Riot Games, a Los Angeles based video game developer, has agreed to pay out $10 million in a settlement with a class of women who had brought claims of sexual harassment and gender discrimination. Announced in August 2019, court filings on December 2, 2019, revealed for the first time some of the terms of the settlement Riot Games reached with nearly 1,000 women who worked at the developer since 2014.
In November 2018, two plaintiffs filed a lawsuit and alleged that they and other women in the company were routinely subjected to sexual harassment and gender discrimination under California’s Equal Pay Act. The suit followed a series of articles where current and former employees had exposed a workplace full of sexist behavior. Among other things, the employees alleged that Riot Games had fostered a “bro culture,” where men were given the first and best opportunities, and routinely engaged in harassment and inappropriate behavior. The behavior included managers circulating a “hot girl list” and even sending lewd and unsolicited photographs to other employees.
Moreover, when employees raised their concerns, they alleged they were then retaliated against, including being denied promotions, pay raises (and even equal pay), and reassignments. Other alleged retaliation included some women losing benefits, being demoted, suspended, and even terminated. This led to a handful of other lawsuits alleging wrongful termination and sexual harassment, which led to more trouble for Riot Games
Riot Games’ troubles did not end there. In the spring of 2019, Riot Games attempted to force those wrongful termination lawsuits to arbitration. In response, the employees organized a walkout, patterned after the Google walkouts in 2018. This also followed a major push in the video game developer arena to organize, as many employees cited incredibly long hours and little pay in the industry as their reasons for organizing. Riot Games refused to end the practice of forced arbitration, but stated that it would allow newly hired employees to waive the forced arbitration clause in its agreements following the end of the above litigation. Notably, California has since outlawed the use of forced arbitration clauses for employees hired after January 1, 2020.
The settlement filed on December 2 includes various terms and initiatives that Riot Games must undertake to change its company culture. On top of the $10 million it will pay out to class members—which includes self-identifying females, regardless if they were classified an employee or a contractor—Riot Games will also be required to improve and strengthen its internal reporting procedures; undertaking an audit and review of all compensation, hiring, and promotion practices; creating and hiring a new position of Chief Diversity Officer; and creating numerous internal employee groups whose task it will be to monitor the above changes.
For an employer, the Riot Games case provides a litany of employment and labor issues that employers need to be aware of. First, sexual harassment is always wrong, and an employer would be wise to periodically review its reporting practices, as well as investigate thoroughly any complaints received. Second, and as highlighted by the Riot Games walkout, even non-union employees have rights protected by the National Labor Relations Act. Simply because an employer is not unionized does not mean that the employees cannot organize, an important point that employers should remain cognizant of. Finally, though the U.S. Supreme Court found earlier this year in Epic Systems Corporation v. Lewis ( read more on Epic Systems here) that companies may require employees to settle disputes through individual arbitration rather than join together in a class-action, forced arbitration continues to be a hot-button issue, especially with tech companies. Following Google’s walkout in 2018, Google, Facebook, Microsoft, Uber, and Lyft all pledged to end their forced arbitration agreements with employees, and as mentioned, California has now ended the practice for all new hires.
All of this is to say, the employment and labor field is constantly changing with new developments and issues arising almost daily. Should you ever have any questions, please feel free to contact a member of Jackson Kelly’s Labor and Employment Team.