Pinterest has settled a shareholder lawsuit on Wednesday alleging top executives enabled a culture of discrimination.
Financial details of the settlement between Pinterest, a popular social media platform for sharing images, and the shareholder, the Employees' Retirement System of Rhode Island, were not shared publicly. As part of the agreement, the company is releasing former employees from nondisclosure agreements in cases of racial or gender-based discrimination.
Pinterest is also committing $50 million to a series of reforms aimed at increasing diversity, equity and inclusion across the San Francisco-based company, which was founded in 2008, and its product.
"We pushed for these sweeping reforms to support Pinterest's employees with a fair and safe workplace, and to strengthen the company's brand and performance by ensuring that the values of inclusiveness are made central to Pinterest's identity," Rhode Island General Treasurer Seth Magaziner, who acted on behalf of the Employees’ Retirement System of Rhode Island, said in a press release.
The list of reforms targets allegations made by Ifeoma Ozoma and Aerica Shimizu Banks who first went public in June 2020 with accusations of racism and discrimination at the company.
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After these allegations became public, the Employees’ Retirement System of Rhode Island sued the company, saying executives had breached their fiduciary duty by "perpetrating or knowingly ignoring the long-standing and systemic culture of discrimination and retaliation at Pinterest," according to the complaint.
Now, Pinterest has agreed to create an office of an ombudsman to respond to employee complaints. It also says it will conduct a pay equity audit across gender and race twice a year, and "take any steps necessary to maintain this equity," according to the settlement.
The company is updating its acceptable use policy to ban doxxing and has created a formal process for escalating complaints of discrimination, harassment or retaliation involving members of the executive team or board.
Pinterest's commitment to not enforce nondisclosure agreements reflects work that Ozoma has done in California with a new law dubbed the "Silenced No More Act." Since she left Pinterest, she has been lobbying lawmakers to pass Senate Bill 331, which would protect employees who speak out about harassment and discrimination, even if they've signed an NDA. On Oct. 7, Gov. Gavin Newsom signed the Silenced No More Act into law. It will go into effect Jan. 1.
“This is incredible for former and current employees and it’s what I’ve been fighting for since the bill was introduced in February, in regards to releasing former employees from non-disclosure agreements,” Ozoma said in an interview with NBC.
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