Riot Games’ $10M settlement could climb to $400M due to California state agency filings

    
10
Riot Games’ $10M settlement could climb to $400M due to California state agency filings

Allow us to recount events for a moment: In 2018, a Kotaku expose blew the lid off of a deeply alarming “bro culture” work environment that normalized a variety of acts of sexual discrimination and sexual harassment. This led to, among other things, a promise of a “cultural revolution” at Riot which fell miserably short, an employee protest and walkout, and a sexual discrimination lawsuit that Riot tried to force into private arbitration (though it would later allow other employees to opt out), and a gender discrimination investigation by California.

It all ultimately led to the class action lawsuit filed by women employees at Riot, which was then settled back in August to the tune of $10 million. However, a new filing from the California Department of Fair Employment and Housing (DFEH) says that the plaintiffs in that suit should be entitled to over $400 million in back pay based on the wage disparity between men and women at Riot Games.

The document filed by the DFEH on January 8th additionally claimed that the non-monetary terms of the settlement were woefully inadequate, claiming the terms introduced “no enforceable changes to employment policies, at a company alleged to be rife with sexism.” It also criticized the process of the settlement and claimed that the plaintiffs’ lawyers did not do enough discovery to find a fair dollar amount for their clients and made a variety of procedural mistakes. Both Riot Games and Rosen Saba, the firm that represented the plaintiffs, have filed rebuttals to the DFEH objections and will offer more detailed dissections of the accusations later in the week.

This filing by the DFEH is on top of another filing made in late December by California’s Division of Labor Standards Enforcement (DLSE), which requested to officially intervene in the case, citing similar arguments that the plaintiffs’ lawyers did not perform their due diligence for their clients and let Riot off the hook for labor law violations in the settlement agreement.

The case moves on to two dates: January 31st is when the court will decide whether or not to grant the DLSE’s request, which could allow the agency to open its own litigation against Riot Games, and February 3rd is when the court will decide whether to heed the DFEH objections or push forward with the agreed upon $10 million. In short, this whole matter is not quite done.

Further reading:

No posts to display

newest oldest most liked
Subscribe to:
Reader
Loyal Patron
Patreon Donor
Armsbend

There was a 400M pay disparity? Sounds like major fudged numbers.

Reader
Kickstarter Donor
Patreon Donor
Loyal Patron
Ashfyn Ninegold

$400 million. This is how much Riot profited by paying women less than men. And that doesn’t include the DLSE’s contention that Riot also engaged in wage theft.

I’ve been confused by some of the reporting on this and that’s because it’s damn confusing. A class action suit was filed against Riot. The ‘class’ of that suit is about 1000 former Riot employees. Then, California’s DFEH filed a separate investigation enforcement action. The $10 million settlement is between Riot and the class, not between Riot and the state.

Now the state says not so fast. $10 million doesn’t get close to what these people are owed and on top of that, none of the issues that we’ve been investigating are addressed. Then the DLSE raises its hand and says we’re not happy, either.

In short California says the preliminary settlement did not address violations of state discrimination and labor law.

The weird thing about this is that the lawyers for the class (plaintiffs) are siding with Riot in trying to keep the state out of it, possibly because the state is contending that they (plaintiff’s lawyers) did not do their job properly. Or, it could be they don’t want to go to trial and are afraid if they do, they’ll lose.

Which makes it about the money.

Plaintiffs lawyers get at least 1/3 of the settlement, sometimes more. If plaintiffs lawyers took this on contingency, they could end up losing a boodle if they don’t win at trial and possibly eat all their expenses. Of course it would be wrong of a lawfirm to sway a client based on the firm’s own financial benefit.

Reader
Utakata

“The weird thing about this is that the lawyers for the class (plaintiffs) are siding with Riot in trying to keep the state out of it..”

With allies like these, who needs enemies. /sigh

Reader
Matt Redding

No kidding. For a lawyer to not adequately represent their clients in a suit is a huge professional failing. I have wonder if the situation was something like they wanted to do a quickie class action suit for the profit they could skim out of it and didn’t want to do an entrenched fight for the full value of wages lost to salary disparity and wage theft.

Reader
cursedseishi

I’d imagine the biggest reason the lawyers are siding with Riot for this is time and money. Court cases can be messy and even drag on—that is time spent doing other lawyer type things. It’s why arbitration’s and settlements are a common thing to see. It saves time…

And it also means money quicker, of course. The 10mill includes whatever percentage the lawyers get paid out for. If the settlement went through as plannned? Well by early February they’d get paid.
Now though? Well, it could be March, April, heck maybe as far as June or July until they get paid out. And while it might be a bigger sum then? That’s a lot of time wasted too, and people would rather save time than they would money—whether it be a garbage F2P title packed full of RMT or a bunch of lawyers and the like.

Reader
Kickstarter Donor
Java Jawa

Ouch, with that much at stake I imagine it could fold the company.

Reader
Nathan Aldana

I doubt 400 million is even a drop ion the Riot/Tencent bucket.

which just makes it more infuriating that theyd so casually screw their employees out of a pittance of their total funds/

Reader
Arktouros

It would hurt but a quick google search says they’re worth over 20b or so.

The real shame would be is if it ended up hurting/killing off the additional games/projects Riot was working on cause you know the people in charge aren’t going to pony it up.

Reader
Kickstarter Donor
Greaterdivinity

Not in the slightest. Riot has made $20B in revenue to-date – https://www.forbes.com/sites/mattperez/2019/10/15/is-there-life-after-league-of-legends-riot-bets-big-on-its-first-new-game-in-10-years/#25bb1f8d2edc

And I believe they’re wholly owned (at least majority owned) by Tencent, who have obscene amounts of money.

Riot will likely work on a settlement to reduce what they owe at the very least, though I fully anticipate they’ll fight this tooth and nail. But this ain’t gonna break the bank.

Reader
Rodrigo Dias Costa

Wholly owned since December 2015. That’s sure not enough to shut down the studio and as you said Tencend would itself inject more money to pay for it if needed. League of Legends still is insanely profitable after all.