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California Intervenes Against Activision's $18 Million Discrimination Settlement, EEOC Reveals Conflict of Interest
2021/10/10 at 5:22 PM
The Activision Blizzard legal argument is heating up once again, but this time the California Department of Fair Employment and Housing (DFEH) and the federal Equal Employment Opportunity Commission (EEOC) are the ones locking horns. The DFEH started by
filing an expedited intervention
EEOC's $18 million settlement with Activision Blizzard
, on the grounds that it could hurt
their own case against the developer
, which covers many of the same allegations of sexual harassment and discrimination. However, things got even more interesting when
the EEOC filed an opposition to the intervention
, revealing that the DFEH violated the California Rules of Professional Conduct by employing two attorneys who previously worked on the EEOC's own investigation of Activision.
The DFEH's intervention claims argues that the EEOC settlement threatens their case, but the state may have bigger problems...
The State of California Intervenes
The two part story begins with the DFEH filing an expedited intervention against the EEOC settlement, claiming that it could do irreparable harm to their own three year investigation of Activision Blizzard. The intervention argued that the terms of the settlement were deficient in several ways and requested a fairness hearing between the three parties (the Activision, the EEOC, and the DFEH) to remedy. One point which stands out against the agreement directing Activision to remove references to allegations of harassment and retaliation from the personnel files of employees found to be eligible for claims under the terms of the settlement.
The clause directing Activision to adjust personnel files (left) is a standard part of EEOC settlements intended to protect employees against whistleblower discrimination, but it does not mean that all the evidence is erased.
The EEOC memorandum (right) clarifies that the agreement only directs those references to be removed from personnel files, not destroyed.
Unfortunately, this headline has been reported elsewhere a move on Activision's part to destroy evidence essential to the DFEH's investigation, not so subtlety suggesting the company is behind it, much like
previous allegations of shredding documents
. In actuality, it's an EEOC directive to expunge personnel files in order to avoid the potential for abuse down the road, so that some malicious manager can't discriminate against those who complained or received a settlement. It is a whistleblower clause specifically added for the protection of those employees and a
standard part of EEOC agreements
for that reason - rather than something cooked up for the protection of corporate executives. Ultimately a judge will decide the veracity of this and the other DFEH's complaints, but Activision is still bound by the ongoing DFEH investigation, so the EEOC's terms don't give them free reign to destroy any and all documentation of wrongdoing.
The EEOC Reveals Conflict of Interest
Following the DFEH's complaint,
the EEOC filed an opposition against the intervention
, but not for the reasons you'd think. While also arguing
against the merits
of the intervention's complaints, the EEOC's opposition revealed that two lead lawyers in the DFEH intervention were not only former EEOC employees, but that they were also two of the key attorneys previously assigned to the EEOC's investigation of Activision Blizzard! Because they joined the state's investigation without the federal department's knowledge or permission, and initially headed up the intervention against the $18 million settlement, at least part of the State's investigation may violate
Rule 1.11(a)(2) of the California Rules of Professional Conduct
, which explicitly prohibits former government employees from representing a client in connection with a matter in which the lawyer personally participated without prior written consent.
The EEOC argues that by employing two attorneys who previously worked on the EEOC's case against Activision, the DFEH has violated the California Rules of Professional Conduct.
This conflict of interest could represent a much bigger problem for the DFEH than the EEOC's settlement, as it could be considered a violation of professional ethics, a potential breach of confidentiality, and could even result in the entire California suit being compromised. The document is heavily redacted, but outlines that not only did the DFEH engage in prohibited representation, but that the speed at which they retained new counsel after the fact was brought to light and subsequently filed their objection suggests that the motion was a result of the previous lawyer's work. Because of the likelihood that the disqualified attorneys obtained important information in their prior representation or may have shared confidential information from the EEOC investigation they participated in, it threatens to tarnish the entire case, regardless of those particular lawyers being replaced.
These same attorneys then proceeded to represent DFEH in connection with these intervention proceedings, which seek to oppose the consent decree that arose out of the very investigation they helped to direct while at the EEOC. Such representation is prohibited by California Rule of Professional Conduct 1.11(a)(2), and this conflict is imputed to all DFEH attorneys by virtue of California Rule of Professional Conduct 1.11(b) because of DFEH’s failure to screen the individual attorneys.
After being informed of this conflict, DFEH retained new counsel but appears to have filed the present intervention motion just hours after this counsel was retained, strongly suggesting that the motion is a product of the prohibited representation. For this reason, the intervention motion should be disallowed and DFEH attorneys should be barred from providing work product to, or advising, new counsel in connection with these intervention proceedings.
Misrepresentation aside, the
arguing against the merits of the intervention also paint a picture of a self-serving DFEH, which has advised female employees of Activision Blizzard not to seek individual legal counsel and refer to the DFEH if any lawyer approach them, which the EEOC calls conduct at odds with state and federal law as well as the rules of professional responsibility.
The two agencies would be unable to resolve claims at all if DFEH's position on releases were accepted. Ultimately, DFEH's true goal here is to force individuals to recover only through its lawsuit.
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