Riot Games and the $100 Million Gender Discrimination Settlement

Timeline

1. Aug 7, 2018Kotaku publishes "Inside the Culture of Sexism at Riot Games."
2. Nov 2018Current and former employees file a lawsuit seeking class-action status.
3. Dec 2018Riot suspends its chief operating officer for two months without pay after an investigation.
4. May 6, 2019More than 100 employees walk out over forced arbitration.
5. Aug 2019A proposed $10 million class settlement is announced.
6. Jan 2020California regulators say the settlement is far too low.
7. Dec 2021Riot agrees to a $100 million settlement with the state and employees.
8. Jul 2022A judge approves the settlement, according to press reports.
9. May 16, 2023California's Civil Rights Department announces final court approval of the consent decree.

The ethical issues

• Gender discrimination in pay and promotion.
• Sexual harassment and workplace culture.
• Forced arbitration and employees' access to courts.
• Regulatory oversight of private settlements.
• Corporate accountability in esports and gaming.

Stakeholders

Stakeholder	Interests & obligations
Women employees and contractors	Fair pay, promotion and a safe workplace.
Riot Games	Reputation, liability and culture change.
California regulators	Enforcing employment law.
Esports players and fans	The culture of the industry.
Sponsors and partners	Brand association.
The gaming industry	Workplace standards.

The case

Riot Games makes League of Legends and runs its professional leagues and the Valorant Champions Tour.^[1] In August 2018, Kotaku published an investigation based on interviews with about 28 current and former employees describing a “bro culture” in which women’s ideas were overlooked, women were passed over for promotions, and harassment occurred.^[1][2] Some employees disputed the claims or said problems were being addressed; the company acknowledged problems and announced initial steps to change its culture.^[1]

Background

Brandon Beck and Marc Merrill founded Riot in September 2006 to develop League of Legends.^[1] In February 2011, Tencent invested $400 million for a 93% stake.^[1] By 2013, League of Legends was the most-played multiplayer PC game in the world. As of May 2018, Riot had 2,500 employees in 24 offices.^[1] Kotaku suggested that Riot’s history of catering to “core” gamers, in its products and in its hiring, had led the company to favor men.^[1]

Riot’s response unfolded in stages. By the end of August 2018, it announced seven “first steps,” including a culture and diversity initiative.^[1] In January 2019 it updated its company values for the first time since 2012. In February 2019 it hired Angela Roseboro as chief diversity officer to lead diversity and inclusion work, including inclusive hiring.^[1] In May 2019, it set out a 90-day plan on diversity and inclusion.^[1] Employees who walked out said Riot had not been transparent about its processes and had kept the suspended executive.^[1]

The rules and governance

California law framed the dispute. The state’s Department of Fair Employment and Housing (DFEH) had investigatory powers, and the agency and Riot clashed repeatedly. In June 2019, DFEH said Riot had refused to provide requested documents. Riot said it had complied with every request.^[1] In August 2021, DFEH asserted that Riot was interfering with its investigation by falsely telling employees they could not speak to the agency. A court ordered Riot to send a memo to all employees confirming that they could.^[1]

Forced arbitration was a central issue. About two weeks after the walkout, Riot said it would not change arbitration in existing agreements while litigation continued.^[1] When the $10 million deal was challenged, Riot called the figure “fair and adequate under the circumstances” but said it remained committed to a resolution.^[1] The final $100 million settlement included the DFEH and the employees.^[1] The state’s case had begun before the lawsuit: the DFEH notified Riot in October 2018 that it had opened a Director’s complaint investigation into alleged harassment, discrimination and retaliation against women employees and temporary agency contractors. When the $10 million private deal surfaced, both the DFEH and the Division of Labor Standards Enforcement (DLSE) objected and intervened in the private case.^[8] It became the first case the two agencies prosecuted jointly, and the first Equal Pay Act case the DFEH litigated after a 2021 state law (SB 973) gave it power to enforce that statute.^[8]

Lawsuits and arbitration

About three months later, a current and a former employee filed a lawsuit alleging gender discrimination in pay and promotion and a sexually hostile workplace, seeking class-action status.^[1][3] In December 2018, Riot suspended its chief operating officer for two months without pay after an internal investigation into workplace misconduct.^[1] In 2019, Riot sought to move some claims to arbitration, citing employees’ contracts.^[1] More than 100 employees walked out on May 6, 2019, demanding an end to forced arbitration.^[1][4] Riot committed to ending mandatory arbitration for new employees but kept it for existing agreements while litigation continued.^[1]

Settlement fight

In August 2019, a proposed settlement of at least $10 million was announced.^[1] California’s Department of Fair Employment and Housing, which had investigated Riot since 2018, said the settlement was far too low, estimating the claims could be worth as much as $400 million.^[1][5] The plaintiffs withdrew the deal and changed lawyers.^[1]

In December 2021, Riot agreed to pay $100 million, including $80 million to women who worked at the company in California since November 2014 and $20 million for fees and expenses, with three years of third-party monitoring of its reporting and pay equity processes.^[6] A Riot spokesperson said the company had chosen to “apologize, correct course, and build a better Riot.”^[6] GamesIndustry.biz, citing Axios, reported that a judge approved the settlement in July 2022. Payments were expected to range from four to five figures for more than 1,000 women employees, with payouts also expected for more than 1,000 contractors.^[7]

