LOS ANGELES – Two California state agencies are taking the unusual step of trying to stop Riot Games from paying out $10 million to female employees as part of a settlement over a gender discrimination class action suit.
The state thinks the women could be entitled to as much as $400 million instead.
The suit began in November 2018, when two women who had worked at the Los Angeles game studio, which makes the popular “League of Legends” title, sued over violations of the California Equal Pay act, alleging that they were routinely subjected to sexual harassment and gender discrimination.
The women’s lawyers and the game studio reached a preliminary settlement in December and were waiting for the Los Angeles Superior Court to approve the settlement that they hammered out in mediation.
Then two state agencies weighed in. In a document filed on Jan. 8, the California Department of Fair Employment and Housing said that the women of Riot Games could be entitled to “over $400 million” in potential back pay based on the wage differential between men and women at the company, excluding any additional penalties, according to the calculations included in the existing settlement.
The agency, which launched its own investigation into the company in October 2018, added that the non-monetary terms of the settlement also seemed inadequate, writing that “no enforceable changes to employment policies, at a company alleged to be rife with sexism, are part of the settlement.”
The state agency also criticized the underlying process that led to the settlement, noting that the plaintiff’s lawyers did not engage in discovery to try and determine a fair dollar amount for their clients, and had apparently made several procedural mistakes along the way.
Both Riot and Rosen Saba, the firm representing the plaintiffs, have filed rebuttals to the state objections, arguing that no mistakes were made in the process of reaching the settlement and that it should be approved by the court.
“We worked hard to negotiate with the lawyer representing the class to reach an agreement that we collectively believe is fair for the class members,” Riot spokesperson Joe Hixson wrote in a statement to The Times. “Now DFEH is trying to disrupt that agreement in a legal filing that is filled with inaccuracies and false allegations.”
“We are particularly dismayed that the filing downplays and ignores the efforts we have made with respect to diversity, inclusion, and culture over the past 18 months,” Hixson continued. “We look forward to making our case to the Court.”
The suit arose in the wake of a series of exposes on the company’s culture, beginning with an article from the games website Kotaku, and laid out allegations that Riot fostered a “men-first” “bro culture” that failed to punish or control harassment.
It described inappropriate behavior such as “crotch-grabbing, phantom humping, and sending unsolicited and unwelcome pictures of male genitalia,” and said women who spoke out received “denied promotions, refusals to provide increased compensation or equal pay, demotions, reassignment with significantly different responsibilities, losses of benefits, suspensions, terminations, and other adverse employment actions.”
Supposed procedural mistakes lie at the heart of another state agency’s opposition to the settlement. In late December, the Division of Labor Standards Enforcement filed a request to officially intervene in the case, arguing that lawyers for the women who worked at Riot failed to do their due diligence in coming to the settlement, and that the terms of the settlement let Riot off the hook for potential labor law violations beyond the initial purview of the lawsuit.
That objection hinges on a specific California law. Thanks to the 2004 Private Attorneys General Act, employees and their lawyers are allowed to bring suit against employers for violating labor law – legally stepping into the shoes of an official state agency to bring the case. But as part of that power, the employees and their lawyers have to inform the state agency that they’re bringing a suit, and offer the state agency first dibs at pursuing the case itself. In the case of the Riot suit, the DSLE is claiming that the original notice for equal pay violations was misfiled, and that the settlement clears Riot of any potential wrongdoing for unrelated violations over issues such as overtime and minimum wages.
Lawyers for Riot and the plaintiffs argue that the DSLE is wrong, having mistaken the terms of an earlier draft settlement for the narrower terms of the final settlement, and that the case is procedurally sound.
The fate of the state’s attempted intervention will be decided at two hearings. On Jan. 31, the court will decide whether to grant DSLE the right to intervene in the case, which will allow the agency to engage in its own discovery and litigation against Riot Games for labor code violations as part of the same suit.
On Feb. 3, the judge will decide whether to heed the objections of the California agencies and reject the proposal or move forward with the $10 million settlement.