By Helen Halldorsson, Esq.
An $18 million sexual harassment and gender discrimination settlement has brought to light the friction between California’s state agency tasked with enforcing the state’s employment laws, DFEH (Department of Fair Employment and Housing), and its federal counterpart, EEOC (Equal Employment Opportunity Commission). Both agencies filed lawsuits against video game company Activision Blizzard for alleged employment violations, resulting in a “turf war” between the agencies. Activision and the EEOC reached a settlement in their lawsuit, which the DFEH has publicly denounced as insufficient while continuing to pursue its own case. One would expect that government agencies with similar mandates would act cooperatively with one another. The dueling enforcement efforts of the EEOC and DFEH against Activision indicate otherwise.
What Are the DFEH and EEOC?
The Department of Fair Employment and Housing (DFEH) is California’s state agency charged with enforcing California’s civil rights laws, including those pertaining to employment discrimination. The DFEH is empowered to investigate and bring complaints of discrimination, facilitate mediations to resolve disputes, and prosecute violations in court.
The Equal Employment Opportunity Commission (EEOC) is a federal agency responsible for enforcing federal laws that make it illegal to discriminate against job applicants and employees due to their protected characteristics, including race, religion, sex, age, and disability. The EEOC has authority to investigate claims of employment discrimination and if it finds that discrimination has occurred, may attempt to settle the charge and if unsuccessful, file a lawsuit.
How Are the EEOC and DFEH Pursuing Similar Discrimination Allegations Against Activision?
Activision Blizzard is a California-based video game company that has been accused of cultivating a “frat boy” culture that resulted in sexual harassment of female employees, discrimination against women in pay and promotions, and discrimination against pregnant workers. In July 2021, the DFEH filed a lawsuit against Activision in state court alleging sexual harassment and gender discrimination in violation of state law. In September 2021, the EEOC filed a lawsuit against Activision in federal court alleging similar claims in violation of federal law.
In March 2022, a federal judge approved an $18 million settlement between Activision and the EEOC, resolving the EEOC’s lawsuit against the company. The EEOC settlement provides for settlement funds to be divided among a potential class of more than 10,000 current and former Activision employees, including men. When the judge approved the EEOC settlement, she also rejected a renewed request by the DFEH to intervene in the EEOC case, meaning the DFEH was prevented from challenging the EEOC settlement in court.
The DFEH has publicly opposed the EEOC settlement, claiming it provides inadequate compensation to the women who experienced harassment and discrimination at Activision. For perspective, the DFEH notes that it recently sought court approval of a proposed settlement in a similar case against video game company Riot Games for $100 million for a potential class of 2,300 people.
The DFEH also opposes the EEOC settlement because it seeks to preclude women who participate in the EEOC settlement from receiving any compensation from the DFEH case against Activision, which is set for trial in February 2023. The DFEH challenges the validity of the EEOC settlement on the grounds that federal law requires the EEOC to defer to state agencies, and therefore, the EEOC did not even have authority to file its own case against Activision, because the DFEH had already filed one.
In May 2022, Activision formally requested dismissal of the DFEH case still pending against the company in state court, claiming that the DFEH failed to properly investigate claims, did not negotiate with Activision before filing suit, and ran a media campaign that has unfairly damaged Activision’s reputation. The same month, the DFEH appealed the federal court’s decision to prohibit the DFEH from challenging the EEOC settlement in court, arguing that the EEOC settlement was approved with “almost no analysis” and deserves a closer look.
The DFEH continues to publicly oppose the EEOC settlement and plans to continue pursuing its own claims against Activision in state court.
What Does This Mean for the Future of These Workplace Watchdog Agencies?
This case has raised important questions about the balance of power and allocation of work between civil rights enforcement agencies with overlapping cases. It remains to be seen how this will ultimately affect state and federal agency interaction. Our firm will continue to monitor this case as it progresses.
If you have experienced harassment or discrimination in the workplace, contact a California employment lawyer today.