California Slams $10 Million Riot Games Sex Bias Settlement

(Bloomberg) -- Riot Games Inc.’s proposed $10 million settlement of a discrimination and harassment class action lawsuit by female employees has hit a hurdle in the form of California state agencies that say the deal lets the maker of the League of Legends computer games off easy.

The company and lawyers for the women last week asked the judge to postpone the hearing on preliminary approval of the settlement so they would have more time to respond to the state’s objections. A hearing on the state’s filings will now take place on Jan. 31 and the preliminary approval hearing, originally scheduled for Wednesday, has been delayed until Feb. 3.

Women employees at the game company said they were paid less than men for the same work and were also subjected to sexual objectification in the workplace. According to the 2018 lawsuit, a Riot email chain rated the company’s “Hottest Women Employees,” and female workers also received unsolicited images of “male genitalia.”

California’s Department of Fair Employment and Housing said in a Jan. 8 filing in state court in Los Angeles that the proposed settlement would grossly undercompensate the plaintiffs, paying them $6 million to resolve claims that may be worth as much as $400 million. Separately, the California Division of Labor Standards Enforcement objected to the settlement because it would release Riot from liability for certain state labor code violations.

In arguing for approval of the deal, plaintiffs’ lawyers pegged the value of the women’s claims at $38.8 million.

Read More: ‘League of Legends’ Developer Hit With Sex Bias Class Action

The fair employment department also said the settlement wouldn’t require a company “alleged to be rife with sexism“ to change its employment practices. The agency said there were “hot button indicators” that the plaintiffs’ lawyers were motivated to settle the lawsuit more for their own self-interest than those of the women at the company.

Both agencies asked the court the reject the deal. Their objections were first reported by the Los Angeles Times.

Ryan Saba, an attorney representing the employees, didn’t immediately respond to an email seeking comment on the state’s objections.

Riot said in a statement Tuesday: “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.” The company said the state’s estimate of the claims’ values are “simply not grounded in fact or any reasonable analysis.”

The fair employment department had opened its own investigation of gender-based discrimination at Riot before private lawyers sued on the women’s behalf. That investigation is pending and won’t be affected by the proposed settlement, it said in its filing.

The case is McCracken v. Riot Games Inc., 18STCV03957, California Superior Court, Los Angeles County (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Anthony Lin

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