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Activision Faces New Sexual Harassment Suit as Microsoft Buyout Looms

The suit says the plaintiff complained to HR on multiple occasions and was dismissed.

Sexual harassment allegations have plagued the video game industry at an alarming rate over the last several years, revealing a deeply rooted problem with the way the once male-dominated business coexists with female and female-identifying employees.

But while the allegations have surfaced in major companies like Sony undefined and Ubisoft  (UBSFY) , none have been as plentiful as those leveled at "Call of Duty" publisher Activision Blizzard  (ATVI) - Get Free Report.

It started when California's Department of Fair Employment and Housing filed the first discrimination-related suit against Activision Blizzard in July 2020, accusing the company of a "frat boy culture" that included unwelcome sexual advances and derogatory comments about rape towards women.

While Activision Blizzard CEO Bobby Kotick tried to address the complaints by way of a statement promising "a new zero tolerance policy for inappropriate behavior," a Wall Street Journal feature dug deeper and found more. 

That included evidence that alleges Kotick was well aware of accusations of rape within the company and ignored them. The Journal also found proof of roughly 700 employee complaints about inappropriate conduct in the workplace.

It led to major consequences, from sharp stock drops to Activision Blizzard employees staging walkouts

So when Microsoft announced in January that it intended to acquire Activision Blizzard for $68.7 billion, it seemed like the embattled gaming publisher might be undergoing some major changes under new management, despite investors being less than thrilled about the deal.

On March 23, yet another sexual harassment lawsuit was filed.

Bobby Kotick Lead JS

Activision Blizzard CEO Bobby Kotick.

What Does The New Lawsuit Say?

The new lawsuit was filed by attorney Lisa Bloom with Los Angeles County Superior Court and involves an anonymous current employee of Activision Blizzard.

The suit details Doe's experiences as a senior administrative assistant to former Blizzard staffers Mark Skorupa and alleges a wide variety of complaints.

"Activision Blizzard's failure to curb sexist and harassing conduct emboldened its leadership and others to touch Ms. Doe's breasts, thighs, and other body parts, to comment on her breasts, to invite her to a swinger party, to attempt to kiss her and to make numerous sexualized comments to her," the document reads.

The suit goes on to say that Doe complained to HR on multiple occasions and was dismissed, saying "HR asked Ms. Doe to keep all of her issues, concerns, recordings, or emails to herself because they could be very damaging to Activision Blizzard."

The suit also alleges that Ms. Doe was demoted and her applications for positions in other departments were declined. 

Doe seeks financial compensation as well as a promotion to the position of Executive Assistant and a raise. 

The suit also seeks several changes to the way it conducts business in relation to sexual harassment complaints, including a rotating HR department and an outside investigation firm to investigate past and future complaints.

It also calls for the firing of Kotick.

Will This Affect Activision Blizzard's Stock?

The lawsuit appears to have had little effect on Activision Blizzard's stock this time around, which has stayed fairly stable since the big dip it took last November.

That said, these accusations Activision Blizzard's continue to have a major effect on its reputation in the video game industry.

In its annual report from late February, the company addressed the impact. 

"We have observed labor shortages, increasing competition for talent, and increasing attrition,” including “a significantly higher turnover rate of our human resources function in 2021.”

It still remains to be seen if Activision Blizzard will make the changes it promised to overhaul its workplace culture. But it is still ignoring a California law requiring it to add another woman to its board of directors by the end of 2021.