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

Jill Goldsmith
·3-min read

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.

In November of 2018, 20,000 Alphabet employees globally staged a highly public ‘Google Walkout’ to protest the events described in the report, published in the New York Times, “as well as the company’s generally inadequate approach to sexual harassment and discrimination in its workforce,” the suit said.

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 prevents 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.

In an email to Alphabet staff Thursday posted on the tech giant’s blog, its VP, People Operations, Eileen Naughton, said: “Together, Sundar, the DEI Advisory Council, and the Board will uphold Alphabet’s unwavering commitment to prohibit and respond effectively to complaints of sexual harassment, discrimination, and retaliation and promote diversity, equity, and inclusion in the workplace.”

“In late 2018,” she noted, “Alphabet’s Board responded to employee concerns by overseeing a comprehensive review of policies and practices related to sexual harassment, sexual misconduct, and retaliation. An independent committee of the Board also reviewed claims raised by shareholders in early 2019 about past workplace misconduct issues.”

“Recent years have involved a lot of introspection and work to make sure we’re providing a safe and inclusive workplace for every employee. That doesn’t stop here and you’ll receive reports on our progress as we move forward. I’m grateful to everyone, especially our employees and shareholders, for providing us with feedback, and for making sure that the way we tackle these vital issues is better today than it was in the past.”

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