Riot Games, Inc. agrees to $100 million settlement in sex discrimination and harassment lawsuit filed by California DFEH

California’s  civil  rights  agency,  the Department  of  Fair  Employment  and Housing (DFEH),  filed a joint  motion  today  for  entry  of  a  landmark  consent  decree  to resolve allegations  that  Riot  Games,  Inc.  (Riot)  engaged in systemic  sex  discrimination  and harassment.  

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. “This  historic  agreement  reflects  California’s  commitment to  strategic  and effective government  enforcement  of  the State’s  robust  equal-pay,  anti-discrimination,  and antiharassment  laws,”  said  DFEH Director  Kevin  Kish.  

“If entered  by  the  court,  this  decree will compensate  employees  and contractors  affected by  sex  discrimination  and harassment, ensure lasting change  in this  workplace,  and send the message that  all  industries  in California,  including the gaming industry,  must  provide  equal  pay  and workplaces  free from discrimination and harassment.” 

DFEH  notified Riot  in October  2018  of  its  Director’s  complaint  investigation  into  allegations  of sexual  harassment,  discrimination,  and retaliation against  women  employees  and temporary agency  contractors  in  its  workplace.  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.  

Today,  the private plaintiffs  separately  filed a  motion for  an order  preliminarily  approving  class certification for  settlement  purposes.  DFEH  and DLSE,  as  government  law  enforcement agencies,  are not  subject  to class  certification requirements.  

“My  office  determined  that  Riot’s  proposed initial  PAGA  settlement  with private counsel  was insufficient  and did not  adequately  deter  the  company  from  violating women’s  right  to equal pay  for  equal  work,”  said California Labor  Commissioner  Lilia García-Brower.  “Under  the Equal  Pay  Act,  employers  who pay  women less  than their  male counterparts  for  substantially similar  work  are violating the law.  Collaborating with DFEH  produced a  proposed enforcement  outcome  that  holds  the employer  accountable,  compensates  the  workers,  and will  result  in the largest  PAGA  settlement  DLSE  has  obtained to date.” 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.