoft announced its planned acquisition of Activision Blizzard on January 18th. Not only that, but the deal is for a massive amount of around $69 billion.

The deal detailed has Activision, Blizzard, and King coming under the Microsoft banner. While it is only expected to complete in 2023, it will make Microsoft the third-largest player in the video game industry if it goes through.

There is a lot still up in the air with the acquisition, including Kotick’s future. Employees are still calling for his removal, and there have been no definitive statements on what his involvement will be in the future. However, it was confirmed that the company would report to Microsoft Gaming CEO Phil Spencer.

Activision Blizzard’s First Union Was Formed

Raven Software QA employees, who played a central role in the latest walkouts and demands, formed the first Activision Blizzard union. The Game Workers Alliance was formed with the Communications Workers of America and requested voluntary recognition from Activision Blizzard management.

In the wake of forming the union, the Raven Software QA strike ended. The action of ending the strike was called an act of good faith by the group.

Judge Ruled On Temporary Workers — February 2022

Although added to the complaint by the DFEH, Activision Blizzard tried to fight the addition of temporary employees to ongoing lawsuits. On February 15th, a judge ruled in favor of including temporary workers. Because of that, they will be included in the “employees” within the lawsuit.