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Activision bid to duck California’s sexual discrimination lawsuit on thin ice

Activision had balked at the state's inclusion of temporary workers in its discrimination lawsuit.

LOS ANGELES (CN) — Video game maker Activision Blizzard's attempt to narrow the sexual discrimination lawsuit by the California Department of Fair Employment and Housing on behalf of female workers looks headed for failure after a state judge tentatively denied the company's request to exclude temporary employees from the case.

Los Angeles Superior Court Judge Timothy Dillon didn't issue a final ruling at a hearing on Activision's request.

Activision claims the state agency improperly expanded its lawsuit this past August when it filed an amended complaint that included temporary and contingent female workers under its claims even though, according the company, the department never notified Activision that it was also investigating these workers prior to its decision to sue.

"They are not a general civil litigant that can go fishing around," Activision's lawyer Elena Baca told Dillon. "They violated are due process rights."

In this tentative decision, Dillon said that given the definition of an “employee” under California law, the department didn't expand the scope of the lawsuit by amending the complaint to add the phrase “contingent and temporary workers.” Furthermore, the judge said, the state made a sufficient case in its amended complaint that the contingent and temporary workers were Activision employees because the company supervised and controlled their conditions of employment.

California sued Santa Monica-based Activision last year, following a two-year investigation of sexual harassment and discrimination at the publisher of the "Call of Duty" and "World of Warcraft" games. The state accused the company of tolerating a "frat boy" culture that made it “a breeding ground for harassment and discrimination against women." The president of its Blizzard Entertainment division stepped down weeks after the lawsuit was filed.

The litigation has since morphed into a slugfest. California accuses Activision of resorting to increasingly questionable tactics, including manufacturing ethics allegations against the state's investigators, improper public filings, and engaging in what the state says is a "reverse auction" to procure a consent decree “for the sole purpose of evading accountability, impeding this action, and undermining California law.”

"Activision’s heavy-handed and retaliatory response to this action has not been lost on the public," the state said in a court filing last week. "Indeed, it has prompted employee petitions and walkouts, player boycotts, calls for the ouster of CEO Bobby Kotick, canceled business deals and partnerships, a steep decline in the valuation of Activision, and the recently proposed sale of Activision to Microsoft under close scrutiny."

Activision in turn has accused California of rushing its lawsuit to court as part of a turf war with the U.S. Equal Employment Opportunity Commission. The EEOC filed a separate lawsuit against Activision in federal court in Los Angeles, after California had filed its case in state court, and included a consent agreement to settle its claims against the company. Activision claims that California violated a work agreement with the EEOC that would leave the sexual harassment claims for the federal agency to investigate and resolve.

Under its settlement with the EEOC, Activision will set up an $18 million fund to settle with female employees. California has said that will give the company an opportunity to get out from under the more severe state law claims.

A federal judge in December denied California's bid to intervene in the federal case, finding individual Californians have a right to settle their claims with or without counsel and without input from the state Department of Fair Employment and Housing. The agency has now asked the judge to stay the federal case while it appeals her decision.

California previously struck a tough attitude in pursuing sexual harassment and discrimination claims in the video game industry when it opposed a $10 million settlement in a class action against Riot Games. After the department intervened in that case, the "League of Legends" publisher agreed to pay $100 million to settle the case.

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