Aftermath

The state’s terms went beyond cash. The proposed consent decree covered about 1,065 women employees and 1,300 women contract workers. Of the $100 million, at least $80 million was to compensate workers, including $4 million in Private Attorneys General Act penalties, which the Labor Commissioner called the largest PAGA settlement her division had obtained.^[8] Riot also had to set aside $6 million a year for three years ($18 million in total) for pay adjustments and diversity, equity and inclusion programs. It had to make 40 full-time engineering, quality-assurance or art-design positions available to former temporary contractors through a competitive process, and to pay for an independent expert to analyze pay, assignments and promotions each year for three years, along with an independent monitor of harassment and retaliation complaints.^[8] DFEH Director Kevin Kish said the decree would “send the message that all industries in California, including the gaming industry, must provide equal pay and workplaces free from discrimination and harassment.”^[8]

Riot framed the settlement differently. In a note to employees it said that after third-party assessments it remained confident “the issues brought forth in the lawsuit were not systemic.” It called the state’s $400 million estimate “unfounded and excessive,” and said the class had more than doubled as more women joined the company.^[10] Riot’s public statement said: “despite our best intentions, we hadn’t always lived up to our values.”^[10] One of the plaintiffs, a former Riot developer, told Axios she hoped the result would serve “as a wake-up call for the whole industry.”^[7]

On May 16, 2023, the renamed Civil Rights Department announced final court approval of the consent decree, describing it as covering about 1,600 women, including contract workers, and as the largest settlement of its kind in the department’s history.^[9]

The core dilemma

How should a company be held accountable for a discriminatory culture, and do private settlements and arbitration adequately protect workers?

Competing values

Corporate accountability competes with private dispute resolution. Speed and certainty of settlement compete with full compensation. Company claims of reform compete with independent verification.

Strongest arguments

That the outcome was accountability: The $100 million settlement was ten times the original proposal, compensated affected women and required external monitoring.^[6]

That it fell short: Riot fought to use arbitration, a regulator had to intervene to stop an undervalued deal, and settlements do not involve findings of wrongdoing.^[1][5]

Applying the frameworks

Justice

A justice lens asks whether women were paid and promoted fairly, and whether the settlement’s size and monitoring provide adequate remedy. The state’s challenge to the $10 million deal raised the question of what a fair settlement means for the people harmed.

Rights

A rights lens centers employees’ rights to equal treatment, to speak to regulators and to bring claims in court. Forced arbitration and alleged interference with the state’s investigation raise questions about access to justice.

Virtue

Virtue ethics asks what a company’s stated values say about its character, and whether leaders showed honesty and humility in changing course. It contrasts public commitments with actions such as retaining an executive after misconduct findings.

Walk it through: the Simple Decision Model

1. Spot the issue. You are on Riot’s leadership team in August 2018, right after the Kotaku report. The stakeholders include current and former employees, players, Tencent, esports partners and regulators. The codes in play are California employment law, company values and the employment contracts.
2. Gather facts. What do internal data on pay and promotion by gender show? How many complaints have there been, and how were they handled? What do employees say in confidential interviews?
3. Test options. Options: (a) dispute the report and make modest changes; (b) commission an independent investigation and publish findings; (c) also end forced arbitration and commit to pay-equity audits and external monitoring. Weigh legal exposure against trust and fairness.
4. Check codes and law. Would your response look honest if internal documents became public? Are leaders accountable in the same way as other staff?
5. Decide and document. Record the findings, decisions and timelines.
6. Communicate and follow up. Communicate changes to employees and the public, report progress regularly, and protect anyone who raises concerns.

What’s settled and what’s contested

Settled: The 2018 report, the lawsuits, the walkout, the rejected $10 million deal and the $100 million settlement.^[1][2][6]

Contested: How much Riot’s culture has changed, whether forced arbitration should be allowed for such claims, and the industry-wide lessons.^[1]

Why this case matters

Esports is built on companies that control both games and leagues. Riot’s case shows that workplace ethics in this industry carry the same stakes as in traditional sport, and that regulators and employees can shape accountability.

Key terms

Glass ceiling

Invisible, systemic barriers in hiring and promotion that keep women and minorities out of leadership roles.

Institutional accountability

Structures that make a sport organization explain its decisions and face consequences: clear authority, transparency, appeals, independent oversight and enforcement.

Core values

The principles a sport organization says it stands for, most often safety, fairness, respect, integrity and transparency.

Whistleblowing

Disclosure of wrongdoing in the public interest by someone inside or close to an organization: a moral safety valve.

Definitions from the Ethics Cases glossary.

Discussion questions

1. What responsibilities do esports companies have for workplace culture?
2. Is forced arbitration fair for discrimination claims?
3. Should regulators be able to challenge private settlements?
4. Does a large settlement show accountability, or is it a cost of doing business?
5. How can companies prove that their culture has changed?

Sources

1. Riot Games — Wikipedia
2. Inside The Culture Of Sexism At Riot Games — Kotaku
3. Current And Former Employees Sue Riot Games For Gender Discrimination — Kotaku
4. Over 100 Riot Games Employees Walked Out Today to End Forced Arbitration — Vice
5. California Slams $10 Million Riot Games Sex Bias Settlement — Bloomberg
6. Riot Games to Pay $100 Million After Reaching a Settlement Over Gender Discrimination Lawsuit — IGN
7. More than 1,000 women to receive share of Riot Games' $100m gender discrimination settlement — GamesIndustry.biz
8. Riot Games, Inc. Agrees to $100 Million Settlement and Systemic Reforms to Resolve Allegations of Workplace Sex Discrimination and Harassment (Dec 27, 2021) — California Department of Fair Employment and Housing (now Civil Rights Department)
9. Civil Rights Department Secures Court Approval of $100 Million Settlement Against Riot Games Over Alleged Discrimination (May 16, 2023) — California Civil Rights Department
10. Riot Games Reaches Global Settlement Agreement (Dec 27, 2021) — Riot Games