Calif. lawyer resigns “in protest,” points to Newsom “interference” in Activision case

One of the main lawyers in California’s ongoing discrimination and harassment case against Activision Blizzard has resigned, citing “interference” by the office of Governor Gavin Newsom.

Bloomberg reports that Melanie Proctor, the assistant chief counsel for California’s Department of Fair Employment and Housing (DFEH), said in a resignation email Tuesday that Newsom’s office “repeatedly demanded advance notice of litigation strategy and of next steps in the litigation.” That interference, which Proctor says increased with her agency’s “wins” in state court, “mimick[ed] the interests of Activision’s counsel,” Proctor wrote.

The resignation letter noted that Chief Counsel Janette Wipper previously combatted this interference by “attempt[ing] to protect” the agency’s autonomy to prosecute, but Proctor alleges that her efforts directly led to Wipper being “abruptly terminated.” In response, Proctor filed her own resignation notice on Wednesday—which she claims is “in protest of the interference and Janette’s termination.”

“Avenues of legal recourse”

Proctor’s resignation email, as reviewed by Bloomberg, concluded with a direct criticism of Governor Newsom’s office. “Justice should be administered equally, not favoring those with political influence,” she wrote.

Instead of responding directly to questions about the allegations, the office of Governor Newsom referred reporters to a DFEH spokesperson, who has declined to comment on anything regarding personnel matters. In a statement sent to Ars Technica, a representative for Wipper confirmed that Newsom terminated her role at the DFEH on March 29 in spite of Newsom’s office reappointing Wipper to that role only four months earlier. In response, she is considering filing a claim under the California Whistleblower Protection Act, among other possible “avenues of legal recourse.”

The initial inciting lawsuit, filed in July 2021, alleged that Activision Blizzard was rife with sexual harassment and gender-based pay-disparity issues. The suit’s interviews “almost universally confirmed that working for Defendants was akin to working in a frat house,” the suit read.

In the months that followed, the SEC opened up an investigation into the allegations—and into whether Activision Blizzard failed to properly disclose what it knew about discrimination, sexual harassment, and other personnel issues to shareholders. The investigation began one month after Activision Blizzard shareholders filed their own lawsuit over the same issues.

“Potential prejudicial impact”

By September, Activision Blizzard settled a separate federal case, whose investigations dated back to 2018, over a similar spate of pay disparity and harassment allegations. The settlement required Activision Blizzard to create a compensation fund for affected employees. The negotiated sum of $18 million amounted to less than half a percent of the company’s annual revenue in 2020.

In the wake of that settlement, Activision Blizzard pushed back against the DFEH lawsuit by alleging a conflict of interest, pointing to its belief that lawyers for the California state lawsuit were also involved “in leadership roles” in the federal case. The DFEH called Activision Blizzard’s allegation an “improper procedural vehicle based on a substantive nonissue” and decried the September federal settlement for having a “potential prejudicial impact” on its ability to enforce California state law. The company’s own filings to delay that federal $18 million settlement were denied by a federal judge in February.

Before her firing from the DFEH, Wipper led recent high-profile cases against major California tech firms. Her agency’s filing against Riot Games over allegations of sexual harassment, discrimination, and pay disparity concluded in December with a $100 million settlement. And a February lawsuit filed against Tesla Inc. alleged widespread racial discrimination at the company’s Fremont factory, including claims that the workplace was racially segregated and that staffers used racist slurs to designate the portion of the factory where Black workers congregated.

Activision Blizzard, meanwhile, found its future fortunes shifting wildly once it announced a January acquisition deal with Microsoft valued at $68.7 billion. The move was eventually followed by an SEC investigation over allegations of insider trading ahead of the deal’s announcement.

Kyle Orland contributed to this report.

https://arstechnica.com/?p=1847785