Why Gender Discrimination Lawsuit Against Riot Games Has New Life

Riot Games sits at the center of a class action gender discrimination lawsuit that shines a spotlight on the culture of the gaming industry. The state recently stepped into the case and has suggested that female employees may be entitled to as much as $400 million. Former Riot employees Melanie McCracken and Jessica Negron, who sued the company over violations of the California Equal Pay Act and Fair Employment and Housing Act in November 2018, are now represented by women’s rights attorney Genie Harrison, an experienced workplace litigator best known for recently bringing cases against Hollywood producer and convicted sex offender Harvey Weinstein. Harrison represents Weinstein’s former personal assistant Sandeep Rehal in her ongoing harassment and retaliation claim against Weinstein and The Weinstein Co. Harrison also represents Jane Doe in her sexual battery case against Weinstein. Riot Games, the developer of “League of Legends,” is being closely watched by the gaming industry, particularly because the court could set precedent for other game studios’ internal policies. Gaming analysts say Riot is one of the region’s biggest names in gaming, and if it is directed by the court to take action, its competitors may move to do the same. “This settlement could result in a lot of publicity and shake up that industry and other industries that are related to it in entertainment and gaming,” said Arthur Silbergeld, employment lawyer and partner at law firm Thompson Coburn in Los Angeles, told TheWrap. McCracken and Negron  allege in the class action that they and other female employees at Riot were paid less than their male counterparts for the same work and subjected to a hostile work environment rife with “bro culture” and sexual harassment. Former Riot employee Gabriela Downie later joined the suit as an additional class representative. In December 2019, Riot agreed to a $10 million payout split between Negron, McCracken and the class, which includes any female employee working at Riot during or before 2015. The next month, as the settlement was about to go before a judge in Los Angeles Superior Court, the California Department of Fair Employment and Housing — which launched its own investigation into Riot Games in October 2018 — and the Division of Labor Standards Enforcement worked together to file a challenge and made the unusual move to get involved in the case, saying that Riot wasn’t offering enough money. With the settlement now withdrawn, the Riot Games case could now go to trial. There is a case management conference scheduled for early April that will determine how it proceeds, Harrison said. “It’s a very rare instance in which any agency is involved in the settlement of a private litigation,”  Silbergeld said. “To get even one agency involved is rare. I haven’t seen anything like this.” Silbergeld added that, in general, pay equity claims are “pretty rare,” do not often make it to trial and are actually rarely initiated by women. “Of the dozen class action cases I have pending right now, I don’t think there’s a female plaintiff in any one of them,” he said. Silbergeld noted this is because women likely aren’t aware of their right to sue, or don’t have the opportunity to find out what men in similar jobs are being paid. The Department of Fair Employment and Housing filing Jan. 8 estimated the settlement could be closer to $400 million. Riot, however, says that figure is inflated. “With respect to the numbers posited by the DFEH, we’ll say again that there is no basis in fact or reason that would justify that,” Riot Games communications lead Joe Hixson told TheWrap. Hinson, told TheWrap that the Riot’s calculations originally estimated the settlement was only worth $1 million. Harrison said her legal team is employing statisticians to analyze the pay data and has not yet determined a new potential settlement figure. If the settlement were to total the $400 million the DFEH recommended, it could be among the biggest gender disparity lawsuits in the state to date. “I think it’s very high, (and) that would be an eye-opener for any company,” said Silbergled, adding that too high a settlement figure could cripple Riot’s budget. According to Silbergeld, the largest wage-related class action lawsuit settlement in the state totaled $190 million and was awarded to former Farmers Insurance employees in 2004. “A fair settlement would be one which provides proper notice, adequate representation and a fair remedy to the entire class, including absent class members and provides enforceable policy changes to remedy, prevent and deter discrimination and harassment from happening again in the future,” said a spokesperson for the California Department of Fair Employment and Housing. The state agency filed a motion last month to join the case as a class representative, and Harrison told TheWrap “they want to be in case because of the unique position they have in regards to (their) ability to achieve reforms without being subjected to certain constraints like the arbitration agreements, and having to certify a class.” Riot requires all its employees to sign an arbitration agreement when they are hired. The court will decide later this month if the state agency can join the case. Riot’s “bro culture” was outlined in the lawsuit as pervasive. McCracken said she and other female employees were expected to “shut up and play the game” while enduring a pattern of sexist behavior at the company. McCracken said that the male Riot employees routinely circulated an email chain called the “Riot Games hottest women employees list,” and that women were frequently the butt of public jokes involving torture, defecation, and sexual topics including rape. The suit also said women at Riot were routinely belittled and subject to comments, such as “she’s shrill,” or “her husband and kids must really miss her while she is at work.” Women who were asked to do work above their pay grade were often falsely promised promotions, which were almost always given to men equally or less qualified, according to the lawsuit. Riot isn’t the only gaming company to come under fire for its internal practices, and the gaming industry frequently expects employees to work excessive hours and dedicate their lives to launching a game. In 2005, Electronic Arts (EA) settled for $15.6 million in a class action lawsuit brought by an employee who accused the company of failing to pay employees overtime. “Overall, the industry can do a lot better. This is not just endemic to one company,” said Yoshio Osaki, chief executive at gaming research firm IDG Consulting. “It is an industry-wide issue. There’s a lot of room for improvement and the industry has made some changes…but we can do a lot better and we need to.” Silbergeld said he believes the proceedings have the potential to upend the gaming industry. “This settlement could result in a lot of publicity and shake up that industry and other industries that are related to it in entertainment and gaming,” Silbergeld said. Since the suit was filed, Riot reports it has made changes to its corporate structure and its company policies and culture. In March 2019, Riot hired former Dropbox Inc. head of diversity and inclusion Angela Roseboro as chief diversity officer to train and oversee staff. Riot also hired Frances Frei as a “culture advisor” and Youngme Moon, who joined the board of directors and leads a committee on diversity and cultural initiatives. Most of these changes were initiated in the wake of the lawsuit. “We believe that these initiatives demonstrate a real commitment to actual change that goes well above and beyond what most companies would have done in a similar situation,” Hixson said. Harrison said she hopes Riot’s prominence in the games industry and the suit will send a signal to other publishers. “We have all known for a very long time, women are paid disproportionately less than men in comparable positions across the country very often,” Harrison said. “It is important for the gaming industry and tech to know that employees, women’s rights lawyers and state agencies can team together for justice on behalf of women.”