Google parent Alphabet Inc. on Friday settled shareholder lawsuits stemming from the search giant’s handling of sexual-misconduct charges against former top executives, promising changes in how its board handles future harassment cases and vowing to spend $310 million during the next decade on diversity programs.
protected accused executives and facilitated their departures from the company without disclosing the allegations. One executive who left was Android creator Andy Rubin, who reportedly received a $90 million payout. Rubin allegedly coerced a Google employee to perform sex acts, and was also accused of sex trafficking, charges he has denied. The article sparked other reporting and eventually led to a protest and walkout by thousands of Google employees around the world in November 2018.
The Silicon Valley tech giant also agreed to limit confidentiality restrictions when settling harassment claims, and waive mandatory arbitration of harassment, discrimination and retaliation claims across all Alphabet companies — an expansion of a move announced last year, which had applied only at Google. In addition, the settlement prohibits the company from paying severance to and speeding up unvested stock awards for any employees “who are the subject of an investigation or have been terminated for sexual harassment, misconduct, or retaliation.”
“This settlement is historic because it’s so broad,” Ann Ravel, an attorney who led parts of the settlement negotiations, told MarketWatch on Friday. “It’s the most forward-thinking, comprehensive agreement of this kind in cases such as this one.”
But End Forced Arbitration, a group spun off from the Google Walkout, tweeted Saturday that it was “not impressed” because the company did not extend optional arbitration in cases that are not related to harassment, discrimination or retaliation Alphabet-wide. In addition, the group said the company retained the class-action ban for employees of Alphabet companies besides Google.
“It’s ironic because the shareholder lawsuit proves that class action can drive change, and yet that very kind of class action remains banned by Alphabet for employees of its other Bets,” said Tanuja Gupta, engineer program manager for Google search and a leader of the group, in an email to MarketWatch.
Ravel said the settlement, which included the $310 million commitment that her firm, Renne Public Law Group, said was the biggest of its kind by a tech company, “can change the entire culture at Google both in hiring and reaching out to minority communities.” The money is to be spent on initiatives including “hiring, progression, and retention of historically underrepresented talent at Alphabet,” according to the settlement filed Friday in California Superior Court in Santa Clara County.
As part of the settlement, the company is establishing a new Diversity, Equity, and Inclusion Advisory Council to oversee the company’s promised efforts for at least five years. Eileen Naughton, vice president of people operations at Google, said in a blog post Friday that the council will be composed of Alphabet Chief Executive Sundar Pichai and three company leaders, plus three outside advisers: a retired judge and two employment lawyers.
When reached for comment Friday, an Alphabet spokeswoman referred to Naughton’s post and said “these commitments build on work already under way from 2018 and 2019 to refine and improve our workplace processes.”
Google co-founders Larry Page and Sergey Brin, as well as former CEO and Chairman Eric Schmidt and the company’s board members, were named as defendants “for their active and direct participation in a multiyear scheme to cover up sexual harassment and discrimination at Alphabet,” according to one of the lawsuits filed in January 2019.
Some individuals named in the lawsuits are no longer at the company. Rubin is gone, and Schmidt has no more ties to Alphabet. Also named in the lawsuits was Amit Singhal, a former Google executive who was accused of sexual harassment and later was fired by Uber Technologies Inc.
for failing to disclose the allegations, which he has denied. David Drummond, who was chief legal officer of the company for years and had a child with a subordinate, left the company at the beginning of the year amid an investigation into his relationships and reportedly married a different employee soon afterward.
The defendants who remain include Pichai, who must remain on the DEI Advisory Council for a year, and board members Page and Brin, plus Chairman John Hennessy, John Doerr, Ann Mather, K. Ram Shriram and Alan Mulally.
Pichai said in an email to employees Friday, “I hope these commitments will serve as a strong signal to all of you that we are not going back in time,” CNBC reported.
Other shareholder suits on the matter remain, including those in federal court that were on hold pending the outcome of the lawsuits in California, according to the New York Times.
This story was updated Sept. 26 to add comments from End Forced Arbitration.