California officials say a $10 million gender discrimination settlement by the 'League of Legends' creators isn't enough and calculated the game studio may owe $400 million
- Riot Games, the company behind "League of Legends," agreed in August to pay $10 million to settle a class action lawsuit accusing the company of gender discrimination.
- However, the California Department of Fair Employment and Housing says the company could owe as much as $400 million for denying women equal pay, according to the LA Times.
- The DFEH's objection has blocked the original $10 million settlement from being approved.
- A Riot spokesperson described the $400 figure number as a "click-bait number with no grounding in reality."
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The State of California says one of the country's biggest gaming companies could be responsible for paying more than $400 million to female employees as a result of an ongoing sexual harassment and gender discrimination investigation.
In December 2019 Riot Games, the creator of "League of Legends," agreed to pay $10 million to settle a class action lawsuit that accused the company of fostering a sexist work environment. Two Riot employees, one former and one current, filed the suit in California Superior Court in November 2018 accusing Riot of denying them equal pay and blocking their career advancements on the basis of gender.
However, according to a report from the Los Angeles Times, the California Department of Fair Employment and Housing has objected to the settlement, preventing its approval in Los Angeles Superior Court. California's DFEH says that women at Riot could be entitled to more than $400 million in back pay based on the calculations used in the settlement. The department also said the settlement failed to incorporate "enforceable changes" to Riot's employment policies, the LA Times reported.
A Riot Games spokesperson told Business Insider it planned to file a legal rebuttal to the DFEH objections, calling the agency's $400 million number "absurd."
"It's a click-bait number with no grounding in reality," Riot spokesperson Joe Hixson said in an email.
Hixson said the DFEH used a flawed methodology that is inconsistent with similar cases and failed to take into account important factors like job duties, skills and experience.
The original class action suit alleged that Riot created a sexist work environment by fostering "bro culture" that normalized sexual harassment and misogyny aimed at employees of both genders. In December 2018 Riot suspended Chief Operating Officer Scott Gelb for upholding that culture of toxic masculinity, following reports that he had farted on employees and repeatedly hit their genitals as a running joke.
According to reports from ESPN, plaintiffs Jessica Negron and Gabriela Downie are due to receive the highest payouts from the settlement, $10,000 each. After accounting for legal fees and litigation, approximately $6.2 million in settlement payments will be distributed between the remaining members of the class.
An attorney for the plaintiffs, Ryan Saba, told ESPN that the case had resulted in one of the largest gender inequality settlements in California's history.
Riot announced the class action settlement in a joint statement with the plaintiffs on August 23. At the time, Riot said it chose not to pursue litigation in favor of progressing past the dispute as a company.
"While we believed that we had a strong position to litigate, we realized that in the long run, doing what is best for both Riot and Rioters was our ideal outcome," the company said in a blog post at the time. "Therefore, rather than entrench ourselves and continue to litigate, we chose to pivot and try to take an approach that we believe best demonstrates our commitment to owning our past, and to healing the company so that we can move forward together."
Riot has been overhauling its internal policies and company culture since reports of gender discrimination surfaced in August 2018, but some employees have remained critical of its approach. In May more than 100 employees participated in a walk-out of the company's Los Angeles studio to protest a newly introduced forced arbitration policy for workplace disputes.