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Alphabet to Fund $310 Million Diversity Initiative to Settle Sexual Misconduct Lawsuit from Shareholders


September 25, 2020

Google parent Alphabet has agreed to commit $310 million to diversity, equity, and inclusion initiatives as part of a settlement for a series of sexual harassment and misconduct lawsuits filed against some of the company’s officers and directors.

As part of the settlement, Alphabet will establish a diversity, equity, and inclusion advisory council featuring outside experts, which include retired judge and Harvard Law School professor Nancy Gertner and former member of the Equal Employment Opportunity Commission Fred Alvarez, as well as company executives including CEO Sundar Pichai and Google chief legal officer Kent Walker. The settlement also ends Alphabet’s mandatory arbitration for harassment, discrimination, and retaliation-related disputes between employees or contractors and the company. It limits Google’s use of nondisclosure agreements and ensures that the recommended consequences for misconduct are equal across business units.

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The multimillion-dollar settlement stems from a complaint filed in January last year by Alphabet shareholders Northern California Pipe Trades Pension Plan and Teamsters Local 272 Labor Management Pension Fund. The complaint claims that Alphabet and its leadership breached fiduciary duty and created a “culture of concealment” that led to the coverup of a “long-standing pattern of sexual harassment and discrimination by high-powered male executives” as well as a “serious data breach” related to Google+.

Amid the company’s “brogrammer” culture that harassed and discriminated against women, Alphabet offered high-profile executives accused of misconduct “wasteful exit packages worth millions” while the company’s leadership hid the reasons for their departures, the lawsuit claims. Rubin, for example, was paid $90 million to leave the company. The lawsuit also says 48 cases of sexual harassment had been reported over the previous two years, including 13 that implicated senior managers or executives.

Julie Goldsmith Reiser, partner at Cohen Milstein Sellers & Toll who helped lead the settlement negotiation, said the settlement “fundamentally alters Alphabet’s workplace policies” and gives the company the chance to lead the industry in workplace equity.

Read Alphabet to Fund $310 Million Diversity Initiative to Settle Sexual Misconduct Lawsuit from Shareholders.