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Alphabet Settles Shareholder Sexual Harassment Suit; Limits NDAs, Ends Mandatory Arbitration


September 25, 2020

YouTube and Google parent Alphabet has committed $310 million over ten years to diversity and inclusion initiatives to settle a shareholder lawsuit stemming from allegations the company concealed payouts to top male executives accused of sexual harassment.

The deal disclosed Friday establishes a DEI (Diversity, Equity, Inclusion) Advisory Council of outside experts and Alphabet executives including CEO Sundar Pichai and includes reforms of workplace equity and board oversight.

The suit against Alphabet and certain officers and directors filed in California State Superior Court, alleged the tech giant violated its fiduciary duty by fostering a culture that let powerful executives sexually harass and discriminate against women. It was spurred by a news report in 2018 that Google gave Andy Rubin, the creator of Android mobile software, a $90 million exit package in 2014 even though he had been asked to resign. He had been accused of sexual misconduct in a case that Google investigated and found credible. There were similar stories for several other high-level executives.

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Reforms at the company include ending mandatory arbitration in harassment, discrimination and retaliation-related disputes; limiting the use of non-disclosure agreements; and recommending consistent, corrective action across business units.

Alphabet will expand the board’s Audit and Compliance role, requiring quarterly reports. And it will prevent employees with certain stock purchase plans from amending them if they are being investigated or sued for sexual misconduct.

“The settlement fundamentally alters Alphabet’s workplace policies, including the use of one-sided non-disclosure agreements that silence victims and enable powerful harassers,” said Julie Goldsmith Reiser, partner at Cohen Milstein Sellers & Toll, one of four firms leading the settlement negotiations on behalf of the plaintiffs.

NDA’s have been commonly used tools to stop women from speaking out and cited in cases from Harvey Weinstein to R. Kelly, Bill O’Reilly.

Read Alphabet Settles Shareholder Sexual Harassment Suit; Limits NDAs, Ends Mandatory Arbitration.