Alphabet, Google’s parent company, said today it has settled a set of shareholder lawsuits related to the company’s handling of sexual harassment claims. Alphabet will commit $310 million to corporate diversity programs over the next decade, and the company agreed to allow its board to take on a greater oversight role in misconduct cases.
As part of the new agreement, Alphabet will expand on its current policy of “prohibiting severance for anyone terminated for any form of misconduct,” to include anyone who is currently under investigation for “sexual misconduct or retaliation,” Google VP of People Operations Eileen Naughton said in a company blog post.
The settlement is the outcome of a consolidated set of lawsuits investor groups filed against Alphabet in California in 2018, alleging that the company breached its fiduciary duty to shareholders when it retained, and handsomely paid off, male executives credibly accused of sexual harassment. (Other shareholder suits, in federal court and in Delaware, are still in progress, according to The New York Times.)
The lawsuits followed reports finding that three top Google executives who left the company amid allegations of misconduct got to leave quietly with massive compensation packages. Android creator Andy Rubin was given a $150 million stock grant, as well as a $90 million severance package, when he was ushered out of the company in 2014 after Google determined a sexual misconduct complaint against him was credible.
Thousands of Google employees staged a walkout in 2018 in protest over the way the company handled the cases of Rubin and others. Protest organizers demanded more transparency from Google over reports of harassment and pay inequity, as well as a new process for safely and anonymously reporting misconduct and an end to forced arbitration.
As part of the settlement, arbitration will now be optional, rather than mandatory, not only for full-time Alphabet employees but also for “temporary staff, vendors, and independent contractors” who have harassment, discrimination, or retaliation disputes with Alphabet—an expansion of its 2018 pledge not to require arbitration in sexual harassment cases. Employees will also not be required to agree to nondisclosure agreements to settle claims of sexual harassment or retaliation.
Alphabet also promised to “enhance investigations processes,” including “how we escalate concerns, how quickly we respond, how we reopen cases, and more.” Complaints involving company senior leadership will also have a “specialist team” assigned, which will report its results to the board of directors.
Google will also officially prohibit personal relationships (“romantic, physical, familial”) in direct reporting or management chains, instead of just “strongly discouraging” them, which was apparently company policy until this point.
“Together, [CEO] Sundar [Pichai], the [Diversity, Equity, and Inclusion] 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,” Naughton said. “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.”