Blizzard Activision Sued Over Company Culture - Page 34

A top lawyer for the state of California has resigned, accusing the governor’s office of interfering with a discrimination lawsuit against Activision Blizzard Inc.

Melanie Proctor, the assistant chief counsel for California’s Department of Fair Employment and Housing, said in an email to staff Tuesday night that she was resigning to protest the fact that her boss at the agency, Chief Counsel Janette Wipper, had been abruptly fired by the governor. Both lawyers had already stepped down from the Activision lawsuit earlier this month without explanation. A representative for the two attorneys confirmed that Proctor had resigned and Wipper was fired.

The allegation and loss of the top two lawyers on the case raises questions about the fate of the Activision lawsuit, which accuses the Santa Monica, California-based video game publisher of sexual discrimination and misconduct. The case is currently pending in Los Angeles Superior Court. The lawsuit, which detailed Activision’s “frat boy” culture, led to employee walkouts, calls for the chief executive officer to resign, condemnation from its business partners and a stock plunge that culminated in Microsoft Corp.’s agreement earlier this year to purchase the company for $69 billion.

Proctor said in the email to staff that in recent weeks, California Governor Gavin Newsom and his office “began to interfere” with the Activision suit. “The Office of the Governor repeatedly demanded advance notice of litigation strategy and of next steps in the litigation,” Proctor wrote in the email, which was seen by Bloomberg. “As we continued to win in state court, this interference increased, mimicking the interests of Activision’s counsel.”

Proctor wrote that Wipper had “attempted to protect” the agency’s independence and was “abruptly terminated” as a result. “I hereby resign, effective April 13, 2022, in protest of the interference and Janette’s termination,” Proctor wrote.

Wipper is “evaluating all avenues of legal recourse including a claim under the California Whistleblower Protection Act,” said her spokeswoman, Alexis Ronickher.

A spokesperson for the governor’s office referred a Bloomberg request for comment to a spokesperson for the DFEH, who said they would not comment on personnel matters. “DFEH will continue to vigorously enforce California’s civil rights and fair housing laws,” a spokesperson said.

The shakeup comes just two weeks after Activision reached a settlement with the U.S. Equal Employment Opportunity Commission for $18 million over a similar lawsuit. In a series of court squabbles, California’s lawyers had attempted to block that settlement but were ultimately rejected by a federal judge.

Critics pointed out that $18 million was low for a company of Activision’s scale, and that Wipper’s department had gotten Riot Games Inc., a far smaller company, to pay $100 million last year to settle its own discrimination lawsuit.

Quality assurance testers for Activision Blizzard Inc. will vote next month on unionizing, a U.S. labor board official ordered Friday.

The group of around 21 workers at the company’s Raven studio in Wisconsin will be mailed ballots on April 29, according to the ruling from the National Labor Relations Board’s Minneapolis regional director Jennifer Hadsall. The decision comes after Activision Blizzard declined to voluntarily recognize Raven Software’s union.

Raven Software is a subsidiary of games-entertainment behemoth Activision Blizzard, which announced in January that it would be acquired by Microsoft Corp. for $68.7 billion. The Raven employees perform quality-assurance testing for video games like Call of Duty to ensure they function smoothly. Workers there moved to unionize after news of job cuts in December 2021, which preceded weeks of strikes. Turmoil also followed an explosive complaint from California’s Department of Fair Employment and Housing accusing Activision Blizzard of fostering a “bro culture” of sexism.

The company had argued that the workers’ election petition should be dismissed because they were a “workforce in flux” undergoing a reorganization and that any election should instead cover hundreds of employees in dozens of job classifications, meaning the union would have needed much more support to prevail. In her ruling, Hadsall rejected the company’s arguments, writing that the quality assurance testers share a “community of interest” and that there was “no evidence that QA testers are being eliminated or that their role would fundamentally change” due to reorganization.

“While we respect the NLRB process, we are disappointed that a decision that could significantly impact the future of our entire studio will be made by fewer than 10% of our employees,” a spokesperson for Activision said in statement. “We are reviewing legal options regarding a potential appeal.”

Workers will vote on joining the Communications Workers of America, the same union organizing at Alphabet Inc. and at an Apple Store in Georgia. The Communications Workers of America didn’t immediately respond to request for comment.

Activision Blizzard spokespeople and executives have stated several times that they respect employees’ right to unionize. However, the company has also faced allegations of union-busting. In January, Activision Blizzard reorganized Raven Software workers, embedding them in specific departments like “audio” and “design” in a move Communications Workers of America director Tom Smith referred to as “a tactic to thwart Raven QA workers who are exercising their right to organize.”

The company said the move had begun late 2021 and was intended to boost efficiency.

Activision Blizzard also converted 1,100 game testers to full-time employees early April and increased their minimum salary. The workers at Raven Software didn’t receive the same pay initiative. The company cited “legal obligations under the National Labor Relations Act.”

The Activision campaign comes amid a surge of organizing in tech, including successful recent union representation votes among Amazon.com Inc. warehouse workers and sub-contracted Alphabet Inc. retail staff.

Unions are rare among games companies in the U.S.. The first, at independent studio Vodeo Games, was announced last December.

Even if Activision Blizzard Inc. shareholders approve a $69 billion sale to Microsoft Corp on Thursday, Wall Street is betting that Biden antitrust enforcers could unravel one of the largest mergers in U.S. history.

Shares of the gaming juggernaut are trading 25% below Microsoft’s $95 offer, indicating investors see risk the buyout won’t close as planned. This risk premium is more than double that of Twitter Inc. following Elon Musk’s offer, and higher than most of the announced -- but still pending -- deals tracked by Bloomberg.

