On February 19, 2021, the Honorable William Alsup of the United States District Court for the Northern District of California appointed Cohen Milstein as Interim Lead Counsel in the consolidated derivative action, In re Pinterest Derivative Litigation, Lead Case No. 3:20-cv-08331-WHA. In the same order, the Court appointed Cohen Milstein’s client, Employees’ Retirement System of Rhode Island (“ERSRI”), Lead Plaintiff.
Plaintiffs bring this shareholder derivative action against certain current officers and directors of Pinterest, including Board Chairman and Chief Executive Officer Ben Silbermann, Co-Founder and Board member Evan Sharp, and Chief Financial Officer Todd Morgenfeld, for breaches of fiduciary duty, waste of corporate assets, abuse of control, and violation of Section 14(a) of the Exchange Act.
This case, originally filed by Cohen Milstein on November 30, 2020, arises from Pinterest’s alleged systematic culture, policy, and practice of illegal discrimination on the basis of race and sex, from at least February 2018 through the present. Pinterest’s top executives and members of its Board of Directors personally engaged in, facilitated or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the Company’s White, male leadership clique. As a result of Defendants’ illegal misconduct, the Company’s financial position and its goodwill and reputation among its largely female user base (which Pinterest’s success depends upon) were harmed and continue to be harmed.
Plaintiffs seek, among other things, to obtain injunctive relief, including corporate governance reforms, and obtain other relief on behalf of Pinterest and against the individual Defendants for breaches of fiduciary duties and violations of Section 14(a) related to the actions and inactions detailed in the complaint.
Pinterest (NYSE: “PINS”) is an online visual discovery engine people use to find lifestyle inspiration, including recipes, home and style ideas, travel destinations and more. Pinterest launched in 2010 and has hundreds of millions of monthly active users around the world.
Over the summer of 2020, three female senior executives at Pinterest, two of whom are Black, exposed the hypocrisy of the Company that bills itself as the “nicest place on the Internet.” Pinterest held out highly competent women executives Ifeoma Ozoma, Aerica Shimizu Banks, and Francoise Brougher as examples of the Company’s dedication to workplace equity and inclusion. But behind the scenes, as Brougher pointedly remarked after her discriminatory firing, “Pinterest’s female executives, even at the highest levels, are marginalized, excluded, and silenced.”
Pinterest’s hostile work environment was first exposed in June 2020 by Ozoma and Banks. They revealed that they were underpaid relative to a White, male colleague and then retaliated against after seeking equal pay and leveling. The Company ignored their warnings of an imminent doxxing attack, thereby endangering Ozoma and other employees, and subjected Ozoma, Banks, and close colleagues to invasive investigations designed to frame Ozoma and Banks.
Two months later, Francoise Brougher (“Brougher”) filed her own lawsuit against the Company claiming gender discrimination and retaliation. Brougher was Pinterest’s top female executive and the Company’s first Chief Operating Officer. Brougher alleged, among other things, that she was underpaid relative to similarly situated male executives and that due to her sex, male executives intentionally excluded her from essential job duties, including public meetings in advance of Pinterest’s April 2019 initial public offering (“IPO”) and post-IPO Board meetings. After speaking up, she was fired by CEO Ben Silbermann.
On August 14, 2020, outraged Pinterest employees staged a virtual walkout, demanding greater transparency in compensation and increased diversity among Pinterest’s senior leadership. The employees made clear that Ozoma, Banks, and Brougher’s discriminatory experiences were “not isolated cases… Instead, they are representative of an organizational culture that hurts all Pinterest workers.”
Case name: Employees Retirement System of Rhode Island v. Benjamin Silbermann, et al., Case No. 3:20-cv-08438, United States District Court for the Northern District of California
Operative name: In re Pinterest Derivative Litigation, Lead Case No. 3:20-cv-08331-WHA, United States District Court for the Northern District of California, San Francisco Division