Recent activity by two federal regulators underscores an increasingly obvious reality: when a company is confronted with harassment and discrimination complaints, government agencies will scrutinize its response and may bring enforcement actions. For months, video game maker Activision Blizzard (“Activision”) has been dealing with negative publicity and litigation relating to allegations that it allowed pervasive sexual harassment and discrimination to occur and failed to appropriately respond. Just two weeks ago, Activision confirmed that the US Securities and Exchange Commission (“SEC”) was investigating the sufficiency of its disclosures. In the latest news concerning the company, Activision publicly disclosed last week that it was resolving a case with the US Equal Employment Opportunity Commission (“EEOC”) by making an $18 million payment to establish a victim fund. This client alert analyzes these developments, the other civil and regulatory issues faced by Activision, and discusses steps companies can take when confronted with harassment or other work conduct allegations.
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