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Hours before Activision Blizzard learned that the Federal Trade Commission aims to block its $69 billion sale to Microsoft, the video game giant filed a lawsuit Thursday against two California state agencies that have probed allegations of sexual harassment and pay discrimination at the company.

Activision’s complaint, filed in Sacramento Superior Court, accuses the California Department of Fair Employment and Housing of interfering with a separate settlement that the company was pursuing with the federal Equal Employment Opportunity Commission.

Moreover, the lawsuit accuses the DFEH of waging war in the court of public opinion against the agency. The complaint assets that state regulators have “orchestrated a comprehensive media campaign in an attempt to bullrush the Company into settling its lawsuit using allegations that the agency knew were unsustainable at trial.”

The 29-page complaint features copies of email correspondence between DFEH officials and journalists from prominent publications including the Wall Street Journal, New York Times and Washington Post. The complaint asserts that “agency Director Kevin Kish and its then-Chief Counsel Janette Wipper who, published reports said was subsequently fired by CRD during the pendency of this case — engaged in a systemic campaign of off-the-record media briefing and leaking to the media, all in violation of its own stated agency policy not to speak to the media about ongoing matters.”

The bureaucratic battle between state and federal regulators around Activision investigations has been well documented and has added to the baggage around the company that produces the wildly popular “Call of Duty” and other top games. Activision maintains that the DFEH broke the terms of an agreement between the state and EEOC officials that the federal agency would investigate the sexual harassment claims with the state agency would focus on pay discrimination claims. The DFEH filed a lawsuit against Activision in 2021 that involved both issues.

Activision asserts that the DFEH has sought to interfere with the $18 million settlement that the comapny reached in March 2022 with the EEOC.

Another key component of the new lawsuit suit is Activision’s claims that the DFEH and California Civil Rights Division (CRD) have dragged their heels in violation of court orders on producing documents and other discovery sought by Activision attorneys.

“When Activision Blizzard sought, pursuant to California’s Public Records Act. (“PRA”), to unearth additional details about this concerted effort to unfairly tarnish Activision Blizzard’s reputation, CRD unlawfully refused to provide communications that it knows will confirm its malicious actions,” the complaint states. “In some instances, CRD slow-walked responses, insisting that simple
information requests, that should have been provided promptly, as required by law, would take many
months, or even years to complete. In other instances, CRD produced documents, but unlawfully
redacted key portions in an attempt to hide information that would be embarrassing to the agency.
In some instances—including communications regarding its collusion with labor unions—CRD has
completely refused to produce any documents, even though they are required to do so by the law,” the complaint states.

Representatives for the CRD and DFEH did not immediately respond to a request for comment.

Activision has faced public scrutiny of its business practices for the past few years, even since the state and federal probes were initiated by complaints from employees and former employees with reports of shocking allegations of frat-house behavior being tolerated at the company.

In March 2022, as part of the $18 million settlement, Activision signed a three-year consent decree that involves an outside auditor examining how the company handles harassment and discrimination claims and the appointment of a third-party arbiter for equal employment opportunities.

At the time, EEOC officials presented Activision as a company commited to change in an industry that is notoriously insular and dominated by white men.

“We recognize Activision Blizzard for agreeing to a substantial injunctive relief that reflects its commitment to being a change agent in an industry that struggles with harassment in the workplace,” Anna Park, regional attorney for EEOC’s Los Angeles District Office, said in March. “We encourage others in the industry to examine their practices to ensure a workplace free of harassment and retaliation.”

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