Tough-talk from President Joe Biden’s antitrust enforcers is fueling investor fears that the deal could be blocked or subject to delays even if it prevails, said Matt Perault of New Street Research. Plus, the deal will also need approval by other governments including the European Union and China.

The merger, which has until June 2023 to close, would make Microsoft the world’s No. 3 gaming company, and would give it ownership over two of the most recognizable gaming brands on the planet in Call of Duty and World of Warcraft. Microsoft would also gain control of Candy Crush developer King, which made $2.58 billion in revenue last year.

Activision shareholders will vote Thursday and are expected to approve the deal, according to Betty Chan, a merger-arbitrage specialist at Elevation LLC. SOC Investment Group, an activist shareholder group with a small stake, earlier this month encouraged shareholders to vote down the deal and Microsoft’s offer of $95 a share. That group and other investors have spoken out against a potential golden parachute for embattled Activision Chief Executive Officer Bobby Kotick, who is expected to leave once the deal closes and will walk away with more than $375 million.

The deal will be reviewed by the Federal Trade Commission, which is led by Lina Khan, who has long advocated for a more forceful approach to reviewing deals, particularly by the biggest technology companies. Under her leadership, the agency has blocked Nvidia Corp.’s acquisition of Arm Ltd. as well as Lockheed Martin Corp.’s deal for Aerojet Rocketdyne Holdings Inc. She also resurrected the FTC’s monopoly case against Meta Platforms Inc., which seeks to split off WhatsApp and Instagram.

Fears of a legal challenge are well-founded, based on Khan’s statements opposing growth via acquisitions by big tech platforms, said Jennifer Rie, an antitrust analyst with Bloomberg Intelligence. Plus, it’s likely the FTC will have a Democratic majority by the time a decision has to be made, alleviating a stalemate that may have caused inaction on the Amazon-MGM merger, Rie said.

Not everyone is worried. Wedbush Securities analyst Michael Pachter places the odds of an FTC lawsuit at 10%, and chances of winning a case at 0% due to the difficulty in defining the concentrated market that this merger would cause. Microsoft wouldn’t have a massive share in the market for console games or videogames at-large, and current antitrust law overlooks so-called freemium business models common in gaming, Pachter said.

He attributes market fear to lack of familiarity with the video-game industry and the FTC’s tough-talk on mergers. The agency “can’t win this one -- so if they can’t win, they’re not going to sue. And Microsoft’s going to call their bluff.” Biden’s new antitrust chiefs have said they’re willing to take risks on big cases.

Even if an FTC challenge doesn’t ultimately prevail, a protracted legal fight could prompt the companies to abandon the deal, analysts said. Despite being the nation’s second-largest company, Microsoft has escaped much of the scrutiny lobbed at its peers. Its experience with regulators and proactive communications about the deal could make a difference in winning approval, said Elevation’s Chan.

“We are optimistic on the outcome at this point, but are still doing work to get more comfort on this.” Chan said.

June 10, 2022

Team,

I wanted to share the news that we will begin negotiations with the Communications Workers of America related to the 27 quality assurance employees at Raven Software, the majority of whom have chosen to be represented by this union. With the election having concluded, we will engage in good faith negotiations to enter into a collective bargaining agreement.

While first labor contracts can take some time to complete, we will meet CWA leaders at the bargaining table and work toward an agreement that supports the success of all our employees, that further strengthens our commitment to create the industry’s best, most welcoming and inclusive workplace, and enhances our ability to deliver world class games for our players.

We begin this process after major investments in our QA team members over the past couple years, including significantly increasing starting pay for QA specialists and converting over 1,100 U.S.-based temporary and contingent QA workers to full-time positions. This conversion is providing access to comprehensive company benefits for QA employees and their eligible dependents. In addition, we have expanded access to performance bonuses for QA employees and learning and development opportunities. We also have integrated QA more seamlessly into the game development process, increasing collaboration that results in better products for our players and more opportunities for our teams.

This is a time of great opportunity for our company. I want to thank you for the passion, skill, and commitment you bring each day to create great games, to embrace opportunities to make this the industry’s very best place to work, and to connect and engage our players around the world.

With appreciation,

Bobby

On June 15 2022 04:12 WombaT wrote:
Given how the main gripes around Blizzard/also the wider field are said so industry practices, and abysmal handling of sexual harassment and not particularly pay or other working conditions it seems that, or something similar would be the route anyway.

On June 15 2022 04:12 WombaT wrote:
A big modern studio encompasses software development, artists, QA testers who as yet can’t be replaced in the ‘feedback on how the game feels to play’ sense, HR and customer service departments. Plus management of all those constituent components.

There’s plenty of scope for unions in such a multifaceted organisation, and membership is elective anyway.

On June 17 2022 17:03 JimmyJRaynor wrote:
right and 21 out of 10,000 opted in. (21/10000) is the approximate level of interest i've noticed over the years for devs wanting to start a union. its almost zero.

On June 18 2022 03:29 Manit0u wrote:

It depends how and where you work. As a dev myself I also wasn't interested in it too much until I started working for a company that was really abusing their workers.

On June 18 2022 09:28 JimmyJRaynor wrote:
Even better is get even more ambitious and build up your education and skillset giving you the option to work in the New York/Cali USA or Israel or some other country with amazing opportunities.

On June 18 2022 10:17 JimmyJRaynor wrote:
Regarding unions at Blizz. Ironically, Blizzard is less unionized than it was five years ago. When they shut down the Versailles office their union representation went down to something very close to zero.