Riot Games reaches $10 million settlement in gender discrimination class action

People gather at a walkout by Riot Games employees on May 6 outside Riot's Santa Monica, California, studio. Employees staged the walkout to express disagreement with Riot's policy of forced arbitration for sexual discrimination and harassment cases. Photo by Emily Rand

LOS ANGELES -- Video game developer Riot Games will pay out $10 million following the settlement of a class-action discrimination lawsuit against the company, according to court documents filed Monday in advance of a Wednesday court date.

The settlement will give plaintiffs Jessica Negron and Gabriela Downie $10,000 each, which is the highest payout for a member of the class action, in addition to any other proposed payouts from the lawsuit. The net settlement proceeds following these payouts, legal fees and litigation costs are estimated at $6,201,666.67. This amount will be distributed among the members of the class action, depending on tenure and employment contract status.

"This is one of the largest settlements in the State of California history for gender inequality," Ryan Saba, partner at Rosen Saba LLP, said in a statement. Rosen Saba has represented the plaintiffs since the class-action lawsuit was filed on Nov. 5, 2018. "This shows that Riot is serious about changing the culture at the company."

"We are pleased that a proposed settlement to fully resolve the class-action lawsuit against Riot was filed recently by plaintiffs' counsel," Riot Games Corporate Communications Lead Joe Hixson added in a separate statement. "The settlement is another important step forward and demonstrates our commitment to living up to our values and to making Riot an inclusive environment for the industry's best talent."

On Aug. 7, 2018, Kotaku reporter Cecilia D'Anastasio published the personal accounts of more than 20 Riot Games employees on the "bro culture" inside Riot. It detailed systemic gender discrimination inside the company's cultural framework as well as direct individual accounts of more blatant sexual harassment and discrimination. In the aftermath, Riot pledged to undergo internal changes to its company culture. This included hiring Frances Frei, who was lauded for her work at Uber in cleaning up similar internal company issues, to the company's new Diversity and Inclusion and Culture Strike Team, and later Angela Roseboro as Riot Games' first chief diversity officer.

Despite these internal improvements, Riot motioned to move two of the five total lawsuits to private arbitration on April 26, citing a clause in Riot's employee contracts that waives rights to legal action and instead moves all complaints to private arbitration. This motion inspired a walkout at Riot Games of approximately 200 employees on May 6.

When rumors of the walkout initially surfaced, Riot released a statement that said it would pivot its internal approach to allow all new employees the chance to opt out of private arbitration for sexual harassment and sexual assault claims. Riot also stated that it would revisit extending this opt out to all Rioters once the current litigation was resolved.

Forced arbitration in employee contracts continues to be part of a larger, ongoing conversation about employee rights, particularly in the tech sector and the state of California. Larger tech companies such as Google have already ended forced arbitration for sexual harassment and assault cases. On April 24, the Supreme Court ruled 5-4 in favor of larger companies, stating that employees are not entitled to class-action lawsuits when consent is written into an employee contract. This further allows companies to settle cases out of public courts.

On Oct. 10, California Governor Gavin Newsom signed a series of worker protection bills, including one that effectively gives employees the right to decline forced arbitration written into an employee contract. It also prohibits employers from retaliating against employees who decline.