Related to Gender and Race Discrimination
Case: In re Alphabet Shareholder Derivative Litigation, 19-CV-341522 (Cal. Super. 2020)
Date: November 30, 2020
A shareholder derivative lawsuit against Alphabet and top current and former executives alleged that the company misled investors by covering up sexual harassment and abuse by executives, along with a Google+ data breach. Among the nominal plaintiffs in this matter was the City of Irving (Texas) Firemen’s Relief & Retirement Fund.
The lawsuits generally alleged that Alphabet’s board engaged in a “pattern of concealment” to protect company interests at investors’ expense, including the concealment of sexual misconduct and lax customer data safeguards. The investors pointed to $135 million in combined severance payouts to former executives Andy Rubin and Amit Singhal, who left the company following credible sexual harassment allegations.
What were the results of this Shareholder Derivative Litigation?
In response to the litigation, Alphabet agreed to create a special litigation committee to investigate the claims. After its investigation, the committee presented its results to the parties before they entered into a settlement. Under the settlement, Alphabet agreed to allocate $310 million over up to 10 years to fund various initiatives meant to diversify its workforce from top to bottom, including investing in computer science programs and hiring underrepresented talent. The settlement also creates an anti-sexual harassment program that includes a commitment to transparency and to fostering a respectful working environment. Alphabet is required to incorporate these principles into formal policies and to create a panel — named the Diversity, Equity and Inclusion Advisory Council — to oversee its efforts for at least five years.
Additionally, Alphabet has agreed to more closely monitor data breaches and to make “sweeping policy reforms” that include ending the use of forced arbitration of harassment, discrimination and retaliation-related employment disputes, narrowing confidentiality agreements so that workers can discuss the facts of their case, and ensuring that workers company-wide are punished equally for the same misconduct.
