Update, 5PM Eastern: The California Department of Fair and Equal Housing has released a counter statement against Activision Blizzard regarding the possible halting of the initial lawsuit. As spotted by Stephen Totilino of Axios, the DFEH gave their main points about the alleged ethics violation by pointing out that its ex-EEOC lawyers aren't heavily involved in the EEOC's case and that the agency had an info-sharing agreement with the DFEH. The DFEH also says that Activision Blizzard knew that the DFEH lawyers were ex-EEOC and claim that Activision Blizzard is trying to "conjure a scandal from these mundane facts."
California (DFEH), on ropes in its suit against Activision, hits back, giving its side of alleged ethics violation— Stephen Totilo (@stephentotilo) October 20, 2021
- Says its ex-EEOC lawyers not heavily involved in EEOC case
- Says AB knew DFEH lawyers were ex-EEOC
- Says DFEH-EEOC had info-sharing agreement anyway pic.twitter.com/NbGFgRa5fw
The original story follows below:
Activision Blizzard may have a way out of its legal battle with the California Department of Fair and Equal Housing. This is due to potential ethics violations/conflicts of interest involving a second federal agency that filed an Activision Blizzard lawsuit.
What's causing this problem with the Activision Blizzard lawsuit?
Late September, we learned that Activision Blizzard, in addition to its legal battle with the DFEH and shareholders, got a complaint from the U.S. Equal Employment Opportunity Commission. However, that complaint got settled quickly with Activision Blizzard making an $18 million fund for harassment victims. However, things have gotten ugly between the two suing parties. It started with the DFEH filing a motion to intervene with the settlement, citing a clause in the settlement with requests that Activision Blizzard lawyers be able to remove any allegations of sexual harassment from the personnel files of settlement claimants, destroying evidence for the DFEH's trial (it's worth noting the DFEH is a state department while the EEOC is a federal agency.) In response, the EEOC listed points opposing the DFEH's appeal, including the big news that two of the lawyers leading the DFEH's case previously worked for the EEOC. Also, during their time at the EEOC, those lawyers investigated Activision Blizzard in relation to the claims that led to the settlement. If this is true, it could be a conflict of interest, a breach of professional ethics, and a violation of California law on attorney conduct.
As the two government agencies face-off, Activision Blizzard has filed a motion to put the DFEH's harassment and discrimination lawsuit on hold so this ethics violation can be investigated. In its ex parte application (which means it could skip the usual legal process due to its urgency) to stay the case (which can be read in full here on The Verge,) Activision Blizzard says that this violation of California law "prohibits attorneys for a governmental party to provide advice to an unrepresented party whose interests may conflict with the government client's." More importantly, breaking these ethics rules could lead to a dismissal of the case, as all the work done on the case is deemed ineligible. Depending on how this goes, this could possibly give Activision Blizzard a Get Out of Jail Free card as they get out of this legal battle with little more than a slap-on-the-wrist fine.
Over 40 Activision Blizzard Employees Have Faced Discipline, Including Over 20 Exits
As this legal battle rages on, Activision Blizzard has posted an internal email, written yesterday by former Homeland Security advisor and current CCO Frances Townsend, for public perusal. In her email, she speaks about the company's attempt to "earn our team's confidence that, when they speak up, they will be heard." As part of various resolved reports, over 20 employees have "exited" Activision Blizzard, and more than 20 different employees faced other types of discipline. The "exited" employees include game developers and supervisors, but no board members In addition, the company will be adding 19 full-time employees to its ethics and compliance team and tripling its investment in training resources, all as part of their public promises to comply better with workplace protection laws.