Activision Blizzard investors are suing the company alleging that the DFEH lawsuit has resulted in investors suffering financial "damages." The initial lawsuit from the California Department of Fair Employment and Housing accused the publisher of having a "pervasive frat boy workplace culture" where female employees routinely suffered discrimination, harassment, and inappropriate behavior from male employees.
Once news of the DFEH lawsuit broke, it touched off a firestorm of postings on social media where employees shared their #Metoo-style stories. Activision Blizzard employees then staged a walkout last week and made demands for workplace reforms including the end of forced arbitration and greater worker oversight for hiring and promotions.
All of this, along with several notable missteps by Activision Blizzard management, has resulted in the company’s stock losing roughly 10 percent of its value since the scandal broke two weeks ago. Investors have since hired Rosen Law Firm and filed suit against Activision Blizzard alleging the company "made false and/or misleading statements and/or failed to disclose" a toxic work culture.
As per court documents obtained by GamesIndustry.biz, the suit lists several factors that damaged the company's perceived value:
- That it "fostered a pervasive 'frat boy' workplace culture that continues to thrive."
- That complaints for "harassment, discrimination, and retaliation" made to HR and leadership "went unaddressed."
- That "pervasive culture of harassment, discrimination, and retaliation would result in serious impairments to Activision Blizzard's operations."
- That as result of the above, Activision Blizzard was "at greater risk of regulatory and legal scrutiny and enforcement, including that which would have a material adverse effect."
- That the company failed to inform investors about the DFEH investigation that had been ongoing for two years.
The class-action lawsuit brought forward by the shareholder group is seeking unspecified damages.
In the meantime, Activision Blizzard is still trying to stem the bleeding caused by the initial lawsuit, promising employees that substantial changes are coming that include the immediate termination of managers found to enable abusive behavior. Just yesterday, Blizzard president J. Allen Brack announced he would be vacating his role and leaving the company.