Riot Games announced that it has reached a global settlement agreement with the California Department of Fair Employment and Housing (DFEH), California Division of Labor Standards Enforcement (DLSE), and several private Plaintiffs to resolve the class-action gender discrimination litigation originally initiated as “McCracken vs Riot Games” in 2018.
Riot is headquartered in Los Angeles, California, and has 3,000+ employees in 20+ offices worldwide. The company was founded by Brandon Beck and Marc Merrill in 2006, and is currently led by CEO Nicolo Laurent.
The settlement covers a 2018 class action lawsuit filed by current and former Riot employees in the wake of a Kotaku report detailing systemic sexism and unfair treatment. The suit described an environment where male employees made derogatory sexual comments about female colleagues and passed them over for promotion, creating a company-wide “unwritten policy and practice of preferring men to women in the hiring, promotion, and compensation of its employees.”
Under the proposed consent decree, Riot will pay over $100 million to remedy violations against approximately 1,065 women employees and 1,300 women contract workers. The decree requires comprehensive injunctive relief in the form of workplace reforms, independent expert analysis of Riot’s pay, hiring, and promotion practices, and independent monitoring of sexual harassment and retaliation at Riot’s California offices for three years.
The decree will also resolve claims brought by the California Division of Labor Standards Enforcement (DLSE) in the first case jointly prosecuted by DFEH and DLSE.
In November 2018, former Riot employees filed a putative class action in Los Angeles Superior Court with private counsel and entered a proposed $10 million settlement of that action soon thereafter. In January 2020, both DFEH and DLSE objected to the proposed $10 million settlement. Both state entities then successfully intervened in the pending private action to protect the interests of the State and the women workers, and ensure the fairness of the resolution of the claims.
Both the DLSE and DFEH have jurisdiction to enforce the Equal Pay Act. This is the first case DFEH has litigated involving claims under that law, which the California Legislature authorized -DFEH to enforce starting January 2021 under SB 973 (Jackson).
Under the consent decree, Riot has agreed to:
– – Pay $100 million, of which a minimum of $80 million is dedicated to compensating workers. This amount includes $4 million in penalties under the Private Attorney General Act (PAGA), one of the largest such penalties assessed by the DLSE in its history.
– – Create a $6 million dollar cash reserve for each year of the three-year term of the consent decree (for a total of $18 million) to make pay adjustments and to fund diversity, equity, and inclusion programs.
– – Make available 40 full-time positions in engineer, quality assurance, or art-design roles to qualified class members who worked as temporary contractors in a competitive process.
– – Hire and pay for an independent third-party expert approved by DFEH to conduct a gender-equity analysis of employee pay, job assignments, and promotions each year for three years and remedy disparities that cannot be explained by bona fide, legitimate reasons.
– – Hire and pay for an independent third-party monitor approved by DFEH to audit compliance with workplace protections, including a review of complaint investigations and outcomes, each year for three years.
Women who worked as employees or contractors for Riot since November 6, 2014 may be eligible to receive compensation. Additional information will be posted on DFEH’s website following entry of the consent decree by the court.
Final approval of the settlement by the court is pending, with a hearing expected in the coming months.